Jim Cramer acknowledged Wednesday that Club holding Walmart (WMT) isn’t the only major U.S. retail chain struggling to operate in the Covid pandemic and inflationary environment. However, he’s still not happy. Target ‘s big earnings miss shows other management teams are struggling to navigate through it, too. Shares of Target tanked roughly 25% in Wednesday trading. A close of this magnitude would be Target’s worst single-day drop since Black Monday in 1987. Walmart suffered the same fate the day before, and shares fell another 6% during Wednesday’s session. “I apologize to Walmart, that I thought that Walmart was the only one that got it wrong, until I saw Target,” Cramer said on “Squawk on the Street.” He added in the Club’s “Morning Meeting” he took Walmart more personally because he doesn’t want to lose money for the portfolio. Cramer said he thinks Target, under the leadership of CEO Brian Cornell, actually performed worse than Walmart and its CEO, Doug McMillon. On Tuesday morning, Cramer said the way Walmart management steered the retail giant through the quarter was “embarrassing.” A day later, Cramer said, “Brian did worse than Doug, OK? He did worse than Doug, and I expected more from Doug or else I wouldn’t have owned the stock for my Charitable Trust.” By the numbers The retailers saw declines in profitability, compared with the same period a year ago. Walmart’s net income fell to $2.05 billion from $2.73 billion. Target reported net income of $1.01 billion, down from $2.1 billion in the first quarter of 2021. Walmart and Target both said higher inventories weighed on their results, along with other cost pressures such as higher fuel prices. The companies adjusted parts of their full-year outlook, too. Walmart now expects earnings per share to decline by about 1% for the year; previously, it expected EPS growth in the mid-single digits. Walmart did raise its full-year sales guidance, though, forecasting a roughly 4% increase in constant currency. That’s up from old projections of about 3% growth. Target, meanwhile, now projects an operating margin rate around 6% for the fiscal year; on March 1, when it reported Q4 numbers , Target issued full-year guidance that said its operating margin rate should be 8% or higher. While Target said it continues to forecast revenue growth in the low-to mid-single digits, it did not include full-year adjusted EPS guidance in Wednesday’s earnings release . On March 1, Target’s fiscal 2022 guidance called for “high-single digit” adjusted EPS growth. They should’ve preannounced One of the most frustrating parts of Walmart and Target having worse-than-expected numbers is the manner in which the companies informed investors, Cramer said. He argued the retailers should have preannounced their troubles weeks and weeks ago, instead of just dropping such bad news on their previously scheduled days to report their results for the quarter, which ended on April 30 for both of them. “It would’ve been great to have a heads up from these companies saying, ‘Look, we made projections a few months ago. Projections are not coming true,'” Cramer said. “When you’re off this much, I think it’s incumbent upon you not to wait until your report date,” he added. “Here’s what I would’ve done, if I were these people: The day that we got the last weekend in April … they should’ve put out a release saying, ‘Listen, we didn’t make the numbers. Preannouncement, we didn’t make the numbers,'” Cramer suggested. (Jim Cramer’s Charitable Trust is long WMT. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
