How Does Target Survive in the Age of Amazon? — Market Mad House

Few retailers are in a worse position in the age of Amazon (NASDAQ: AMZN) than Target (NYSE: TGT). The iconic discounter faces a direct competitor with incredible marketing savvy, an unmatched mastery of technology, and vast amounts of money.

For example, Target reported quarterly revenues of $18.422 billion and a quarterly gross profit of $5.236 billion on 3 August 2019. Those numbers sound impressive until you compare them to the $63.404 billion in revenues and $27.067 billion in gross profit Amazon recorded for the quarter ending on 30 June 2019.

Moreover, Amazon’s revenue grew at a rate of 19.89% last quarter. In comparison, Target’s revenues grew at a rate of 3.63% in its last quarter. Essentially, Amazon’s revenues are over three times as large as Target’s, and they are growing nearly five times as fast.

Can Target Compete with Amazon?

In particular, Amazon’s business model gives Jeff Bezos vast amounts of cash he can throw into new retail ventures and product lines.

Amazon reported an operating cash flow of $10.963 billion and a free cash flow of $6.475 billion for the quarter ending on June 30, 2019. On the other hand, Target noted an operating cash flow of $2.812 billion and no reported free cash flow for…