Target beats low expectations with clean inventory levels

Target reported better-than-expected earnings, benefiting from clean inventory levels and stronger sales of essentials. While the company faced controversy around pride month collections, which impacted profits last quarter, the overall gross margin was better than expected. However, consumer spending trends indicate a preference for essentials rather than discretionary items. Off-price retailers like TJX are performing well, particularly in apparel, which is experiencing increased sales. The luxury segment remains in a world of its own, with premium brands showing resilience and attracting high-end consumers. The impact of social pushback on sales is becoming more significant for retailers and consumer goods companies, highlighting the need for careful navigation of social and political issues.