Target's Inventory Is a Big Problem. Here's What Investors Need to Know.

Retail giant Target (NYSE: TGT) has come under the spotlight of late due to its inventory problems. Put simply, the company has too much of it, and it needs to downsize. The situation is troubling enough that the company updated its guidance just weeks after issuing it. Here's what investors need to know about the current situation, and what it means for the stock.

One metric in retail that investors find useful is the number of days inventory is outstanding, or how long it sits on store shelves before it moves. Fast-moving inventory means revenue is strong, and the company doesn't have stale products taking up space. However, inventory turnover slowed dramatically last quarter for Target, rising to more than 71 days -- the highest it has been since before 2020: