The biggest mover in our portfolio last quarter was Target (NYSE:TGT) which was down nearly 30 percent in the period. The company, like many brick-and-mortar retailers, is being hurt by on-line sales. Management has responded and has taken several steps to become more competitive online, as well as to boost in store traffic, which has been declining. While Target’s on-line sales have grown, they are less profitable than in-store sales, causing us to re-evaluate our outlook for the company’s profitability and growth potential as we continue to hold Target in the Fund. While we have seen many of Target’s competitors struggle even more, some even disappearing, we believe Target is a long term survivor that should benefit from the industry shake up currently underway.
From Mairs and Power (Trades, Portfolio)'s first-quarter 2017 Growth Fund commentary.
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