Target’s new CEO injects $2B in efforts to reverse slow sales

Target is launching a major $2 billion offensive to address a persistent sales slump reported in its recent fourth-quarter earnings and to focus on excelling in fashion and home categories.

Sales dropped 1.5% to $30.45 billion for the quarter ending January 31, and full-year sales fell nearly 2%.

While Target saw declining store and online traffic in Q4, its same-day delivery services surged by more than 30%. Additionally, while revenue missed Wall Street estimates, overall earnings actually beat expectations.

The company expects net sales to grow by approximately 2% in 2026, reaching $106.88 billion.

The newly injected cash, announced by new CEO Michael Fiddelke, will be split between capital projects and operational costs. The retailer plans to open 30 new stores and remodel 130 existing locations, many of which haven't been updated in a decade.

A significant portion of the funds will also go toward store labor, training, and AI to speed up trend-spotting and inventory management.

The retailer is also overhauling its inventory to win back consumers. 75% of the decorative assortments in the home category will be new this year, while new food offerings are expected to increase by ~50%.

Target also cut 1,800 corporate jobs in 2025, and partnered with OpenAI so shoppers can browse its products through ChatGPT.

Analysts note that past controversies with Target’s Pride collection and rollback of its DEI efforts have also alienated shoppers.