You know that guy who jumps into the ring in round 12, after the starting fighter has been getting pummeled all night, and the crowd expects a miracle knockout? Yeah. That's Michael Fiddelke, Target's new CEO, who took over in February and today has to step on stage in Minneapolis to convince Wall Street that the American retail giant still has a pulse.
What to expect from the numbers
Target reports today its fiscal 2025 fourth quarter results (the Christmas quarter, a.k.a. retail's Super Bowl). Analyst consensus, according to LSEG:
- Expected earnings per share: $2.15
- Expected revenue: $30.48 billion
Sounds like a boatload of money, right? And it is. But the problem is these numbers come in below what the company reported in the same period last year. Target itself already warned it expects sales to decline in the "low single digit" range — in plain English: down roughly 1% to 3%.
Adjusted earnings guidance for the full fiscal year 2025 landed between $7 and $8 per share. The year before? $8.86. In other words, actual profit decline in an environment where competitors are crushing it.
The disease is chronic, not acute
This is where the story gets truly ugly. Target's annual sales have been essentially flat for four years. Customer traffic — both in physical stores and online — has fallen for three consecutive quarters. And it's not just that fewer people are walking in: those who do are spending less.
It's like that restaurant that used to be the hottest spot in town, but let the quality slide, changed the menu without asking anyone, and now just sits there, half-empty tables, wondering what the hell happened.
And what happened? A combination of self-inflicted wounds and headwinds:
The self-inflicted wounds: Customers interviewed by CNBC reported messier stores, boring merchandise, and — here's the juicy controversy — the decision to roll back diversity initiatives (DEI) triggered boycotts and market share losses. The company itself admitted that the DEI decision backlash hurt sales. Can you screw up on both sides of the fence at the same time? Target pulled it off.
The headwinds: Inflation. Tariffs. The American consumer is squeezed. When food, energy, and basic bills go up, the first thing that comes out of the cart is that cute t-shirt or the home decor piece you were going to impulse-buy in Target's aisles. And that is exactly the heart of the company's business — impulse merchandise, fashion, home décor, seasonal items.
The competition is running them over
While Target bleeds, Walmart, Costco, and T.J. Maxx are flying high. Strong sales, attracting consumers across all income brackets, growing precisely in categories like apparel and home — the areas where Target historically dominated.
It's like that character in Breaking Bad who thinks he controls the market, until he discovers a competitor has built an empire right under his nose.
Fiddelke's plan
The new CEO, a company veteran rather than an imported executive, has already signaled three priorities:
- Revive the reputation for style and design — because Target became synonymous with "meh"
- Improve the customer experience — translation: stop delivering messy stores
- Use technology to boost performance — the classic "let's be more efficient"
In February, the company announced more investment in store-level labor and cut 500 positions at distribution centers and regional offices. This comes after laying off 1,800 corporate employees in October — the first major layoff in a decade.
So: trimming the fat at headquarters and putting people on the sales floor. Makes sense in theory. But how much are they investing? The company wouldn't say. Transparency grade: zero.
What the market thinks
Target shares have melted nearly 32% over the past three years. They're up 16% this year, closing yesterday at $113.17, with a market cap of $51.24 billion. But that recent bounce has the look of "hope before earnings" — the kind of thing that evaporates real quick if the numbers and the strategic plan don't convince.
So here's the question that lingers: Does Fiddelke have real skin in the game or is he just another corporate exec who's going to parade pretty slides, talk about "transformation," "customer-centric" approaches, and "digital journeys" while the ship slowly sinks?
Tonight we find out if there's a plan or just a PowerPoint.
