On Wednesday, Target reported better-than-expected results, with net sales of $25.21 billion (€21.66 billion) for the second quarter, exceeding estimates of $24.93 billion according to LSEG data.
The few key business indicators are also better than expected. Same-store sales fell by only 1.9%, compared with an expected decline of 3%. Store traffic improved, falling by 1.3% in the second quarter, compared with a 2.4% decline in the first quarter.
Beyond the results, investors are focusing on the changes at the top. Target announced on Wednesday the appointment of Michael Fiddelke as CEO, replacing Brian Cornell.
A controversial appointment
Michael Fiddelke, 49, joined Target in 2003 as an intern and is currently chief operating officer (COO). He will officially take up his new position on February 1, 2026. Brian Cornell will become executive chairman, according to a company statement.
However, this appointment does not seem to have been well received by the markets. The stock was down 10% at the opening bell. "Given the many challenges Target has faced in recent years, it's not surprising that investors were hoping for an outside hire," said Steven Shemesh, an analyst at RBC Capital Markets. "Target faces an uphill battle to catch up with its competitors in an increasingly digital world."
Target has indeed lost ground in recent years, particularly to Amazon and Walmart. This is reflected in its share price performance. However, it should be noted that Amazon is not only a retail giant, but also the leader in cloud computing, which accounts for the bulk of its profitability.
At a press conference, Michael Fiddelke outlined his strategic priorities for turning Target around: improving product quality, value, and style; offering a more consistent shopping experience; and integrating more technology across all operations. "My number one goal is to get us back on the path to growth." At this stage, the market seems doubtful that Fiddelke is the right person to achieve this.
