Michael Fiddelke’s plan to return Target Corp. to its glory days is off to a running start with an unexpectedly strong first-quarter sales gain.
Fiddelke, a veteran of the retailer who became chief executive officer in February, has been emphasizing style and design in an effort to not just keep the registers clicking, but to leave shoppers with a sense of “delight.”
While that drive started to take shape last year, when he was still chief operating officer, it took off during the quarter ended May 2 — a tough period for consumers, when the war in Iran pushed gas prices higher and stoked uncertainty.
First-quarter sales increased 6.7 percent to $23.4 billion, well ahead of the 3.4 percent increase analysts had figured on, according to Yahoo Finance. All six of the company’s core merchandising categories grew and comparable sales rose 5.6 percent.
Net income fell 24.6 percent to $781 million. But earnings per diluted share came in at $1.71 — 25 cents above the $1.46 analysts forecast.
“We’re on the right path because guests are responding in areas where we are leaning in and driving change,” Fiddelke told reporters during a conference call. “These are areas where we bring style, design and value to not only the products we sell, but how we sell them, creating a distinctly Target experience.
“We’re not going to get everything right,” he said. “We’ll try some stuff that does and [some stuff that] doesn’t work over the course of the year, but to see guests are responding to the newness and merchandising, to see the guests responding to the progress that we’re making in the store experience, those are good things to see.”
The CEO pointed to partnerships with Roller Rabbit, Parke and Pokémon as instances where Target successfully connected, as evidenced by the people queuing up outside stores to get at the collections.
Target x Roller Rabbit
Courtesy of Target
And shoppers get into the stores, they find the environment is changing.
“We’re investing hundreds of millions of dollars in store payroll and enhancing technology for our store team members so they can stay focused on our guests,” Fiddelke said. “We opened seven new stores in [the first quarter], including our 2,000th location, and we remain on track to open more than 30 this year. More than 100 remodels are underway and we’re adding supply chain capacity through multiple new facilities.”
The company is also about to take on its largest reset in food in more than a decade, begin a multiyear reinvention in home and is prepping the new Target Beauty Studio for this fall.
Fiddelke said the first quarter “represents the start of our journey.”
Michael Fiddelke
“As I look back on my two decades at Target, a hallmark of us at our best is we’re truly leading with style and design at an incredible value and that’s true in the products that guests find on our shelves and it’s also true in the experience, the design aesthetic of the store, the experience we create,” he said.
“Style and design need to be at the center of how we think about the business and where that really gets magical is when you couple that style and design with incredible value — style and design that’s affordable is what generates that love of Target,” he said.
And the retailer is feeling a bit more bullish for the year.
Target now expects sales to grow by 4 percent, up from the 2 percent gain previously forecast, with net sales expected to grow each quarter.
And the earnings per share outlook was nudged to the higher range of the previous forecast, calling for EPS of $7.50 to $8.50. Already, Wall Street had $8.11 penciled in.
With the quarter well ahead of plan, that counts as a little caution going forward.
“We weren’t happy with our performance over the last few years and so we want to be careful not to get out over our skis,” Fiddelke said. “We know the business always performs a little better for us if we’re chasing a strong trend with a little bit of inventory versus betting too big only to surprise in the other direction.
“Our goal is to write a new chapter for Target defined by disciplined choices and a clear articulation of our unique role in retail,” he said. “We will not confuse this progress with potential. Our focus is on delivering consistent growth, not just in 2026 but for decades to come.”
