In a bird's eye view, the target store was seen in Austin, Texas on August 11, 2025.
Brandon Bell | Getty Images
Target Beat Wall Street's revenue and sales expectations and reiterated its outlook on Wednesday, even as sales and traffic on the store and website fell.
However, the Minneapolis-based retailer points to the future and regains growth by naming the next CEO. Michael Fiddelke, who also serves as Chief Operating Officer of Target CFO, will hold the position on February 1. He will take over as CEO Brian Cornell, who will become executive chairman of Target's board of directors. Fiddelke is a 20-year target veteran.
Stocks fell about 8% in listing trading after the results and CEO announcement.
In a phone call with reporters, Fiddelke, 49, described his twenty years at the company as an “asset.” He said he knew that big retailers were best at their best — and what they had to recapture — and that changes would not be made until February.
He put forward three priorities: rebuilding the reputation of the targeted retailer, having stylish and unique items, providing a more consistent customer experience, and using technology more effectively to run an efficient business.
In addition to the CEO announcement, Minneapolis-based Discounter ranked among the expectations of Wall Street for sales and revenue in the second quarter. It reiterated its full-year forecast and cuts in May. Target said it expects a lower percentage of sales and adjusted earnings per share declines, excluding earnings from litigation settlements, about $7 to $9.
According to LSEG's survey of analysts, Target reported what was reported at the end of the three-month period ending August 2, compared to Wall Street expectations:
- Earnings per share: $2.05 VS. Expected $2.03
- income: $25.21 billion, estimated $24.93 billion
Target's annual sales have roughly stagnated over the past four years, with its inconsistent performance testing shopper loyalty and shaking Wall Street's confidence. Store traffic at large retailers drops almost every week, analytics firm Placer.ai said. The company's stock has fallen about 60% at its all-time high at the end of 2021.
Clients and former employees told CNBC Target lost some unique features that distinguish it from its competitors, such as its compelling merchandise, well-kept stores and attentive customer service. Higher tariffs complicate Target's challenge as it imports half of its sales.
Last week, Ulta Beauty and Target announced they would end a deal that opened mini beauty stores in nearly one-third of Target stores. The partnership will also add Ulta’s beauty brand to Target’s website at the end of August 2026. Target talked about the increase in Ulta Shops additions as traffic drives and improved its beauty category.
Fiddelke told reporters that the company is “always evaluating our partnership.” He said Target has released annual sales growth in its beauty category, excluding Ulta beauty products, and has been selling items every year since 2010 and is confident that it can continue.
Target's latest quarter reflects its ongoing struggle. Its net income fell to $935 million, or $2.05 per share, from $1.19 billion or $2.57 per share in the same period last year. Revenue fell from $25.45 billion during the previous year.
Comparable sales fell 1.9% year-on-year. This metric (also known as same-store sales) includes sales on its website, and stores are open for at least 13 months.
Client transactions fell by 1.3%, with the average amount spent by customers in these transactions down 0.6% from the same period last year.
Its profit margins are subject to higher price cut rates, cancellation costs for purchase orders, and pressure from customers to buy more items in low-profit categories such as hardwire. The categories of hard phones (including electronics and toys) tend to have lower profits than other parts of the store, such as clothing.
Digital sales were a highlight, up 4.3% year-on-year.
Target also posted revenue from some of its business. Its non-contract sales increased by 14.2% compared to the same period last year as it earned more revenue from advertising commercial circles, membership programs and third-party markets.
Target Fiddelke told reporters on the phone that retail trends improved from the first quarter to the second quarter. He said sales trends in all six key commodity categories in Target have improved compared to the previous quarter.
As head of the Corporate Acceleration Office, May created a unit goal to lead its turnaround, Fiddelke said he had the opportunity to take a closer look at the business and what was underperforming. He said, for example, the retailer lost its foundation for household goods, a well-known category and exploded during the Coovid pandemic. Target focused on “core” projects and “lost some of the fashion and design leadership we have so important in similar categories.”
But, he said, this has made some progress, such as adding Disney and Marvel-themed bedding and decor to Target’s children’s home products brand Pillowfort.
“Now, we need more examples in the whole category, but they give me a lot of confidence that we are on the right path,” he said.