Target reported another quarter of falling sales and profits as it works to reconnect with customers grappling with widespread price hikes.
However, the Minneapolis-based retailer unveiled a robust annual profit forecast on Tuesday that surpassed Wall Street’s projections. It also expressed confidence that net sales will grow in every quarter this year.
Target additionally noted that comparable-store sales rose at the start of the current quarter.
Shares gained roughly 1.5% in premarket trading.
For the three-month period ending Jan. 31, the company earned $2.30 per share, totaling $1.05 billion. This compares to $2.41 per share, or $1.10 billion, in the year-ago quarter. Adjusted earnings per share for the most recent period were $2.44.
Sales declined 1.5% to $30.45 billion in the latest quarter. For the full year, sales fell nearly 2% to $104.78 billion.
Analysts surveyed by FactSet had expected $2.16 per share on $30.46 billion in sales.
Comparable sales—encompassing existing stores and online channels—dropped 2.5%, following a 2.7% dip in the fiscal third quarter. This marks 11 out of the past 13 quarters where Target has posted either declines or flat growth for this metric.
Target’s performance underscores the challenges facing its new leader, a 20-year company veteran who succeeded long-tenured CEO Brian Cornell last month.
Fiddelke is expected to detail his plans to turn Target around during the company’s annual meeting in Minneapolis on Tuesday. Investors are eager for a return to Target’s former dominance in affordable chic, which earned it the nickname “Tarzhay” in years past.
Fiddelke takes over as Target’s hometown of Minneapolis has become a front line in President Donald Trump’s campaign to curb illegal immigration. Some of the company’s stores have become flashpoints in pushback against . The retailer has faced pressure to take a public stand against the .
Even before the immigration tensions, Target had faced protests and over its decision to . Critics view this as a betrayal of Target’s philanthropic commitment to fighting racial disparities and promoting progressive values in liberal Minneapolis and beyond.
This comes amid a volatile economic and political environment intensified by Trump’s aggressive trade campaign. The White House is now seeking a 15% global tariff, many of the broad import taxes imposed over the past year.
While inflation has cooled, consumer prices have surged about 25% over the past five years. U.S. companies face an uncertain outlook as American households struggle, and the Trump administration is working to bypass a Supreme Court ruling to keep its tariffs in place.
Target customers have also grown frustrated with what they see as untended, messy stores and lackluster merchandise.
As the company’s nearly 2,000 stores have become shipping hubs for online operations, customers say the in-store shopping experience has suffered, with staff focused on fulfilling digital orders instead of tending to aisles.
Target is also facing stiffer competition from , which has stepped up its focus on fashion and other goods. As many Americans trade down due to inflation, has gained market share—particularly among households with annual incomes above $100,000.
Joe Feldman, senior managing director and assistant director of research at Telsey Advisory Group, believes shopper boycotts over Target’s pullback from DEI and its lack of a forceful stand against ICE have cut into sales. But he noted Fiddelke seems willing to make changes to improve operations.
According to a February memo to employees, Fiddelke has already , boosted in-store staffing spending, and made cuts at distribution facilities and regional offices.
The company is also reworking its private label brands, such as its home goods line Threshold. It announced a merchandise collaboration with Roller Rabbit, a brand known for 1960s-inspired silhouettes and colorful, playful prints. The collection of clothing, pajamas and accessories is set to debut at Target this month for a limited time.
Tuesday’s report offered some hopeful signs: Target said sales and customer traffic accelerated in the final two months of the quarter, and it saw growth in food and beverage, beauty and toys.
Target expects net sales to rise 2% this year, reaching $106.88 billion—slightly above analysts’ expectations of $106.7 billion. It also anticipates earnings per share between $7.50 and $8.50, while FactSet-polled analysts expect $7.30 per share for the year.