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Target earnings down as it moves out merchandise that didn’t sell

MANDEL NGAN/AFP via Getty Images

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Target earnings down as it moves out merchandise that didn’t sell

Target posted quarterly earnings on Wednesday that were much weaker than Wall Street expected, as the retailer got rid of excess inventory that built up as shoppers’ shifted their buying habits. Target said on Wednesday its comparable sales grew 2.6 percent in the second quarter, versus the same period last year. That was slightly below Wall Street analysts’ expectation of a 2.8 percent increase. Target’s net profit plunged to $183 million in the latest quarter, down 90 percent from the year before. That was far below what analysts expected, even after the company had warned in recent months that unwanted inventory would dent its earnings. Overall, US retail sales were virtually unchanged in July, slowed by the falling price of gasoline, the Commerce Department said Wednesday. That followed a revised 0.8 percent rise in June, which was driven in part by accelerating prices at the gas pump. — NEW YORK TIMES

HOME IMPROVEMENT

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Lowe’s giving bonuses to ease the pain of inflation

Home improvement retailer Lowe’s is offering hourly employees $55 million in bonuses to help offset the sting of inflation, which has remained near 40-year highs all summer, the company announced on an earnings call on Wednesday. Lowe’s is offering this incentive, even as inflation moderated slightly, with gas prices softening in July from their peak the previous month, a welcome sign for the policymakers at the Federal Reserve, which has been raising interest rates to combat inflation. Lowe’s is not the first company to offer an inflation-related paycheck bump to its employees in a red-hot labor market where employers are struggling to hire. The financial firm USAA gave some employees a one-time $1,000 bonus. Other business around the United States have been offering workers bonuses and gift cards to offset the cost of gas. A draft of a bill in Congress is currently proposing a 2.4 percent inflation bonus for Department of Defense employees who makes $45,000 or less. — WASHINGTON POST

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FINANCE

Bank of America says overdraft revenue plummeted 90 percent

Bank of America says the revenue it gets from overdrafts has dropped 90 percent from a year ago, after the bank reduced overdraft fees to $10 from $35 and eliminated fees for bounced checks. The nation’s largest banks are moving away from the practice of charging exorbitant fees on what are mostly small-dollar purchases after years of public pressure. Bank of America CEO Brian Moynihan told the Associated Press that he expects whatever residual income the bank earns from overdraft fees will come from small businesses using overdraft fees as a convenience. — ASSOCIATED PRESS

TECHNOLOGY

Latest iPhone to be launched Sept. 7

Apple is aiming to hold a launch event on Sept. 7 to unveil the iPhone 14 line, according to people with knowledge of the matter, rolling out the latest version of a product that generates more than half its sales. The new iPhones will kick off a busy fall product season, which will also include multiple new Macs, low-end and high-end iPads, and three Apple Watch models. Apple is updating its flagship product at a precarious time for the industry. Smartphone sales have begun to flag as consumers cope with inflation and a shaky economy. But Apple appears to be faring better than its peers: The iPhone sold well last quarter,and the company has signaled to suppliers that it doesn’t foresee a dropoff in demand. — BLOOMBERG NEWS

INTERNATIONAL

Inflation hits double digits in Britain

Consumer prices in Britain continued to jump higher in July, rising 10.1 percent from a year earlier, the fastest pace since 1982. Rising food prices pushed inflation into double digits for the first time in four decades. The inflation rate rose higher than economists had expected, increasing 0.6 percent from the previous month, the Office for National Statistics said on Wednesday. The annual rate of inflation rose from 9.4 percent in June. Inflation is still a couple of months away from its expected peak, which isn’t expected until autumn, when the cap on household energy bills is reset. At that point, the economy could enter a long recession as high energy prices lead to a drop-off in consumer activity and restrain businesses, according to the Bank of England’s forecast. — NEW YORK TIMES

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INTERNATIONAL

Tencent posts first revenue decline

Tencent logged its first-ever revenue decline after online advertising sales fell by a record, underscoring the extent to which China’s worsening economy is hurting its biggest corporations. The country’s most valuable company slashed 5,000 jobs or nearly 5 percent of its workforce — the first quarterly drop in staffing since 2014 after layoffs rippling through the global tech sector finally hit the WeChat operator. Revenue fell a deeper-than-projected 3 percent to 134 billion yuan ($19.8 billion) while net income also missed estimates, plunging 56 percent in the June quarter. Tencent is grappling with a deepening downturn in the world’s No. 2 economy, the product of a property slump and ad-hoc coronavirus lockdowns from Shanghai to Shenzhen. — BLOOMBERG NEWS

FINANCE

Norway’s wealth fund to stick with US tech giants

Norway’s $1.3 trillion wealth fund is still positive about the US technology giants, even after the sector led the investor to a record loss. “The US tech companies would typically be amongst our top 10 holdings and we continue to think they’re well positioned,” Norges Bank Investment Management CEO Nicolai Tangen said in an interview on Bloomberg TV. The size of the holdings reflects their size in the benchmark for the fund, which is limited in how far it can stray from that index of global stocks, he said. The fund lost $174 billion in the first half of the year, with Meta Platforms Inc, Amazon, Apple, and Microsoft the biggest single contributers to the decline, it said. Those four are also the biggest single equity holdings of the fund. — BLOOMBERG NEWS

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BIOTECH

Only maker of monkeypox vaccine says it might not be able to meet demand

Bavarian Nordic, the only company with an approved vaccine for monkeypox, said it’s no longer certain it can meet demand as cases continue to rise across the world. The Danish company is now exploring the possibility of outsourcing some of the production, including technology transfer to a US contract manufacturer, to meet accelerating demand. The flare-up of the virus, which has spread to thousands of people in more than 70 countries in just a few months, was declared a public health emergency of international concern by the head of the World Health Organization last month. — BLOOMBERG NEWS

SHIPPING

The Rhine rises, easing worries about commodities

The water level at a key German waypoint on the Rhine River is forecast to rise above a critical level this weekend, potentially bringing a sliver of relief for shippers of vital commodities through inland Europe. The marker at Kaub, a chokepoint on the river to the west of Frankfurt, will hit 41 centimeters (16.1 inches) on Saturday morning local time, rising to 49 centimeters early on Sunday, according to German government data. When the water level is 40 centimeters or below, it is uneconomical for many commodity-hauling barges to sail through. — BLOOMBERG NEWS

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