• by Sarah Mahoney , 11 hours ago

Target posted yet another quarter of declining sales. But listen to the new management team talk, and you'd be forgiven for feeling cautiously optimistic.

New CEO Michael Fiddelke and chief merchandising officer Cara Sylvester used an earnings call this week to do something their predecessors rarely, if ever did: admit what went wrong, and explain specifically how they plan to fix it.

"Our performance the last few years has not met expectations, and that is on us," Sylvester said. "We lost the clarity and the discipline that make Target a place loved by busy families."

The numbers behind that admission are not pretty. For the fourth quarter, sales fell 1.5% to $30.5 billion, with comparable store sales down 3.9%. Operating income dropped 5.9% to $1.4 billion. For the full year, net sales decreased 1.7% to $104.8 billion.

But Fiddelke projected a 2% sales gain for 2026, and while that looks modest against Walmart's forecast of 3.5% to 4.5% growth, observers received it as a welcome surprise from a retailer that has been short on good news.

The turnaround strategy, as Sylvester laid it out, is less about competing on price and more about reclaiming the vibes that once made Target genuinely distinctive: the sense that shopping there was an experience worth having.

"With the goal of making Target the most delightful experience in retail," she said, the company is reinvesting in style, design, beauty, health, and wellness — the categories where it built its reputation as something more than a discount store.

That includes a relaunch of Threshold, its home goods line, planned for this summer, and the opening of Target Beauty studios in 600 stores. The latter is notable given that Target's partnership with Ulta — once a marquee retail collaboration — quietly unraveled last year, reportedly over concerns about Target's in-store execution.

A newer initiative, internally called Fun 101, is aimed at making toys, gaming, electronics, and books feel more culturally alive by building on fandoms in sports, music, and pop culture. The company believes that same energy can extend to grocery — not by becoming, as Sylvester put it, "an everything grocer," but by bringing Target's design sensibility to food shopping.

The numbers suggest early traction there. New food items are arriving at twice the industry rate, driving $2 billion in sales. In non-alcoholic beverages, for example, newer items drove a 6.5% sales increase last year. And Good & Gather, one of Target's private label grocery lines, is on track to become its first-ever $4 billion store brand. 

Analysts are noting the urgency. "We are encouraged by the more aggressive actions taken by the Target management team," wrote Rupesh Parikh of Oppenheimer, citing investments in health, wellness, beauty, and store-level labor. He continues to rate the company as likely to outperform its peers.

But execution is where Target has stumbled before. Some analysts are skeptical that a leadership team that includes execs who have been with the company for years can credibly claim a fresh start. The deeper structural concern, raised by Brett Hussle of Morningstar, may be harder to solve than any single initiative: "Target's midmarket positioning leaves it vulnerable on both price and assortment," he wrote, "limiting its ability to defend its competitive standing."

That is the tension running beneath all of Target's plans. It is not trying to be Walmart. It is not trying to be Whole Foods. It is trying to be Target again — the version that customers loved — in a retail landscape that has shifted considerably since that version existed.