Target shares tumble 9% as retailer picks new CEO, says sales fell again

Key Points:

Earnings per share: $2.05 vs. $2.03 expected Revenue: $25.21 billion vs. $24.93 billion expected Target’s annual sales have been roughly stagnant for the past four years, and its inconsistent performance has tested the loyalty of shoppers and shaken the confidence of Wall Street. Store traffic at the big-box retailer has fallen almost every week since late January, according to Placer.ai, an analytics firm that uses anonymized data from mobile devices to estimate overall visits to locations. And shares of the company have tumbled about 60% from their all-time high in late 2021. 1.Target posted fiscal second-quarter earnings and revenue that topped Wall Street’s expectations. 

2.The company stuck by its full-year outlook, which forecasts a single percentage point decline in sales.

3. Target named Michael Fiddelke as its new CEO, effective Feb. 1.

Target beat Wall Street’s earnings and sales expectations and reaffirmed its outlook on Wednesday, even as the company’s sales and traffic across its stores and website declined.

Yet the Minneapolis-based retailer pointed toward the future – and its focus on getting back to growth – by naming its next CEO. Chief Operating Officer Michael Fiddelke, who has also served as Target’s CFO, will step into the role on Feb. 1. He will succeed CEO Brian Cornell, 66, who will become executive chair of Target’s board of directors. Fiddelke is a 20-year Target veteran. 

The company’s shares were down about 9% in early trading following the results and CEO announcement.

On a call with reporters, Fiddelke, 49, described his two decades with the company as “an asset.” He said he knows what the big-box retailer can be at its best – and what it must recapture – and isn’t waiting until February to make changes.

He laid out three priorities: Reestablishing Target’s reputation as a retailer with stylish and unique items, providing a more consistent customer experience, and using technology more effectively to operate an efficient business.

Beyond the CEO announcement, Target topped Wall Street’s expectations for sales and earnings during the fiscal second quarter. It reiterated its full-year forecast, which it had cut back in May. Target said it expects a low single-digit percentage decline in sales and adjusted earnings per share, excluding gains from litigation settlements, to be about $7 to $9.

Here’s what Target reported for the three-month period that ended Aug. 2 compared with Wall Street’s expectations, according to a survey of analysts by LSEG:

• Earnings per share: $2.05 vs. $2.03 expected
• Revenue: $25.21 billion vs. $24.93 billion expected

Target’s annual sales have been roughly stagnant for the past four years, and its inconsistent performance has tested the loyalty of shoppers and shaken the confidence of Wall Street. Store traffic at the big-box retailer has fallen almost every week since late January, according to Placer.ai, an analytics firm that uses anonymized data from mobile devices to estimate overall visits to locations. And shares of the company have tumbled about 60% from their all-time high in late 2021.