Target Corporation has fallen short of Wall Street forecasts and revised its financial outlook for the year, facing challenges such as tariff unpredictability, waning consumer confidence, and backlash over its revised diversity, equity, and inclusion (DEI) measures.
Based in Minneapolis, the retail giant has been working to boost customer traffic and foster growth for two consecutive quarters. However, CEO Brian Cornell described the past three months as particularly “highly challenging.”
The company’s recent report revealed revenue figures that did not meet expectations and continued pressure on profit margins amid broader industry challenges, including the ongoing tariff war initiated by the Trump administration, which has raised the prospect of increased prices for consumers across various sectors.
Earlier this year, Target had already cautioned investors that it would experience profit pressures in the first quarter compared to the rest of the fiscal year, attributed in part to uncertainties surrounding tariffs.
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“In the first quarter, our team had to navigate a highly challenging environment while ensuring we delivered the exceptional assortment, experience, and value that our guests expect from Target,” stated CEO Brian Cornell on Wednesday.
To seek a return to sustainable growth, Target has initiated a new multi-year strategy known as the Enterprise Acceleration Office and has restructured its executive team.
The recently announced changes aim to enhance operational efficiency and position Target for long-term profitability, according to Cornell.
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Leading the Enterprise Acceleration Office initiative, Target’s Chief Operating Officer Michael Fiddelke is set to implement strategies that foster speed, adaptability, innovation, and resilience within the company, as emphasized by Cornell.
In its first fiscal quarter, Target recorded net sales of $23.8 billion, a decline of 2.8% compared to the same period last year, falling short of Wall Street’s expected $24.32 billion. The adjusted earnings per share were reported at $1.30, also below the anticipated $1.63 from analysts.
Comparable store sales fell by 3.8% during the first quarter, and the average customer spend decreased by 1.4%. However, Target reported significant digital growth, primarily driven by a 36% surge in same-day delivery through its loyalty program, Target Circle 360.
Looking ahead, Target now anticipates a low-single-digit decline in sales for fiscal 2025, a revision from its earlier outlook of a 1% growth. The company is also projecting adjusted earnings per share to range between $7 and $9 for fiscal 2025, down from a prior range of $8.80 to $9.80.
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“We’re not satisfied with our current performance and are aware that there are numerous opportunities for us to expedite our progress toward growth,” stated Cornell.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TGT | TARGET CORP. | 98.18 | +0.21 | +0.21% |
Earlier this year, Cornell joined other CEOs in expressing concerns regarding the repercussions of implementing tariffs on major trading partners and even met with Trump to discuss the ongoing trade negotiations and the implications of tariffs on imported goods.
Additionally, the retailer has faced backlash from consumers following its announcement in late January that it was scaling back its DEI efforts. This decision followed Trump’s executive order prompting a review of such initiatives, leading to the discontinuation of external diversity surveys and the rebranding of its “Supplier Diversity” team to “Supplier Engagement.” The company also indicated it would wrap up its three-year DEI goals and conclude its Racial Equity Action and Change (REACH) initiatives by 2025 as planned.
