Sign at the entrance to a Target store in Venice, Florida.
Erik Mcgregor | Lightrocket | Getty Images
Target plans to report its holiday-quarter earnings and share its expectations for the year ahead on Tuesday morning, as its new CEO lays out his strategy and tries to persuade Wall Street that the big-box retailer can end its sales slump.
The Minneapolis-based discounter will hold an investor meeting at its headquarters, led by CEO Michael Fiddelke, the company veteran who stepped into the job in February, as well as other Target executives.
Here’s what Wall Street is expecting for the big-box retailer’s fiscal fourth quarter, based on a survey of analysts by LSEG:
- Earnings per share: $2.15 expected
- Revenue: $30.48 billion expected
Those results would come in shy of what Target reported in the year-ago period. The company recently affirmed its outlook for the fourth quarter, saying it expects sales to decline by a low single-digit percentage, and it anticipates its full fiscal 2025 forecast for adjusted earnings per share will range between $7 and $8. In the previous fiscal year, Target reported adjusted earnings per share of $8.86.
Target is trying to turn around several years of disappointing results driven by a mix of company missteps and economic factors. Its annual sales have been roughly flat for four years, after a significant jump in annual revenue during the Covid pandemic.
Customer traffic across the company’s stores and website has fallen for three consecutive quarters and the average amount people are spending during those visits has declined, too. Target cut 1,800 corporate jobs in October, marking its first major layoff in a decade.
Some of Target’s customers told CNBC they are shopping elsewhere after noticing changes like sloppier stores and lackluster merchandise, or objecting to the company’s social stances, like its rollback of major diversity, equity, inclusion initiatives. The company acknowledged backlash to its DEI decision had hurt sales and led to market share losses to competitors.
Target is known for selling clothing, home goods, seasonal items and other trend-driven discretionary merchandise that customers often buy on impulse when browsing the aisles on a “Target run.” Yet higher prices of food, utilities and other necessities, fueled by inflation and tariffs, has dampened U.S. consumers’ willingness to buy items that aren’t on the shopping list.
Target’s results have been at odds with those of retail rivals like Walmart, Costco and T.J. Maxx, which have posted stronger sales results, attracted shoppers across incomes, and seen growth in categories like apparel and home goods, areas where Target has struggled.
In an interview with CNBC in the fall at Target’s headquarters, Fiddelke said he would prioritize regaining the company’s reputation for style and design, improving the customer experience, and using technology to boost its performance.
He has echoed those key goals in messages to the company’s employees and comments to investors.
Last month, Target announced it would invest more in store labor and cut about 500 other roles at distribution centers and regional offices. However, the company declined to say much more it would spend.
Target shares have dropped by nearly 32% over the past three years, as of Monday’s close, though they have risen nearly 16% so far this year. The company’s stock closed on Monday at $113.17, bringing its market cap to $51.24 billion.
