The company, long a fierce corporate advocate for the rights of Black and LGBTQ+ people, scaled back many diversity, equity and inclusion initiatives in January, after they came under attack by conservative activists and the White House. Target’s retreat created another backlash, with more customers angered by the retailer’s reduction of LGBTQ+-themed merchandise for Pride Month in June of 2023.
Shares fell 3.5% in midday trading Wednesday.
Target Q1 2025 earnings highlights
- Sales: $23.85 billion versus $24.23 billion expected.
- Earnings: $1.04 billion
Target’s latest numbers
Quarterly sales fell 2.8% from last year to $23.85 billion, and that was short of the $24.23 billion Wall Street expected, according to FactSet. Target earned $1.04 billion, or $2.27 per share, for the period ended May 3. That compares with $942 million, or $2.03 per share, in the year-ago period.
Target cut its annual sales projections Wednesday. The company now expects a low-single digit decline for 2025 after projecting a 1% increase for sales in March. It also forecast annual per-share earnings of $7 to $9, excluding gains from legal settlements this year.
For the year, analysts expect earnings per share of $8.34 on sales of $106.7 billion, on average. Comparable store sales, those from established stores and online channels, fell 3.8%. That includes a 5.7% drop in store sales and a 4.7% increase in online sales. That reverses a comparable store sales increase of 1.5% in the previous quarter.
“We’ve got to drive traffic back into our stores or visits to our site.”
—Target CEO Brian Cornell
Falling transaction both online and in person
The number of transactions across online and physical stores fell 2.4%, and the average ticket dropped 1.4%. Target said it couldn’t reliably estimate the individual impact of each of the factors that were hurting its business.
Target is setting up a new office, to be led by Chief Operating Officer Michael Fiddelke, focussed on faster decision-making to help accelerate sales growth. The company said that current Chief Strategy and Growth Officer Christina Hennington is stepping down from her position and will be in a strategic role until Sept. 7.
Neil Saunders, managing director of GlobalData Retail, said Hennington had been considered a potential successor to Cornell. “This is a tacit admission that Target isn’t doing a good enough job in some areas, so we welcome it as a potential way to engineer change,” Saunders wrote in a note published Wednesday. “But we caution that it can only accomplish its goals if the closed and defensive culture at Target changes for the better.”
