Target reports sales miss as shoppers cut spending

Target’s third-quarter profit dropped 19% as inflation pressures shoppers to buy more essentials and fewer discretionary items.

The retailer expects the slump to persist through the holiday season. Comparable sales fell 2.7%, worse than the 1.9% dip last quarter, marking a third straight decline.

Sales totaled $25.27 billion, slightly below analyst projections. Profit slipped to $689 million, or $1.51 per share, though adjusted earnings of $1.78 topped Wall Street’s $1.71 estimate. 

Target’s stock has plunged 45% in the past year.

Target plans to revive demand by adding 20,000 new products and price cuts on thousands of groceries and household essentials. It recently lowered prices on 3,000 everyday items.

The company cut 1,800 corporate jobs and partnered with OpenAI so shoppers can browse Target products through ChatGPT.

The retailer will refresh store layouts, add more exciting products, and upgrade technology to fix complaints about messy aisles and missing items.

It will also invest an extra $1 billion in 2026 to remodel stores and build new locations, raising its makeover cost to $5 billion.

Shoppers continue to cut back on discretionary purchases, such as home decor and apparel, though spending on essentials remains steady.

Home Depot cut its full-year profit forecast this week following slow Q3 sales.