Target is pouring more money into stores, technology and fulfillment after another quarter of weakening demand and tightening consumer budgets.
The retailer posted third-quarter net earnings of $689 million, down 19% from $854 million a year ago. Adjusted EPS fell to $1.78 from $1.85.
Revenue also softened: net sales slipped 1.5% to $25.3 billion, while comparable sales dropped 2.7% — the company’s third consecutive quarterly decline and a steeper fall than Q2’s 1.9% dip.
The results follow Target’s largest corporate job cut in a decade, a reduction of 1,800 roles aimed at lowering costs and speeding up internal decision-making.
“Target is struggling to navigate an unsteady environment for consumer spending and its Q3 performance failed to build on the previous quarter’s incremental progress,” said Emarketer principal analyst Sky Canaves.
“Results underscore that a real recovery is still a ways away, and incoming CEO Michael Fiddelke will have tough job ahead when he takes the reins early next year.”
Target still expects a low-single-digit sales decline in Q4 and has trimmed its full-year adjusted earnings outlook to $7 to $8 per share, down from its prior $8 to $9 range.
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The guidance excludes litigation-related gains in Q1 and severance and asset charges booked in Q3.
Incoming CEO Michael Fiddelke said the retailer will stay focused on “our three key priorities: solidifying our merchandising authority, elevating the shopping experience, and further harnessing the power of technology to move at greater pace and consistency, all in support of a return to sustainable growth.” He becomes CEO on Feb. 1, 2026.
With the holiday season underway, Target is leaning heavily into store experience upgrades and new AI-driven features in its mobile app designed to boost in-store engagement and improve value and flexibility for shoppers.
To accelerate that strategy, Target will invest an additional $1 billion in 2026, lifting its planned capital spending to roughly $5 billion.
The funds will support new stores, remodels, in-store experience upgrades, and further expansion of its technology and digital fulfillment capabilities, a 25% increase year over year.
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