Retail company appoints new chief executive in bid to halt falling sales figures
Target Announces New CEO and Growth Strategy Amidst Sales Decline
Target has announced that Michael Fiddelke, the company's current Chief Operating Officer, will take over as CEO from Brian Cornell, effective February 1, 2026. Cornell, who has been in the role for over a decade, will step down after more than a decade of leading the retail giant.
Fiddelke, who has been with Target for over 20 years, has held leadership roles across merchandising, finance, operations, and human resources. In his current position, he has overseen efforts that enabled exponential growth across the business. Notably, he spearheaded enterprise efforts to deliver more than $2 billion in efficiencies.
The company's decision to elect Fiddelke as the new CEO comes at a time when Target is facing a low-single digit decline in sales for fiscal 2025, down from its previous forecast of net sales growth of about 1%. The decline is partly attributed to shoppers pulling back on merchandise purchases.
To combat this, Target has announced a new multi-year growth initiative called the Enterprise Acceleration Office. This office aims to help the company operate more nimbly and promote growth. The strategy is focused on digital innovation, store-as-hub fulfillment, and AI-driven personalization to stay competitive and improve customer experience.
Target is leveraging artificial intelligence (AI) to enhance employee efficiency, improve inventory management, and deliver AI-driven personalization across its retail operations. Specifically, AI tools like the Store Companion provide employees with real-time data to better serve customers and manage stock, helping to reduce out-of-stock situations. Generative AI supports inventory management and personalization efforts, which are crucial for maintaining customer trust and boosting operational efficiency.
In the recent quarter, Target's net sales declined 0.9% year-over-year to $25.2 billion. Comparable store sales fell 3.2%, but there were improvements compared to Q1 2025, especially in physical stores. Despite these signs of recovery, net earnings dropped 21.5% to $935 million, and GAAP and adjusted earnings per share decreased from $2.57 to $2.05 year-over-year. Digital sales remain a growth area, with digital comparable sales increasing by 4.3%, and same-day delivery sales up 25% year-over-year.
The company's profit for the quarter was $1.3 billion, down about 19% from last year. Online sales, however, grew a little over 4%.
Target's extensive store network fuels its same-day delivery and curbside pickup services, which continue to grow. In fact, 97.7% of sales were fulfilled through stores in the recent quarter.
In conclusion, Target's ongoing use of AI to bolster operational efficiency and customer service, combined with its new growth strategy, aims to help the company navigate a challenging retail environment marked by slight sales declines but gains in digital and delivery channels.
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