Target CEO Brian Cornell said on Wednesday that the company has been grappling with a “highly challenging environment” following a quarter of softer-than-expected revenue and ongoing profit pressures that forced it to cut its full-year sales outlook.
The Minneapolis-based retail behemoth has been trying to drum up traffic and return to growth, but the past three months in particular have been marked by broader industry headwinds, namely President Donald Trump’s tariff war, which threatened to raise prices for consumers across multiple sectors.
The company had already warned earlier this year that there would be year-over-year profit pressure in its first quarter relative to the remainder of the year due in part to tariff uncertainty.
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To try and get back to long-term profitable growth, the company developed a new multi-year growth initiative, called Enterprise Acceleration Office, and made changes to its executive suite.
“In the first quarter, our team navigated a highly challenging environment and focused on delivering the outstanding assortment, experience and value guests expect from Target,” CEO Brian Cornell said in a statement Wednesday.
The changes, announced Tuesday, are “intended to build more speed and agility into how we operate, and position key capabilities to drive long-term profitable growth,” according to Cornell.
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The Enterprise Acceleration Office initiative, led by Target Chief Operating Officer Michael Fiddelke, will specifically help the company operate more nimbly, “creating conditions for speed, adaptability, innovation and resilience,” Cornell said.
During the first fiscal quarter, Target reported its first-quarter net sales were $23.8 billion, down 2.8% from the same period a year ago and below Wall Street’s projection of $24.32 billion. Adjusted earnings per share was $1.30, which was also below Wall Street’s expectation of $1.63.
Sales at stores open for at least a year decreased 3.8% in the first quarter, though Target said it still had healthy digital growth, led by a 36% increase in same-day delivery through its loyalty program, Target Circle 360.
Target is now expecting a low-single digit decline in sales for fiscal 2025. It expects adjusted earnings per share to be approximately $7 to $9 for fiscal 2025, down from its prior expectation of $8.80 to $9.80.
“While these highlights reinforce our confidence in the underlying health of our business, we’re not satisfied with current performance and know we have opportunities to deliver faster progress on our roadmap for growth,” Cornell said.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TGT | TARGET CORP. | 98.18 | +0.21 | +0.21% |
Earlier this year, Cornell was among the chief executives that warned about the consequence of slapping tariffs on major trading partners and even met with Trump to discuss ongoing trade negotiations with other nations and the impact of tariffs imposed on imported products.
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