Target has another quarter of declining sales but there are signs of
improvement to start 2026
[March 03, 2026] By
ANNE D'INNOCENZIO
MINNEAPOLIS (AP) — Target reported another quarter of declining sales
and profits as the retailer struggles to regain its footing with its
customers contending with higher prices almost everywhere.
But the Minneapolis company on Tuesday offered a solid annual profit
outlook that was better than Wall Street had been projecting, It also
said it believes net sales will grow every quarter this year.
Target also said comparable-store sales rose to start the current
quarter.
Shares jumped more than 4% before the opening bell.
The company earned $2.30 per share, or $1.05 billion, for the
three-month period ended Jan. 31. That compares with $2.41 per share, or
$1.10 billion, during the year-ago period. Adjusted earnings per share
for the most recent quarter was $2.44.
Sales fell 1.5% to $30.45 billion during the latest period. For the full
year, sales fell nearly 2% to $104.78 billion.
Analysts were expecting $2.16 per share on sales of $30.46 billion,
according to a survey by FactSet.
Comparable sales — sales at established stores and online channels —
fell 2.5%, followed by a 2.7% dip in the fiscal third quarter. The
latest figure marks 11 quarters out of the past 13 that Target has
posted either declines or flattish growth for this measure.
Target’s performance underscores the challenges faced by new CEO Michael
Fiddelke, a 20-year company veteran, who succeeded longtime CEO Brian
Cornell last month.
Fiddelke is expected to reveal details about his plans to turn around
Target on Tuesday during the company’s annual meeting in Minneapolis.
Investors are hungry for a return to Target’s former dominance in
affordable chic for which it earned it the nickname “Tarzhay” in years
past.
Fiddelke takes over with Target’s hometown of Minneapolis a front line
of sorts in President Donald Trump’s campaign to curb illegal
immigration. Some of the company’s stores have become a flashpoint in a
pushback against U.S. Immigration and Customs Enforcement. The company
has faced pressure to take a public stand against the immigration
crackdown.
Even before the immigration clashes, Target had been facing protests and
boycotts over the company’s decision to roll back its diversity, equity
and inclusion initiatives. Critics believe it's a betrayal of Target’s
retail giant’s philanthropic commitment to fighting racial disparities
and promoting progressive values in liberal Minneapolis and beyond.
That is outside of a volatile economic and political environment that
has been intensified by an aggressive trade campaign under Trump. The
White House is now seeking a global tariff of 15%, after the U.S.
Supreme Court struck down many of the far-reaching taxes on imports that
he had imposed over the last year.
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Products sit on display at a Target store, Monday, March 2, 2026, in
Edina, Minn. (AP Photo/Anne D'Innocenzio)
 While the pace of inflation has
cooled, consumer prices have soared about 25% over the past five
years. U.S. companies are facing a hazy outlook with American
households hurting, and the Trump administration is trying to work
around the Supreme Court ruling to keep his duties in place.
And Target customers have soured on what they see as untended and
messy stores with lackluster merchandise.
As the company’s nearly 2,000 store locations have become shipping
hubs for online operations, customers say the shopping experience
within stores has suffered with staff fulfilling digital orders
rather than tending to store aisles.
Target is also facing stiffer competition from Walmart, which has
stepped up its focus on fashion and other goods. As many Americans
trade down because of inflation, Walmart has gained market share,
particularly among households with annual income above $100,000.
Joe Feldman, a senior managing director and the assistant director
of research at Telsey Advisory Group, believes that shopper boycotts
over its pullback from DEI and its lack of a forceful stand against
ICE cut into sales. But he said overall, Fiddelke seems to be
willing to make changes to improve its operations.
Fiddelke has already reshuffled the leadership team at Target,
boosted spending on in-store store staffing and made cuts at
distribution facilities and regional offices, according to a memo
sent to employees in February.
The company is also reworking its store label brands such as its
home goods brand called Threshold and announced a merchandise
collaboration with Roller Rabbit, a brand known for its
1960s-inspired silhouettes and colorful playful prints. The
collection of clothing, pajamas and accessories is expected to make
its debut at Target this month for a limited time.
Tuesday’s report offered some hopeful signs for the business. Target
said that sales and customer traffic accelerated in the final two
months of the quarter. And it saw sales growth in food and beverage,
beauty and toys for the latest quarter.
Target said that it expects net sales for the year to increase by
2%, which would mean it expects sales to reach $106.88 billion.
That’s a bit above analysts’ expectations of $106.7 billion. Target
also anticipates earnings per share to be in the range of $7.50 to
$8.50. Analysts are expecting $7.30 per share for the year,
according to analysts polled by FactSet.
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