companies have gotten away from that because for the most part the estimates have been okay but brian cornellim, people have been talking about the product mix and the inventory issues as if brian and management at target couldn't have simply raised prices enough i thought, and brian sort of indicated, that the consumer and the customer is more important, maybe, than the bottom line at different times and maintaining market share you think there was more to it than just being resistant to raise, to pass along the increased costs? >> they had the wrong merchandise. it wasn't so much that they traded down is what walmart said, they traded around i mean, they went to luggage, they went to toys for birthday presents they didn't go to appliances but most of the appliances they sell at target are not like what they had at home depot i think the difficulty that i'm having is home depot had one of its best quarters in history, and they would tell you, that look, as long as the home is going up in value, up 40% over two year, and people are going to spend a lot of money on a home because it's not an e

talking directly about what the fed chair is trying to fight, this crazy inflation and what brian cornell is trying to deal with, a billion dollars in freight, the forecast there, it's an astounding number which cornell says things have changed from even 13 weeks ago, sure, the product mix may not have been right. the consumer started to shop differently but then he owned it we didn't project properly we own that. i own that i mean it's about as contrite as you've ever heard a ceo be on television after their numbers are bad and the stock really dictate what is they'll have to do in terms of their messaging for more on that let's bring in hightower's stephanie link it's good to see you we had to talk to you because we had a conversation yesterday after walmart on overtime where i asked you directly if you were worried. you said you are or you were about what target was going to deliver now they delivered it. what do you say now? >> yeah, it's not a great day for me because i own it. the offset is i also own tjx so a small positive to that today but on target i thought cornell did a good j

dramatic when any company like that delivers the rapid deterioration in the picture, whether it is brian cornellalking about rapid deterioration in his ability to, you know, deal with inflation that has dramatically impacted that business, or when evan spiegel of snap a month ago not even a month when they report earnings, talking revenue to grow between 20 to 25% year over year now it is 15% or less. that's pretty amazing. >> oh. absolutely this is really hard. we take one step forward like yesterday and two steps back today. and that's been the market all year long. there are a lot of cross currents going on. and there's more and more recession talk which i think is premature. we learned a lot about what happened in april in this economy. we had a change in consumer behavior they were not buying as many goods. they were doing more in terms of services, see if that lasts, and inflation and interest rates took a toll on them. that's on the consumer side. none of that is that surprising, but the speed of which it happened was staggering. walmart and target are great, great operators. for them to

we heard that from brian cornell. we don't know where the consumer will be in 150 to 200 basis points all the market has done is priced stocks in an environment where rates are lower and mechanically say, what are we willing to pay that was held with the consumer and businesses held constant today that's what's shocking walmart and target could be treated like zoom and docusign it is as if they earnings were more important than apple and microsoft. maybe there's some solace doesn't tell us where we're going to go in the market, but we came in today having rallied almost 6.5% in three days. this is an environment where we've had this kind of rallies and complete washout days. this washout day still has you, the s&p didn't go through the intraday low last thursday, and i think that's part of how do you have to drop it into a perspective. again, we've had a massive rally coming into this. >> with the volatility has absolutely spiked in a single day, jeff, but to tim's point, this violent churning we are seeing in the mar

we had brian cornell on this morning. i want to emphasize what he said-he said healthy overall spending leverages but spending -- the shift in spending is shismted in a different direction here he sees strength in food and beverage he says we're softer in tvs and apleenss the consumer is still spend bug maybe a slight shift in the mix. thab they're forced to spend more because of the higher costs for food and beverages but still a pretty healthy consumer overall here what's the retail trend? it seems tough to call right now, but generalry ly sales are still good the consumer is healthy. higher costs and some pressure in terms of lower profits and it's starting to show up in some company, particularly in target, with some margin compression, particularly with target they were expecting 8%, 9%, now we're talk about 5% for the rest of the year. and then, yet, you get continue dp -- confused tjx seems like the opposite. their sales were light but beat on earnings, exact opposite of what everyone was talking about. they were t

