Target Faces Deepening Struggles Amid 2025 Sales Drop

New York — Target is facing serious challenges as recent reports reveal declining sales during the latest quarter. On Wednesday, the company announced it has lowered its full-year profit guidance. Target, which has struggled with stagnant sales for about four years, also revealed plans to cut 1,000 corporate jobs, which represents roughly 8% of its global workforce.

The company is pinning hopes on a new CEO and strategic investments to help reverse its fortunes. However, the quarterly financial report indicates that there is no simple solution to the issues Target is encountering. Analysts suggest that the retailer is poorly positioned for today’s economic climate, as it continues to offer products that do not resonate with increasingly budget-conscious consumers.

Target specializes in affordable chic clothing and home decorations, but many shoppers no longer think they are getting the best deals there. With inflation affecting family budgets, customers have shifted their spending habits to essentials and value retailers like Walmart, Amazon, and TJ Maxx.

In pre-market trading on Wednesday, Target’s stock slipped by 1%, continuing a downward trend that has seen shares decrease by approximately 35% this year. Neil Saunders, an analyst at GlobalData Retail, commented, ‘Target is really struggling and does not seem to be able to climb out of the hole it has dug itself into.’

The company is also experiencing consumer backlash linked to changes in diversity initiatives. Earlier this year, Target made decisions that left customers feeling blindsided, prompting protests that affected its sales. In August, Target CEO Brian Cornell announced he would step down after 11 years, with the company opting for an internal candidate, Michael Fiddelke, to take over as CEO next year.

As the holiday season approaches, Target has announced price reductions on 3,000 everyday products and food items and plans to double the assortment of new holiday products compared to last year. It has also committed to increasing spending by 25%, to $5 billion, for store remodels next year. Additionally, Target announced a partnership with OpenAI, allowing customers to shop on Target through ChatGPT.

Fiddelke stated on a call with analysts, ‘We’re acting with urgency to make the changes and investments to position Target for sustainable and profitable growth.’