There is some panic in the retail sector as Target’s (TGT -27.6%) earnings report and commentary raised concerns about slowing discretionary spending.
Wells Fargo analyst Edward Kelly said consumers are clearly being forced to make tougher decisions with inflationary pressures everywhere and appearing to be retreating into some categories of discretion just as the stimulus ends. On the expenditure side, freight and transport costs were already at high levels, but are now under even greater pressure with rising fuel costs which may not be fully passed on to consumers.
Household products fell on the heels of the Target report and the guidance slash, led by declines with Revlon (NYSE: REV -15.1%), Newell Brands (N.W.L. -10.3%), elven beauty (ELF -8.7%), Spectrum Brands (SPB -6.2%), Clorox (CLX -6.3%), Procter & Gamble (PG -5.8%), Church & Dwight (CHD) -5.8%) and Kimberly-Clark (KMB -3.8%).
The food sector is also underperforming with JM Smucker (SJM -10.0%), Kraft Heinz (KHC -8.9%), Campbell’s Soup (CPB -8.1%), General Mills (GIS -7.7%), Heavenly Hain (HAIN -8.4%) and Beyond Meat (BYND -5.6%) some of the notable decliners.
Read about the general market action: Dow Jones drops more than 1,100 points, Nasdaq and S&P 500 sink amid consumer stock carnage