Zinger Key Points
- CEO Cornell says prices for fresh fruits and vegetables will rise in response to higher tariffs.
- He says consumers will see higher prices in the next few days.
- Every week, our Whisper Index uncovers five overlooked stocks with big breakout potential. Get the latest picks today before they gain traction.
President Donald Trump's new tariffs went into effect on Tuesday, rattling businesses and consumers. Target CEO Brian Cornell said on Tuesday that shoppers will see higher prices on the shelves as soon as this week.
The Details: Cornell told CNBC in an interview that prices for fresh fruits and vegetables will rise, including avocados, strawberries and bananas imported from Mexico due to the 25% tariff now in place.
The CEO explained that due to the nature of fresh foods' "really short supply chains," shoppers will see the prices go up quickly.
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"Those are categories where we'll try to protect pricing, but the consumer will likely see price increases over the next couple of days," Cornell said.
"If there's a 25% tariff, those prices will go up," he added.
Target will work to keep prices low and provide value to its budget-conscious customers by reducing its reliance on goods imported from China and Mexico. Cornell said Target has already reduced its goods from China from 60% to 30% and is on the "path to get it down to 25%."
Looking Ahead: The retail giant released its fourth-quarter financial results on Tuesday morning and cautioned that it sees "meaningful" pressure on profits in the first quarter.
"In light of ongoing consumer uncertainty and a small decline in February Net Sales, combined with tariff uncertainty and the expected timing of certain costs within the fiscal year, the Company expects to see meaningful year-over-year profit pressure in its first quarter relative to the remainder of the year," Target wrote in its press release.
Cornell said "there is some concern about tariffs" that adds to the pressure already facing inflation-weary and "cautious" consumers.
"We will continue to monitor these trends and will remain appropriately cautious with our expectations for the year ahead,” Target CFO Jim Lee said.
TGT Price Action: According to data from Benzinga Pro, Target shares are down 4.07% at $115.85 at the time of publication Tuesday.
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