Target CEO Brian Cornell to Step Down in February; Replacement Named

Target CEO Brian Cornell, who helped reenergize the company but has struggled to turn around weak sales in a more competitive retail landscape since the COVID pandemic, plans to step down Feb. 1. Minneapolis-based Target Corp. said Wednesday that Chief Operating Officer Michael Fiddelke, a 20-year company veteran, will succeed Cornell, who will transition to be executive chair of the board. Cornell, 66, was named CEO of Target in August 2014. Cornell said Fiddelke's appointment followed several years of board vetting of both internal and external candidates. Fiddelke has overhauled Target's supply network and expanded the company's stores and digital services while cutting costs.

Total Retail's Take: This announcement, while not unexpected, comes at a critical time for Target. The retailer reported a 21 percent drop in net income in the quarter ended Aug. 2. Sales were down slightly and the company reported a 1.9 percent dip in comparable sales. Target has seen flat or declining comparable sales in eight out of the past 10 quarters, including the latest period.

In a statement emailed to Total Retail, David Silverman, senior director, Fitch Ratings, offers the following on Target's latest earnings report and the upcoming CEO transition: "Target’s challenged 2Q and CEO transition supports Fitch’s recent decision to revise Target’s outlook to negative. Fitch revised Target’s outlook to negative given concerns about the company’s recent execution missteps, exacerbated by a volatile retail industry, which have pressured market share and profitability. The company has seen top-line dislocation from brand perception issues, including execution challenges like merchandising, inventory in-stocks and customer service. While Fitch expects declines across discretionary retail categories in 2025 due to consumer health moderation and the impact of tariffs, Target’s value positioning and consumables focus should be yielding better results than the low single-digit revenue decline we expect for Target this year.

"Longer term, Fitch believes Target has the scale, infrastructure, merchandise mix and consumer connections to succeed in a competitive retail industry. The company remains a general merchandise leader with $100 billion in retail sales and good cash flow. However, the company will need to address its near-term branding and supply chain challenges to support top-line stabilization. Fitch expects incoming CEO Michael Fiddelke, who has over 20 years of experience at Target, largely in finance and operating roles, will be focused on both operating efficiency and customer-facing improvements as part of his new role."