P.M. Edition for May 21. In its first quarter earnings reported today, Target’s sales declined more than analysts expected and the company lowered its outlook for fiscal 2025. WSJ reporter Sarah Nassauer discusses the challenges facing Target’s business. Plus, a meeting between President Trump and South African President Cyril Ramaphosa grew tense over Trump’s unsubstantiated claims that white South Africans were the victims of a possible genocide. And a report from the Boston Fed examines potential risks of the rapidly expanding nonbank lending, which is often financed by banks. Platform editor Isaac Taylor breaks down what that means. Alex Ossola hosts. Boycotting Target: A WSJ Podcast Series Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What are the reasons behind Target's sales decline?
And tensions flared between President Trump and the South African President over alleged claims of genocide of white South African farmers. It's Wednesday, May 21st. I'm Alex Osola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. Targets Troubles are mounting.
The retail giant reported tepid first quarter results this morning. In the three months ended May 3rd, comparable sales fell 3.8%, a steeper drop than analysts expected. The company lowered its forecast for the fiscal year. Sarah Nassauer covers large retailers for the Wall Street Journal. Sarah, what happened here? What is affecting Target sales?
Chapter 2: How did DEI changes affect Target's sales?
Chapter 3: What are the implications of private credit growth?
If private credit lending is growing because these loans are being made to riskier borrowers, then it could lead to an accumulation of greater systemic risk and weaken the financial system.
And tensions flared between President Trump and the South African President over alleged claims of genocide of white South African farmers. It's Wednesday, May 21st. I'm Alex Osola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. Targets Troubles are mounting.
The retail giant reported tepid first quarter results this morning. In the three months ended May 3rd, comparable sales fell 3.8%, a steeper drop than analysts expected. The company lowered its forecast for the fiscal year. Sarah Nassauer covers large retailers for the Wall Street Journal. Sarah, what happened here? What is affecting Target sales?
About those DEI changes. Target CEO Brian Cornell alluded to them in this morning's earnings call.
We will continue to be anchored in the belief that creating an environment where people feel included, supported and respected makes us a stronger company. It helps us build and support our talented team, serve millions of guests in all 50 states and be a valued partner in the communities we serve.
So Sarah, some of the negative reaction to the DEI changes included a number of nationwide boycotts. How did the company talk about those during the earnings call?
They talked about it as one of several factors that dampened sales and traffic to their stores in the most recent quarter. They didn't really get into details beyond that, beyond saying that they couldn't really quantify how much the boycott versus other factors negatively impacted sales.
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Chapter 4: How are other retailers performing in comparison to Target?
So we've seen earnings come out this season from some other big retailers like Home Depot and Walmart. Are some of the issues that made Target sales fall also affecting these other places or is it really just unique to Target?
Yeah, some of the issues are definitely affecting other retailers, especially this idea that people continue to need to spend more on needs, right? Groceries. Prices have been elevated compared to pre-COVID now for years and the tariff situation looks like it's adding to that to some extent.
Chapter 5: What strategies is Target implementing to recover?
Chapter 6: What was the outcome of the Trump and Ramaphosa meeting?
The retail giant reported tepid first quarter results this morning. In the three months ended May 3rd, comparable sales fell 3.8%, a steeper drop than analysts expected. The company lowered its forecast for the fiscal year. Sarah Nassauer covers large retailers for the Wall Street Journal. Sarah, what happened here? What is affecting Target sales?
About those DEI changes. Target CEO Brian Cornell alluded to them in this morning's earnings call.
We will continue to be anchored in the belief that creating an environment where people feel included, supported and respected makes us a stronger company. It helps us build and support our talented team, serve millions of guests in all 50 states and be a valued partner in the communities we serve.
So Sarah, some of the negative reaction to the DEI changes included a number of nationwide boycotts. How did the company talk about those during the earnings call?
They talked about it as one of several factors that dampened sales and traffic to their stores in the most recent quarter. They didn't really get into details beyond that, beyond saying that they couldn't really quantify how much the boycott versus other factors negatively impacted sales.
So we've seen earnings come out this season from some other big retailers like Home Depot and Walmart. Are some of the issues that made Target sales fall also affecting these other places or is it really just unique to Target?
Yeah, some of the issues are definitely affecting other retailers, especially this idea that people continue to need to spend more on needs, right? Groceries. Prices have been elevated compared to pre-COVID now for years and the tariff situation looks like it's adding to that to some extent.
Walmart, Home Depot both called out the fact that people continue to spend pretty cautiously on discretionary items. However, both Walmart and Home Depot reported a sales lift and in Walmart's case a pretty strong sales lift. Das ist auf der einen Seite, weil Walmart viele Gemüses verkauft und viele Gemüses, die weniger teuer sind als andere Orte und die für niedrige Preise bekannt sind.
Und das ist ein echter Drang in diesem Umfeld. Aber es gibt auch einige Dinge, die Target geflaggt hat und die Analysts und andere geflaggt haben, die auch selbst verurteilt sind bei Target. Target hat seine Vorhersage für dieses jährliche Jahr geringer.
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Chapter 7: What are the market trends following Target's earnings report?
Sie haben viel darüber gesprochen, weiter in ihre Tarjet-Image zu lehnen, was wirklich die Idee ist, dass man trendige Dinge bekommt, die nicht so teuer sind, und viele neue und spannende Produkte hat, und über die Preise denkt.
Sie haben über den Tarif-Bereich gesprochen und dass ihr Ziel ist, die Preise so niedrig wie möglich zu halten und nicht Preise zu erhöhen, wenn sie können, und es in anderen Wegen zu mitigieren. Their approach is to do more of what they have been doing, which is leaning into this idea of interesting new things and lowering prices.
That was WSJ Reporter Sarah Nassauer. Thank you, Sarah. Thank you. And you can hear more about Target's rollback of DEI policies and the impact of consumers' boycotts on the company and the Black entrepreneurs with products on Target's shelves in our special two-episode series, Boycotting Target. We'll leave a link to the series in the show notes.
Stocks finished lower today after a disappointing Treasury bond auction accelerated a sell-off in the debt market. The Nasdaq dipped about 1.4%, the S&P 500 dropped roughly 1.6%, and the Dow fell more than 800 points, or 1.9%.
Top Republicans pushed for a quick vote on President Trump's multi-trillion dollar fiscal package today, as negotiators raced to find the right combination of tax breaks and spending cuts to please warring wings of the party. Passage would mean a major win for Trump, marking a step towards extending tax cuts and cementing other conservative priorities.
But the fate of the measure is still up in the air. This afternoon, some holdouts warned that the legislation was unlikely to cross the finish line by House leaders' target of later today. As House Speaker Mike Johnson was leaving for an afternoon meeting at the White House, he said that the bill was moving along on schedule and that he was optimistic.
South African President Cyril Ramaphosa came to Washington seeking what he called a reset in relations with the U.S. But his meeting with President Trump in the Oval Office today devolved into a tense exchange over perceived threats to white farmers in South Africa.
During a lengthy back and forth in front of television cameras, Trump repeatedly made unsubstantiated claims that white South Africans were the victims of genocide. And he alleged that the country's government wasn't doing enough to protect them. Ramaphosa pushed back against Trump's claims.
There is criminality in our country. People who do get killed, unfortunately, through criminal activity, are not only white people. The majority of them are black people.
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