Target responds to 'challenging' earnings report

Target reported last week its profit plunged 90% in the second quarter, falling far short of expectations, according to CNN Business, which said inflation-weary customers pulled back on spending on so-called nonessential items.

Because consumers have shifted spending to higher-priced food and gasoline, Target joined other retailers in cutting prices on general merchandise, such as clothing, electronics and home goods because of excess levels of inventory, CNN reported.

Target CEO Brian Cornell called the company's earnings report "challenging," but added the firm with the bright red and white bull's-eye logo is seeing "an encouraging start to the back to school" shopping season.

Target's disappointing numbers mark the second consecutive quarter of plunging earnings for the retailer — which had immediately prior to the downturn witnessed seven quarters of strong profit growth.

Rival Walmart reported its profit was down only slightly from the same period a year earlier.

Analysts point out Arkansas-based Walmart gets a higher share of profits, unlike Target, from sales of essentials such as groceries.

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