Target slashes earnings guidance, warns about affordability crisis, and predicts a weak holiday season

Target (TGT) has consistently delivered connected 1 happening successful 2025.

Serving up brutal warnings astir its concern connected net days.

The discount retailer slashed its full-year nett guidance connected Wednesday and warned of a tepid vacation play arsenic strapped consumers conflict done an affordability situation for food, healthcare, and housing.

"Many of the themes stay mostly accordant with what we've shared successful anterior quarters. Guests are choiceful, stretching budgets and prioritizing value. They're spending wherever it matters most, particularly successful food, essentials, and beauty," Target main commercialized serviceman Rick Gomez said connected a telephone with reporters, adding that shoppers are looking for deals connected discretionary items.

The cautious spending wasn't hard to find successful Target's results.

The fig of transactions declined twelvemonth implicit year. Sales dropped successful much discretionary departments, specified arsenic quality and location furnishings.

Read more: Live sum of firm earnings

Target promised to ramp up superior expenditures by 25% successful 2026 to amended the quality of its stores. The institution said it chopped prices connected 3,000 nutrient and household indispensable items past week.

"We judge determination is simply a way to triumph careless of however the macro environments volition proceed to germinate astir us," incoming Target CEO Michael Fiddelke said.

Fiddelke — a Target seasoned — volition win longtime CEO Brian Cornell officially connected Feb. 1, 2026.

The marketplace is calling Fiddelke's bluff successful that the institution could triumph successful a mixed to softening US economical backdrop, 1 besides wherever tariffs are weighing connected costs.

Most analysts connected the thoroughfare are Neutral oregon Sell rated connected Target's stock, contempt it being down 35% this year.

"We spot expanding longer-term income and borderline risks for Target connected slowing integer income growth, a deficiency of standard successful integer advertizing and third-party marketplace, elevated tariff, pricing and merchandising headwinds, and expanding competitory threats from Walmart (WMT) and Amazon (AMZN)," Bank of America expert Robert Ohmes said.

"Target besides has higher tariff vulnerability vs. Walmart," helium added, "and we deliberation merchandising enactment and concern changes (including Ulta Beauty (ULTA)) could perchance exacerbate risks successful the dynamic and challenging sourcing environment."

Ohmes rates Target shares arsenic an Underperform.

• Net sales: -1.5% twelvemonth implicit twelvemonth to $25.3 billion, vs. estimates for $25.04 billion

• Gross nett margin: 28.2% vs. 28.3% a twelvemonth ago, vs. estimates for 27.51%

• Diluted net per share: -3.9% twelvemonth implicit twelvemonth to $1.78, vs. estimates for $1.73

• Comparable sales: -2.7% twelvemonth implicit year, vs. +0.3% estimation (Last year, comparable income roseate 2%.)

  • Digital comparable sales: +2.4%