these are two key weekends for lowe's >> what about target it's down today because of walmart. >> brian cornell'shat brian will do a good job i don't think you'll see inventories balloon. i don't think you'll get a sense -- that the consumer is weak there look, i'm disgusted. i told a lot of walmart higher for my trust >> i didn't get the sense that walmart had bad numbers for the consumer it looked like the consumer was good their comp store sales were upt a transaction was up too execution issues -- >> versus kroger kroger executed very well. albertsons executed well, not as good as kroger this was bad execution there ought to be a big meeting, get it together and should say, okay, look, we're not doing as well why is it? we were making a comeback, what do we do wrong did we have the wrong merchandise? did we misjudge the consumer what happened? >> jim, one more topic i got to get you on musk this morning seems like we are either in some grand -- renegotiation or we've got a deal that's not happening. what do you think? >> he must really hate brett tailor he's torturing the man, the chairman he

target's ceo brian cornell talked about what went wrong >> the challenge for us in the quarter was the the house. from the freight and transportation standpoint. things changed from 13 weeks ago. we did not project, i did not project the significant increases we would see in freight and transportation >> let's bring in jan niffen and anisha sherman cover retail jan, let's start from the big box retailers. target and walmart getting caught flat footed here. not just with the increase of pricing for freight and anything related to transportation costs, but also having the wrong mix. too much inventory in the wrong areas. that is really, really unusual to see those two get caught in a trap like that i wonder what happened what do you think? >> becky, i was the treasurer of the s&p 500 in '87 which is scarier than this. from walmart and target, it is surprising one thought we would do a better job because they wound up with way too much inventory at the wrong time and did not mark it up to cover cost structure it is bad timing these are two of the greatest retailers of the world they all g

cost of fuel and freight to transport goods was significantly higher than expected ceo brian cornell doesn't expect the question to abate anytime soon >> fuel and diesel costs will hit us about $1 billion of costs in the fiscal year a significant increase that we did not anticipate >> reporter: on the media call, cornell says the consumer is still healthy and engaged, but shifting what they are buying. food and essentials and beauty sold well at target. discretionary categories like tvs and bikes didn't target did not pass on all of the higher costs in the form of pricing to consumers which might have been to help drive traffic and sales up 3.3% for comparabl sales. it was a different story at lowe's the home improvement retailer put up stronger than expected profit, but missed on revenue and comparable shares. lowe's shares fell 5%. ceo marvin ellison pointed to the cold weather for delaying purchases with nearly three quarters of consumers considered do it yourselves the coldest weather in years kept shoppers from buying outdoor and other improvement purchases from the spring. he i

ceo brian cornell says an increase in costs shows little sign of easing. is greg melich, evercore isi analyst. a price target of 225. why are we down so much? i thought walmart prepped us for this. why is the market caught off guard? greg: i think the extra 15% in target was they guided in early march. they said their margins could be more than a percent this year. we thought they would guide to something between 7% and 8%, and today they said the margins are going to be around 6%. that is the extra punishment for target. probably why it is down 24% and not 12%. guy: is this a one, two quarter phenomenon or a reset that is going to last longer? greg: fingers crossed, if the consumer holds in there as they have been there should be a one or two-quarter phenomenon. the real question, this ties into what walmart and other retailers are starting to report over the last month, is starting to see trey down, are we starting to see demand destruction from all of the inflation out there? brodd speaking, we do expect retail sales to accelerate. think the second quar

macy's, maybe we're not ready to write off that story yet because if you listen to them, even brian cornell, target issues were not related to a slow down in the consumer, cornell said that as much on the day of the earnings report when the stock fell out of bed, and hit his head on the floor. you want to say something? >> he has shipping costs, labor costs. >> josh, i want to take a different spin on demand destruction. i think there's demand reallocation last week when i was on, i said something about the consumer is strong still, there's still a ton of money in consumer pockets and i got beat up for that we're seeing this week that's true people might be driving less, maybe buying stuff at dollar general instead of wherever they were buying before people are still spending. i do not think the fed does or can turn the consumer on or off. you are just seeing reallocation of dollars as a portfolio manager, i don't worry about the fed that much. i believe the fed will be flexible and will act as appropriate and bob and weave as they go. from investment perspective, the way to approach this i

target, the proximity between the last bit of guidance and this one, and how jarring that was when brian cornell was on squawk, and certainly no different today with evan spiegel's comments. >> and wise comments from art cashin about the levels we're watching on the s&p. i believe he said 3815 we're a ways from that, getting back toward the levels, we are under 3,900 where it shows that investors are nervous. let's talk snap, and how its earnings are being felt across tech with julia boorstin, hey, julia. >> hey, john, what a dramatic decline for snap, and the thing that i'm most focused on here is the fact that it's been just about a month since snap gave its guidance for the second quarter, and not only do they guide between 20 and 25% revenue growth in the second quarter and now they're coming in and saying it's going to be below 20%, but i want to go back to the kind of insight that evan spiegel gave to revenue growth at the beginning of the year. at the beginning of the year, he said they were growing revenue 44%. then that slowed down after russia's invasion of ukraine, and all the market

