The big box retailer cut its full-year outlook from a projected gain to a ‘low-single-digit decline’|Mike Mozart|CC BY 2.0
Target is struggling more than its competitors to cope with the economic uncertainty of President Donald Trump’s tariff hikes. It reported a 3.8% comparable sales decline for the quarter ending May 3.
The big box retailer also cut its full-year outlook from a projected gain to a “low-single-digit decline.”
If the forecast is precise, it would be Traget’s third consecutive year of sales decline.
Foot traffic declined 2.4% last quarter, and overall spending per visit also fell. The company’s stock dropped 6% on the report.
Why is Target struggling?
Tariff-driven price hikes and consumer protests over the retailer’s retreat from its diversity, equity and inclusion (DEI) policies are straining its brand and performance.
Additionally, US consumers are pulling back on discretionary spending like electronics and toys (which Target majorly retails) and focusing on household items and essentials like groceries (that rivals Walmart and Home Depot sells).
Walmart, Lowe’s and Home Depot have recently reaffirmed their full-year financial forecasts, even as they battle tariffs and price increases. Their optimistic outlook contrasts Target’s forecast.
CEO Brian Cornell blamed a “highly challenging environment” for the lower financial performance.