Target struggles as sales, profits slide further

US retailer Target beat Wall Street’s forecasts for sales and earnings, but its struggles remain clear.

Net income fell to $935 million from $1.19 billion last year, while revenue slipped to $25.21 billion. Comparable sales dropped 1.9%, with customer transactions down 1.3% and average spending per trip falling 0.6%.

Shares tumbled more than 6% after the announcement, extending a slide that has left the stock 60% below its 2021 peak.

Shoppers are turning away
Once known for eye-catching products and polished stores, Target is seen by many customers as having lost its identity. 

Higher tariffs, which affect about half of what Target sells, have squeezed profits. Controversies over its Pride collection and the rollback of its diversity, equity and inclusion (DEI) efforts also alienated shoppers. 

Meanwhile, the end of its Ulta Beauty partnership, once a traffic driver, raised fresh questions about its retail strategy.

Leadership shift ahead
Incoming CEO Michael Fiddelke vowed to restore Target’s design leadership, improve customer experience, and use technology to boost efficiency. 

But with store traffic declining nearly every week since January, Target faces a difficult turnaround.