On November 19 (Wednesday), Target announced its third-quarter financial results for 2025, showing a decline in sales exceeding expectations. Target plans to reinvest around $1 billion next year to improve its stores, product selection, and digital capabilities.
According to data compiled by the London Stock Exchange Group (LSEG) cited by Reuters, Target’s comparable sales for the third quarter (including online and physical stores open for at least 13 months) dropped by 2.7%, higher than the previously expected 2.08%. The company’s stock price fluctuated significantly in pre-market trading, falling by nearly 2%.
Sales of household essentials decreased by 3.7%, while online same-store sales grew by 2.4%. Visible Alpha’s data indicates that the online sales growth, which had been strong in the past two quarters, failed to meet the expected 3.18% growth.
Target experienced a decrease in demand due to inventory management errors and understaffing at stores.
In a report on Wall Street on the 19th, incoming CEO Michael Fiddelke stated during a press conference call, “Our top priority is to get back on a growth trajectory.” He mentioned that these changes will involve enhancing store experiences, offering more appealing products, and adopting advanced technology and e-commerce systems.
Last month, he cut 1,800 company positions to reduce costs and streamline operations.
Despite the decline in sales, Target forecasted once again on Wednesday that fourth-quarter sales would show a low-single-digit decrease. The Minneapolis-based retailer also significantly lowered prices on 3,000 daily items, including food and household essentials, and introduced cheaper Thanksgiving meal packages to attract price-sensitive consumers.
Rising economic pressures have led to multiple forecasts indicating a relatively subdued holiday shopping season this year. The government shutdown has also made consumers uneasy in the days leading up to the critical shopping season.
Target’s stock price has dropped 35% this year. Fiddelke stated that the company will reinvest around $1 billion next year to improve its stores, product selection, and digital capabilities, bringing the total additional investment for next year to $5 billion.
Fiddelke, currently the Executive Vice President and incoming CEO & COO, stated in a statement released on Wednesday, “We are laying the foundation for a stronger, faster, and more innovative Target.”
Target is collaborating with OpenAI to provide customers with carefully curated shopping experiences through Apps for ChatGPT. Target is expected to be one of the first retailers to offer single-transaction purchases of multiple items, fresh groceries, and options for curbside pickup and order self-collection through this platform.