Target Slashes Sales Outlook as Tariff Pressures and DEI Backlash Weigh on Performance

Consumer Weakness and Policy Uncertainty Hit Target’s Core

Target cut its full-year sales forecast after first-quarter results missed expectations, citing softer discretionary spending, tariff concerns, and fallout from its rollback of DEI initiatives. Comparable sales fell 3.8%, with store traffic down 2.4% and average spend per visit dropping 1.4%. First-quarter revenue reached $23.85 billion, falling short of analysts’ $24.27 billion estimate, while adjusted EPS came in at $1.30.

CEO Brian Cornell acknowledged the retailer lost or failed to gain market share in over half of the 35 product categories it tracks. Target now expects a low-single digit sales decline for the fiscal year, a reversal from its previous forecast of modest growth. Adjusted full-year EPS guidance has also been lowered to $7–$9, from a prior range of $8.80–$9.80.

In pre-market trading at 11:02 GMT, Target is trading $95.71, down $2.41 or -2.46%.

Ongoing Tariff Risks Prompt Pricing Actions

Target faces escalating cost pressures from U.S. tariffs, particularly on Chinese imports, which carry a 30% duty. While about half of Target’s merchandise is U.S.-sourced, the company has worked to reduce reliance on China, cutting private label production there from 60% to 30%, with a goal of reaching 25% next year. Chief Commercial Officer Rick Gomez said price hikes will occur selectively, as Target adjusts vendors, sourcing countries, and ordering schedules to offset the impact.

Unlike Walmart, which flagged imminent price increases, and Home Depot, which held steady, Target is treading cautiously. Cornell emphasized daily price adjustments without confirming direct hikes, but higher costs from inventory markdowns in Q1 added pressure, according to CFO Jim Lee.

Leadership Overhaul Aims to Jumpstart Growth

Target announced executive changes and the launch of an Enterprise Acceleration Office led by COO Michael Fiddelke. The new unit will streamline operations and leverage technology for growth. Key exits include Chief Strategy Officer Christina Hennington and Chief Legal Officer Amy Tu, signaling a shift in corporate direction.

Meanwhile, Target saw pockets of strength: digital sales rose 4.7%, same-day deliveries surged 36% through its Target Circle 360 membership, and strong seasonal categories such as produce and women’s swimwear posted gains.

Market Outlook: Bearish Near-Term View on Target Stock

With discretionary demand soft, margin pressure from tariffs, and reputational risks following the DEI pullback, Target’s outlook remains under stress. The downward revision of sales and EPS guidance underscores operational and market headwinds. Until share gains and earnings visibility improve, sentiment on Target stock is likely to stay bearish.

More Information in our Economic Calendar.