$47.61 for paper towels and TP at Target today.
Absolutely insane example of corporate greed and price gouging.
In fact, it made me so angry, I decided to do some analysis.
Many prices have increased by 50% or more since COVID, so I decided to put on my investment banking hat and spread some financials back to 2018 / 2019.
And man, was I ever surprised...
I started by looking at Target's annual revenue:
2018: $75.4 billion
2019: $78.1 billion
2020: $93.6 billion
2021: $106.0 billion
2022: $109.1 billion
2023: $107.4 billion
Last Twelve Months (LTM): $106.6 billion
Couple things I noticed. First, revenue has slipped a bit since 2022 and is continuing to do so in 2024 - not a great sign for the broader economy. Second, there's been big growth since 2018. They must be price gouging!
Well, I looked a bit deeper. Let's look at their cost of goods sold over the same period (the price they paid to buy the products they sold you).
2018: $53.3 billion (70.7% of sales)
2019: $54.9 billion (70.2%)
2020: $66.2 billion (70.7%)
2021: $75.0 billion (70.7%)
2022: $82.2 billion (75.4%)
2023: $77.7 billion (72.4%)
Last Twelve Months (LTM): $76.8 billion (72%)
Wow, so let me get this straight...
Target is making less money (28 cents) on every dollar of sales today than they were in 2018 (29.3 cents). Hmmmm. That's weird. Maybe they're not so good at this price gouging thing.
So, I decided to dig even deeper. They were prolly being evil and firing all of their employees so they could make up for the money they weren't gouging, right?
So, I looked at their operating expenses (the amount they pay to run the stores and the overall business):
2018: $15.7 billion (20.9% of sales)
2019: $16.2 billion (20.8%)
2020: $18.6 billion (19.9%)
2021: $19.8 billion (18.6%)
2022: $20.7 billion (18.9%)
2023: $21.6 billion (20.1%)
Last Twelve Months (LTM): $21.7 billion (20.3%)
Hmmmm. Very unusual behavior for someone price gouging me. Let's sum this all up by looking at their operating cash flow:
2018: $6.3 billion (8.4% of sales)
2019: $7.0 billion (9.0%)
2020: $8.8 billion (9.4%)
2021: $11.3 billion (10.7%)
2022: $6.2 billion (5.7%)
2023: $8.1 billion (7.6%)
Last Twelve Months (LTM): $8.1 billion (7.6%)
So, what this all means is that Target's making less overall profit on every dollar of revenue today (7.6 cents) than they were in 2018 (8.4 cents). And revenue has grown at an average (CAGR) of 7.3% per year since 2018 and operating cash flow has grown at 5.1% per year - both of which are pretty much in line w/ the overall rate of inflation during that period.
I guess I expected price gouging to be more profitable.
❌ NO PRICE GOUGING AT TARGET ❌
"Well Steve," you may say, "that's all fine and good, but even if Target isn't price gouging, Kimberly Clark and International Paper (both of whom are involved in the manufacture / marketing of paper towels and TP) sure as H3ll must be!"
Well Yes! Surely they are! I'll spare you all the numbers, but here's the summary:
Kimberly Clark:
5-year avg revenue growth: 2.0%
2018 Gross Margin: 69.7%
LTM Gross Margin: 64.0%
2018 EBITDA Margin: 12.1%
LTM EBITDA Margin: 15.6%
"A-HA! Look at that EBITDA margin!" you say, "They must be gouging!"
Well, the gross margin clearly says otherwise, and the five-year EBITDA CAGR is 6.6% - pretty much in line with inflation. Again, management is clearly bad at gouging.
❌ NO PRICE GOUGING AT KIMBERLY-CLARK ❌
"Well ok," you say, "I'm sure International Paper must be capturing all of that extra profit because they're the ones gouging then."
Let's take a look:
International Paper:
5-year avg revenue growth: 0.8%
2019 Gross Margin: 30.8%
LTM Gross Margin: 27.8%
2018 EBITDA Margin: 16.1%
LTM EBITDA Margin: 11.6%
Wowza, I guess IP is the worst price gouger of all since, well, they've basically been destroying value since before COVID began. You would think price gougers would be gouging to, I don't know, make more money and all. Well, IP made almost $3 billion of EBITDA in 2019, and a little over $2 billion over the last twelve months. Sigh.
❌ NO PRICE GOUGING AT INT'L PAPER ❌
So, maybe this means the inflation we've been dealing with hasn't been about corporate greed and price gouging after all. Maybe it has had something to do with, oh, I don't know, government spending and stimulus run amok or something.
So, rather than going on populist rants about implementing price controls for the greedy corporations (which, you know, have never worked out so well in the past), maybe we should consider some price controls for government spending.
That's a novel idea.
🤔
p.s. And for those of you who say "Hey, wait a minute, your receipt says "Bounty" - that's not Kimberly Clark, that's P&G! They must be price gouging!"
Procter & Gamble:
5-year avg revenue growth: 4.4%
2019 Gross Margin: 48.6%
LTM Gross Margin: 51.4%
2019 EBITDA Margin: 20.4%
LTM EBITDA Margin: 23.7%
Gross margin up? Yep. EBITDA margin up? Yep. Good management? Yep. Price gouging? Nope.
❌ NO PRICE GOUGING AT P&G ❌
@ninoboxer Simple thought. The timeline keeps getting kicked down the road. Now by Christmas. Before you say something about wishing things to happen, that’s not my point. Point, keep us guessing, keep us in the sideline as we are manipulated to go a certain direction.
Don’t let them fool you…
This race isn’t even close.
It’s a complete blowout for Trump.
They believe as long as they can push the perception of Kamala winning with nonstop coverage on MSM and fake polls, they believe they can steal it.
They also have this gamed out to where they believe they will win either way..
Main objective is ORDER OUT OF CHAOS…
If Kamala wins through the steal, patriots will cause an uproar and immigrants will be activated to fight back.
If an election “pause” occurs and the election is halted, the results will begin to show Trump winning… WE HOPE.
Immigrants then get activated through the threat of mass deportation.
I believe civil unrest is coming to America regardless before Christmas.
The question is… TO WHAT LEVEL?
Leave your thoughts below.
I suggest everyone get to Ninoscorner.tv where we discuss the news before it’s news. 👊🏼💥💥
If you've been a US Citizen for at least 35 years and can prove you've lived in the US for that length of time, you should be allowed to run for President.
Governor Abbott has quietly stopped bussing migrants across the country, because the number crossing the border has drastically dropped thanks to Biden's executive orders.
theguardian.com/us-news/articl…
@StaceyCKs1 Perhaps you should ask the gentleman himself if he felt he was being mocked by Trump. If you all take the time to do your research you’ll find the answer to that is no. He actually puts Trumps actions into context. Unlike you.
@farmingandJesus Your response is proof. Your immediate response was to say “the Bible is the truth”. I agree but you didn’t even take time to ask me to clarify my comment. Most likely you take offense to what I post right now even though that is not my intent. My intent is to have dialogue.
@farmingandJesus “Christians” can’t seem to lovingly discuss and reason the truth. These type of post stir the pot vs lovingly reason. This may not be the intent but is the result.
@StevenUllmer Well, prove he wasn’t. But it doesn’t matter any. We are commanded to be baptized into Christ hanging on the cross. Like the thief confessed and died with him, we are to be crucified with him in baptism. Rom 6.
Inflation is caused by the Federal government spending more than it earns, because they just print more money to make up the difference.
To solve inflation, reduce wasteful government spending. Your tax dollars should be spent well, not poorly.