Target has appointed Michael Fiddelke as its next chief executive officer, effective February 1, after reporting second-quarter results that topped Wall Street expectations but underscored persistent pressure on sales and store traffic.
The Minneapolis-based retailer posted revenue of $25.21 billion, ahead of the $24.93 billion anticipated, while earnings per share came in at $2.05 versus the $2.03 expected.
Despite this performance, shares fell 10% in premarket trading as the market reacted to stagnant growth, shifting consumer behaviour, and leadership transition.
Michael Fiddelke takes over as CEO
Target confirmed that Chief Operating Officer Michael Fiddelke, a 20-year veteran of the retailer who previously served as chief financial officer, will succeed Brian Cornell as CEO on 1 February 2026.
Cornell will transition to executive chair of the board.
Fiddelke, 49, outlined his focus areas, including improving customer experience, re-establishing the retailer’s design and style leadership, and enhancing operational efficiency through technology.
The appointment comes as Target struggles with store traffic, which has declined almost every week since late January, according to Placer.ai.
Shares of the retailer are also down about 60% from their all-time high in late 2021.
Sales trends and financial outlook
Target reiterated its full-year forecast, expecting a low single-digit percentage decline in sales and adjusted earnings per share in the range of $7 to $9, excluding gains from litigation settlements.
In the second quarter ended 2 August, net income fell to $935 million, or $2.05 per share, from $1.19 billion, or $2.57 per share, a year earlier.
Revenue also dropped from $25.45 billion in the same period last year.
Comparable sales decreased by 1.9%, with customer transactions down 1.3% and average transaction value slipping 0.6%.
Digital sales were a bright spot, rising 4.3% year on year, while non-merchandise sales, including advertising through Roundel, membership programmes, and the third-party marketplace, climbed 14.2%.
Category performance and margin pressures
Target’s profit margins were pressured by higher markdown rates, cancellation costs for purchase orders, and increased sales in lower-margin categories such as electronics and toys.
The company acknowledged losing ground in home goods, a category it was known for during the pandemic, though efforts are being made to revive design and fashion leadership.
Recent additions such as Disney and Marvel-themed bedding in its Pillowfort brand are examples of this push.
Performance across all six key merchandise categories improved from the first quarter to the second, though results remained negative overall.
Target said that outside retail, its advertising and membership businesses provided some cushion to falling merchandise sales.
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