Brian Sozzi Says Target & Shareholders Off The Mark At Shareholder Meeting

In a research note, Brian Sozzi of Wall Street Strategies has a note on Target (NYSE: TGT), as the company held its annual shareholder meeting today.

In the note, Sozzi talks about the many different initiatives Target is undertaking, such as pushing into Canada, remodeling U.S. stores, and launching City Target in 2012.

Shares of Target have performed horrible since the beginning of the year, down 22.2% year to date, so Sozzi takes a look at what is causing Target to miss the mark in terms of building shareholder value.

He notes that gross margins are falling, reflecting a weaker product mix. Target has begun to sell more groceries, competing with Wal-Mart (NYSE: WMT) and fewer clothes. Groceries have lower margins. The push into Canada is ating at earnings, as operating expenses are heavy as the company rolls out stores. Sozzi also goes on to say that the company is losing market share, to both Kohl's (NYSE: KSS) and J.C. Penney (NYSE: JCP) in apparel, and to Bed, Bath & Beyond (NASDAQ: BBBY) in home goods.

Sozzi also say, "Boundaries of cheap chic model tested with more upscale department presentations; price perception impacted."

At last check, shares of Target were off 25 cents to 46.81, a loss of 0.53% on the session.