🔴 TGT drops 5.3% pre-market despite Q1 beat, as rising costs and lower margins spook investors

TGT is trading 5.3% down at $120.50 pre-market, as investors look past a strong Q1 earnings beat and focus on underlying cost pressures.

• Target beat Q1 expectations with 6.7% sales growth and raised its full-year sales guidance.
• Despite the positive top-line results, the stock is falling due to investor concerns over rising SG&A expenses and a lower operating margin compared to the previous year.
• The negative reaction to the strong report suggests a 'sell-the-news' event, with the market prioritizing profitability concerns over sales growth.