Online rumors abound as corporate leaders from three of the country’s top retailers separate fact from fiction.
The contents of this article are fully-attributed to several financial publications and media outlets, including Snopes.com, BusinessInsider.com, Investor.Costco.com, CNBC.com, and Yahoo FInance. Direct links to all listed and attributed sources are included below.
It may seem not a day goes by when a news report or social media posting about a popular chain retailer is either globalized or entirely misconstrued. Rumors begin; sometimes panic ensues. For instance, a simple store closing is perceived as an entire company going out of business. Online posters then share the information with their own followers, complete with skewed commentary about the company closure.
As a specific example, Costco was widely reported in early 2021 to be closing stores across the United States. Snopes.com picked up on the matter, which led to their invalidation of the matter. See here for “Is Costco Closing Stores Across the Nation?”
From the article: On Feb. 10, 2021, an online advertisement appeared to announce big news about Costco Wholesale. The ad was displayed on various websites via the Outbrain advertising network. It featured a picture of a Costco store and read: “[Pics] Say Goodbye: Stores Closing In 2020 Across The Nation.”
The issue was Costco was never mentioned in the advertisement, though stores that were shuttering around the country, such as Macy’s and others, were. The Snopes article explains the issue, which shows yet again how easy it is to spread online rumors.
This article will briefly delve into the present financial health of Costco, Home Depot and Target, three of our most popular chain retailers.
Closings: Fact vs. Fiction
To be clear, Costco is not closing. In fact, BusinessInsider.com reported in June of 2021 that the chain was adding stores. See here for “Costco is Opening 5 New Stores Across the US This Summer, as its Sales Continue to Boom After Lockdown.”
They have closed stores in the past — see here for “Costco Wholesale Corporation Announces Plans to Close Costco Home Stores” — but that was back in 2009.
In 2022, Costco, the company, is in no danger of closing.
An August 2021 report from CNBC.com, entitled “Home Depot Shares Tumble Despite Earnings Beat, Retailer Rang Up Fewer Customers as DIY Trends Weaken,” describes how earnings were higher than expected in the second quarter, though the company stock did not follow suit. See here.
From the article: While Home Depot’s quarterly profit and revenue beat Wall Street estimates, same-store sales came in slightly below expectations as the company lapped a period a year earlier when customers flocked to its stores to buy paint, wood, gardening supplies and other materials for home remodeling projects. CEO Craig Menear said that while consumers are returning to pre-pandemic activities outside of their homes, the company still sees people engaged in house improvement projects, and increasingly larger projects. Sales from the professional customer, though, outpaced those of the DIY customer for the second quarter in a row. U.S. same-store sales were up just 3.4% in the latest quarter, compared with a 25% jump in the year-ago period.
The article goes on to explain its earnings per share for its fiscal second quarter was $4.53 vs. $4.44 expected by Wall Street, with revenues of $41.12 billion vs. $40.79 billion expected.
Like most companies during the pandemic, numbers were not aligned with prior years, though Home Depot still performed better than most DIY-type entities.
Target’s corporate office has also seen its share of online rumors. In this instance, however, financial reorganizations have been and continue to be in process. See here for Yahoo Finance story, “All the Target Stores Set to Close in 2021.” Though the article is from 2020, it is worth heeding for words on company strategy moving forward.
From the article: In 2020, department store Target announced a massive restructure that would see many of its stores close their doors or convert into Kmart. It came after parent company Wesfarmers deemed the current business model “unsustainable” in May last year. “For some time now, the retail sector has seen significant structural change and disruption, and we expect this trend to continue,” Wesfarmers managing director Rob Scott said in a statement at the time.
A list of the individual Target stores that were closing at the time are in the article.
Online rumors tend to spread quickly, regardless of issue. When it comes to thoughts of closing certain favored or long-lasting chains, however, those rumors are often quickly reported as fact or posted to lesser media outlets as clickbait.
Neither Costco, Home Depot nor Target are in imminent danger of going out of business, permanently or otherwise, though Target is the least financially healthy of the three. On the part of Costco, the rumors strengthened to a degree that Snopes took the time to post a ”False” claim to the rumor. Home Depot is considered to be in strong shape as 2022 begins, while rumors of Target’s demise began due to reports of individual store closings or transformations into K-Mart in 2021.
According to economic experts, all three chains are expected to survive for the immediate future.
Thank you for reading.