What happened
The rough week for Target (TGT -0.51%) shares continued Friday. The retailer's stock has dropped more than 8% this week, including today's drop of 1.7% as of 2:15 p.m. ET.
So what
Yesterday, Target released two news items of note. Some investors took it as a troubling sign that the company said it would start offering holiday-season deals early this year. Target has already been in the news for accelerating promotions to help resolve a mishandled inventory situation from earlier this year. Supply chain disruptions and shifting consumer sentiment caused it to over-order products that weren't popular once they arrived. Yesterday's news of early holiday deals could continue the hit on profit margins Target has accepted to optimize its inventory. But those investors that got nervous from the holiday deal news may have overreacted.
Now what
Target said it is starting its Target Deal Days Oct. 6 this year. But that's only one week earlier than last year's program. So it could be looked at as good news that the company is preparing for a strong holiday season a bit early.
The company also declared its quarterly dividend yesterday. While it didn't increase the rate from the last announcement, that wasn't expected. It last declared its dividend in June with a 20% increase at that time. Long-term investors in Target shares should still be very happy with the current dividend. At its recent stock price, the dividend yield was about 2.5%. That's a nice level of passive income to collect as the company fixes its short-term inventory issue and resumes its more profitable results.