(NYSE: TGT) shareholders have some good reasons to feel better about their business heading into the holiday shopping season. The retailer managed to protect its profit margins despite a difficult selling environment in 2023. Even as shoppers reduced spending in many of its core categories like home furnishings, Target's earnings and cash flow remain strong.

The news isn't as good around customer traffic trends, which worsened in the most recent quarter. Let's take a closer look at that red flag in the context of Target's wider business.

Customer traffic was down 5% year over year in the Q2 selling period that ran through late July, and that slump was the main factor behind Target's surprising 5% drop in comparable-store sales. Comps were flat in the prior quarter and customer traffic was up 1%, meaning trends worsened through the early summer months.

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Source Fool.com