The results showed that the budget retailer is still struggling to regain its footing after last year's data breach, which exposed millions of customers credit card numbers to hackers -- ultimately resulting in the resignation of Target's CEO Gregg Steinhafel. Target has also suffered from a disappointing Canadian launch, which led to the firing of Canadian operations head Tony Fisher on Tuesday. And if luxury retail results are any indication, Target may also be feeling the pinch of higher-end consumers trading up.
$TGT yep moving to Canada was a bad move which will keep on giivng? sort of a money pit? Old Turkey (@Partridge) May. 21 at 08:20 AM
Though Target missed, results ultimately weren't as bad as most had predicted. The firing of Steinhafel and Fisher had many expecting a terrible quarter that would be blamed on the leadership -- or lack thereof -- of the two men. The stock is down nearly 6% since Target fired Steinhafel. It opened 0.6% higher Wednesday.
Target and Tiffany confirm the relative strength of the high-end trade. Retailers that topped EPS expectations last quarter include Nordstrom (JWN) and Bloomingdale's owner Macy's (M). Meanwhile, budget stores such as Walmart (WMT) and Target(TGT - Get Report) have missed consensus EPS estimates.
Investors say the strength of high-end store results are leading them to bet on other luxury retail brands, namely Michael Kors (KORS). The company reports earnings on May 28, before-the-bell.
But few watching the retail numbers would want to load up on cheaper brands.
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At the time of publication the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.