Target reported a larger-than-expected 2.7% drop in comparable sales for Q3 and outlined a wide profit range for the holiday quarter as it cuts prices to attract cash-strapped U.S. consumers. Shares fell ~2%, extending a year-to-date decline of 35%.
The results mark the first full quarter since incoming CEO Michael Fiddelke was appointed in August. Target plans to invest another $1 billion in 2026 to open new stores, remodel locations, and enhance digital capabilities.
Fiddelke is implementing major operational changes across 35 markets, where only select stores will handle online order picking and packing. Target is also rolling out AI-powered tools, including a generative-AI gift finder and machine-learning inventory forecasting for its top 5,000 items. These moves follow the elimination of 1,800 corporate roles last month.
Analysts say it’s too early to see measurable impact, though they note “decisive actions” from the incoming CEO.
Macro pressures — including the recent U.S. government shutdown, lingering inflation, and a soft housing market — weighed on performance. Revenue fell 1.6% to $25.27B, slightly below expectations.
Despite the weakness, Target reaffirmed guidance for low-single-digit Q4 sales declines and set full-year EPS at $7.00–$8.00, excluding severance and one-offs.
To win back budget-conscious shoppers, Target slashed prices on 3,000 everyday items and introduced a low-cost Thanksgiving meal kit.