Target Reports Slump in Q4 Earnings, But Expects Gains in 2026
Target on Tuesday posted another quarter of falling revenue and decreased customer traffic at its stores, though its shares rose as the retailer’s earnings beat estimates and it said it's poised to end its sales slump, reports CNBC. The big-box retailer, which is in the middle of a turnaround effort, said sales and traffic trends picked up in the last two months of the holiday quarter. Then sales turned positive year-over-year in February, which is the beginning of the current quarter.
For the current fiscal year, Target expects net sales to rise about 2 percent compared with the prior year and anticipates that metric will grow in every quarter of the year. That net sales growth for the year would reflect a small increase in comparable sales, the retailer said. The company added that its new stores and non-merchandise sales, such as advertising and membership, would contribute more than 1 percentage point of growth.
Total Retail's Take: For four quarters in a row, customer traffic across Target's stores and website has fallen. With only one month under his belt as CEO and only two months of recent positive growth, Michael Fiddelke is trying to convince the industry and investors that Target is gaining sales momentum. Speaking to CNBC on Tuesday, Fiddelke said the company is “out of the gates strong this year.” While he noted that one month of growth “doesn't make a trend,” he said the February sales increase gives him “confidence” the company is returning to growth.
Fiddelke's influence on Target's turnaround efforts began after his appointment was announced in August. Since then, Target has announced new investment efforts, layoffs, a C-suite shuffle, and a new holiday merchandising strategy. It seems the new CEO's efforts may be making a positive impact to start the year.
Target's annual sales have been roughly flat for four years, after a significant jump in annual revenue during the Covid pandemic. Its recent years of disappointing results were driven by a mix of company missteps and economic factors.
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Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.