anticipated and they both ended up paying workers more than they initially budgeted for target ceo brian cornell really explained a lot of the issues in the quarter were for back of house issues again, things that should have been better managed by the company. not the front of the house the consumer is actually very health india healthy and engaged. but appears consumer are sp spending more on food, household essentials and beauty, we're traveling more that's showing up, but less on tv, appliances and bikes. walmart financial officer said the consumer generally is okay, trading down to private-label lunch meat and buying more half-gallons of milk than usual but also buying gaming consoles and patio furniture. >> summer is on the way. what comebacks should we look for from walmart, and target and other retailers. >> any relief when it comes to the cost of energy will help across the board both retailers managing the businesses and consumers filling up the tanks hoping to have money left in the wallet when they are go to the store to finish their shopping and i think an increase in spending on di

listen you give props to brian cornell.word but how the heck did he miss the supply chain issue and the inflation-related issues? shareholders in the meantime voted to reject the $50 million retention bonus that jpmorgan ceo jamie dimon, guess what? he gets the money anyway, in fact total compensation for last year? $84 million. i don't want to sound like elizabeth warren, but golly, stock was down 13% in the last year, the s&p is up 22%. by the way, not every ceo so lucky according to challenger and grey, 518 ceo's have hit the door, they hit the bricks, that's a record right now, so i know you're suffering and i know a lot is incompetency at the top we have to keep making our voices heard in the meantime hang in there. we got your back you got one more hour of trading up so buckle up cheryl casone is in for liz claman, cheryl over to you. >> hang in there that's a good way to phrase this one, charles. good to see you, sir. so much for finding the bottom here, everybody. investors cannot find a target today, pun intended a

when absolutely no news other than the fact that target which we like so much, brian cornell is suchdly you didn't feel any comfort in this group because that company did so poorly. but the big four aren't the only that reported this week. some of the small players did well and we want to highlight them tonight we're looking at the other retail because i don't think they were talked about enough. we'll take them in con logical order. on wednesday we heard from tjx and bath and body works. it is an off price retailers and buying excess inventory for next to nothing because they want to clear their inventory out. and then sells it to you with a nice little markup while the results were mixed, earnings beat and the guidance was decent and the full year forecast was encouraging. but if you know why it managed to rally, it is because the company preys on the weakness of other retailers. for several quarters they couldn't get their hands on excess merchandise it was not promotional until now. but with this glut and you when see walmart and target struggling, you know tjx won't have a probl

thing i was going to say about what happened with target yesterday is that i actually thought that brian cornell, he's a great operator great ceo. i think what he said about consumer, that they were shifting, right, from a higher price, higher margin things to like luggage, that did not make me feel better all you have to do is look at airbnb at 52 week lows and say that doesn't mesh up that well food inflation though and my friend danny moses just said this to me as it relates to walmart and target, food and the higher prices in places like walmart and target, that's taking more of the cartright there. >> right. >> that is a problem for the consumer because all those things that tim just detailed are not getting any better any soon right now because the fed hasn't started the quantitative tightening they raised 75 basis points at two meetings we know the delay that it takes for that to work into the economy. i think that we're probably not as close to the end of this cycle, this tightening cycle as a lot of people who were bullish on the stock market think we are. >> with all of that said, kare

in fact, brian cornell, the ceo of target on the conference call was getting really beat up by the analyst community on that call. at one point they said and this really surprised me. he said we underestimated by hundreds of millions of dollars what we were going to have to pay out for freight and transportation cost, and again, the stock is just really just cratering today. >> well, obviously, he's paying the price for that, but i don't think that if you really had a show of hands, there's a lot of folks out there that probably would have been in that same boat. this inflation, this gasoline- diesel-energy situation has really cascaded and it's actually snowballed while its cascading and that's the big problem there. we're a ninth day in a row for record highs in gasoline. i expect it to go over $5 a gallon like a lot of folk do and maybe $6 a gallon for diesel so how is that going to look what's the retail landscape or our trucking or what's our transportation landscape going to look like when we start to see prices at that level? somethings going to have to break. we've given the fed a

