Target Q2 Down, Yet Beats Street, Backs FY25 View, Names Michael Fiddelke CEO; Shares Hit

(RTTNews) - Shares of Target Corp. were losing around 11 percent in the pre-market activity on the NYSE, after the retail major reported Wednesday lower profit and comparable sales in its second quarter. However, earnings per share and top line beat market estimates, and the firm maintained its fiscal 2025 outlook.

Separately, Target announced the appointment of Michael Fiddelke, chief operating officer, to succeed Brian Cornell as chief executive officer. Further, Cornell will transition to the role of executive chair of the Board of Directors. Both appointments are effective February 1, 2026.

Brian Cornell, chair and chief executive officer of Target, said, "With the board's unanimous decision to appoint Michael Fiddelke as Target's next CEO, I want to express my full confidence in his leadership and focus on driving improved results and sustainable growth. He's contributed meaningfully during times of change and played a critical role in establishing the differentiated capabilities that will continue to drive Target forward.... Today, we also reported our second quarter earnings, which showed encouraging signs of recovery, including improved traffic and sales trends — particularly in our stores — and disciplined cost management in a challenging retail environment."

CEO Appointment

Target noted that Fiddelke will also join the Board of Directors on the same date, with Cornell moving into the role of executive chair.

The company plans to make an announcement about the next chief operating officer at a later date.

Fiddelke has been with Target for 20 years, and prior to being chief operating officer was chief financial officer.

According to the firm, he has been instrumental in building many of the company's core strengths, holding leadership roles across merchandising, finance, operations and human resources.

Christine Leahy, lead independent director of Target's Board of Directors, said, "It is clear that Michael is the right leader to return Target to growth, refocus and accelerate the company's strategy, and reestablish Target's position as a leader in the highly dynamic and fast-moving retail environment. Michael's tenure gives him unmatched enterprise insight and a base of strong team trust. But what sets him apart is how he combines those strengths with a 'fresh eyes' mindset, challenging the status quo to evolve how the business operates, differentiates and delivers long-term value."

Outlook

For fiscal 2025, the company continues to expect earnings per share of $8.00 to $10.00, and adjusted earnings per share of around $7.00 to $9.00, with a low-single digit decline in sales.

The Wall Street analysts on average expect the company to report earnings of $7.34 per share. Analysts' estimates typically exclude special items.

Q2 Results

In the second quarter, net earnings totaled $935 million, down 21.5 percent from $1.19 billion last year. Earnings per share declined 20.2 percent to $2.05 from $2.57 a year ago. Analysts on average had expected the company to earn $2.04 per share.

The second-quarter operating income of $1.32 billion was 19.4 percent lower than last year.

The company's net sales for the period fell 0.9 percent to $25.211 billion from $25.452 billion last year. The Street was looking for net sales of $24.9 billion for the quarter.

A merchandise sales decrease of 1.2 percent was partially offset by a 14.2 percent increase in non-merchandise sales.

In the quarter, comparable sales decreased 1.9 percent, reflecting a comparable store sales decline of 3.2 percent, partially offset by comparable digital sales growth of 4.3 percent.

In the pre-market activity on the NYSE, Target shares were losing around 10.5 percent to trade at $94.35.

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