Target sales drop in 1st quarter and retailer warns they will slip for all of 2025

NEW YORK AP Target s challenge to revive sales and its status as a cheap chic retailer just got more complicated The discounter declared on Wednesday that sales fell more than expected in the first quarter and the retailer warned they will slip for all of year as its customers worried over the impact of tariffs and the financial market pull back on spending Target also explained that customer boycotts did various damage during the latest quarter The company long a fierce corporate advocate for the rights of Black and LGBTQ people scaled back several 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 Shares fell in morning trading Wednesday Quarterly sales fell from last year to billion and that was short of the billion Wall Street expected according to FactSet Target earned billion or per share for the period ended May That compares with million or per share in the year-ago period Target cut its annual sales projections Wednesday The company now expects a low-single digit decline for after projecting a increase for sales in March It also forecast annual per-share earnings of to excluding gains from legal settlements this year For the year analysts expect earnings per share of on sales of billion on average Comparable store sales those from established stores and online channels fell That includes a drop in store sales and a increase in online sales That reverses a comparable store sales increase of in the previous quarter The number of transactions across online and physical stores fell and the average ticket dropped Target noted 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 focused on faster decision-making to help accelerate sales increase The company revealed that current Chief Strategy and Progress Officer Christina Hennington is stepping down from her position and will be in a strategic role until Sept Neil Saunders managing director of GlobalData Retail commented Hennington had been considered a prospective successor to Cornell This is a tacit admission that Target isn t doing a good enough job in several areas so we welcome it as a possible 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 practices at Target changes for the better Target is also intensifying efforts to entice customers who are nervous about the financial system and inflation The retailer will offer new items starting at with the majority under We re not satisfied with these results so we re moving with urgency to address through this period of volatility Target CEO Brian Cornell reported reporters on a call Tuesday We ve got to drive traffic back into our stores or visits to our site Out of merchandise categories including discretionary and essentials that the company tracks it s gaining or maintaining sphere share in only The company disclosed several industry share gains in women s swimwear infant and toddler clothing and ongoing wear The latest results underscore Target s ongoing struggle in newest years to revive sales particularly in nonessentials like fashion and home furnishings as competition grows more fierce Back in March Target had outlined to investors how it was going to bring back its Tarzhay magic defined by affordable but trendy offerings by expanding its store label brands and shortening the time it takes to get products to the shelves from conception That will help the company stay close to trends company executives mentioned But it s been a complicated feat even without the tariff exchange wars Target s shares have fallen more than in the past weeks Target rival Walmart informed strong quarterly sales last week The nation s largest retailer explained it s already raised prices on certain items due to tariffs and that more price hikes are on the way this summer when the back-to-school shopping season goes into high gear For example car seats made in China that sell for at Walmart will likely cost customers another executives commented Target didn t offer specifics on tariffs impact on prices but reported that it was looking at different techniques to offset those costs We look at competition Cornell stated reporters We make adjustments literally each and every week so we re constantly adjusting pricing Specific are going up Chosen will be reduced President Donald Trump s threatened import taxes on Chinese goods were reduced to in a deal released May with selected of the higher tariffs on pause for days Walmart was able to dodge specific of the tariff damage other retailers are suffering because groceries account for about of its U S business Target is more reliant on discretionary items like clothing and accessories with less than a quarter of its sales coming from groceries Target has reduced the number of its store-label products sourced from China to now from in The company says is on its way to reducing that to by the end of next year Target is shifting sourcing to Guatemala and Honduras and is looking to sourcing in the U S Target is being pressured on other fronts as well The company in January mentioned it would phase out a handful of DEI initiatives including a venture designed to help Black employees advance their careers and promote Black-owned businesses Conservative activists and President Trump have sought to dismantle DEI policies in the federal executive schools and at private businesses The pastor of a Georgia megachurch who led a nationwide -day boycott of Target stores in response called last month for a continuation of that effort The Rev Jamal Bryant is seeking a reinvigorated commitment from Target on diversity and he wants more help from Target for Black-owned banks and businesses Target operates nearly stores nationwide and employs more than people Source