it was hotter than brian cornell thought, hotter than doug macmillan thought. >> it tells us something this weekend. >> april was a terrible month in this country, a horrible month >> rain every day too. >> when it's 96, the plants will all wilt >> unless it's raining and gets watered. >>t i have to get a sprinkler system april was horrible i'm talking to jay stay focused >> sign up to the cnbc invest club to find out more or point your phone to the code on the screen and it will take you ere. "squawk box" will be right back. massively complex supply chain to satisfy cravings from tokyo to toledo? so you partner with ibm consulting to bring together data and workflows so that every driver and merchandiser can serve up jalapeño, sesame, and chocolate-covered goodness with real-time, data-driven precision. let's create supply chains that have an appetite for performance. ibm. let's create. flexshares etfs are built with advanced modeling. to fill portfolio gaps and target specific goals. strengthening client confidence in you. before investing consider the fund's investment objectives, r

one of the weird kind of existential moments in the target call where brian cornell says they're buying sunscreen. serious businessman. what he's basically saying is they're not to ding what we thought they were doing. they're just buying little things now and they're traveling. luggage. so what people are doing is doing something that we should have i think maybe presumed, which is that they're seeing the world, doing things with their lives because they've been locked down. they're not trying to spend even more time at home. they want to get on the road phil lebeau would certainly tell you that too anyone who's flown knows you can just add a zero to wherever you go with the airline tickets. >> you mean the fare >> i think there's still not demand destruction because people are so happy to get away and they use airbnb, so it's not like they're getting caught with a hotel, but i am just shocked at the number of people who were misjudged. people wanted to go away and where they go does not add up to retail they just aren't -- they're off -- they're not going in the aisles en masse. off c

brian cornell can be so difficult himself that i cringe how difficult he can be.ringe >> because you suggest it's pure execution issue, the market itself isn't hanging on what walmart didn't do, it's more focused on where we've been in the marketplace. if this was an issue beyond execution by mcmillen and team, maybe the market would have a different reaction this is -- walmart is down home depot is up and the market is going to be up nicely as well trying to figure out if we're getting this bear market bounce or not or if it has any kind of staying power. >> three weeks ago, walmart was at 160, there's your bear market bounce 160. now it's at 138. do you ever go bowling -- >> those are gutter balls. >> big difference between 160 and 138. >> doug mcmillon is a nice guy >> did he underhand it in the gutter >> no, he had bumpers. >> coming up, we're going to go wh whale-watching, and a look at the names that warren buffett is buying and selling markets are going to open higher. >> they executed great those guys did great talk about a tough environment housing is off

and mortar when you saw brick and mortar was worse than them, remember, the fabled comments by brian cornell about what people wanted, what were the two things people bought? >> luggage and sunscreen >> what did my ollie's army pitch? they had a coupon for sunscreen. >> it's important to put on sunscreen. a few hours go by, you apply again. >> david, i'm saying, they must have an algo that's a limited group of things that the public wants. go back to amazon for a second i am saying i thought the problems were with amazon and it turns out april was a horrible month, march was just okay the problems are not with amazon >> all right >> it's with the buyer here, we should mark it down to whatever the price is today >> yesterday, june 7th, 1039 >> 1036. >> i think that jasi has had enough, i think jasi is done, i think jasi is going to go into overdrive. i think jasi for a moment there was focused on some other things jasi's focused on money. >> did you see bezos' tweet the other day, investors want them to stay focused on north american retail. >> i think now that we know that all the other reta

ceo brian cornell says the surge in the price of fuel and freight cost them $1 billion more this year, you know, used to buy things like electronics and appliances. now they are buying groceries and luggage to travel. that's some good news. the historic sell-off is hitting the entire retail sector with very few exceptions. names that operate on thin margins like dollar tree and dollar general look at those declines 16% for dollar tree. goldman sachs says they are see ing customers tap into their credit and mortgage equity to pay for the rising cost of living. so is the consumer strong enough to prevent a recession or get us out of a recession? jay powell confirmed he's not going to hesitate to about aggressively to raise rates to bring down inflation, and that is being felt in tech huge declines for these popular names as you can see here, higher rates hit their future growth. it's also being seen in the housing market. permits for future homebuilding hit a five-month low in april that means supply stays tight, the 30 year, now at 5.3% look at this translation. we talk about higher co