Yes, the company wasn’t prepared either for cost inflation that hurt their profitability.

Curiously enough, neither were the investors, after all – they expected Target to sail well through this inflation!

However, such drops are predictable and statistically inevitable.

Why?

Look at this eye-opening chart of Target profitability (their operating margins) – being at the PEAK already!!

So, when you are at the cyclical peak, there is only one way  – DOWN, when you are at the peak something bad always happens – inflation, sales slowdown, or a new competitor entering your lucrative franchise…

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