Target stores have continued to see a decline in sales and has responded with increased investment pledges. (Photo by Michael M. Santiago/Getty Images)
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Target has moved quickly to arrest weakening profits and softening sales with a pledge to an extra $1 billion increase in capital spending, after the company set out a bold investment stance even as its near-term outlook remains subdued.
Against a challenging backdrop, the company plans to lift its capital expenditures in 2026, bringing next year’s total to roughly $5 billion. The commitment will underwrite new stores, remodels and upgrades to digital infrastructure and fulfilment capabilities, signaling management’s view that heavier investment is necessary to strengthen the brand and reignite growth.
The news came as the retailer reported third-quarter net earnings of $689 million, a 19% drop from a year earlier, while adjusted earnings per share slipped to $1.78 from $1.85. Revenue also edged lower, with net sales down 1.5% to $25.3 billion.
Comparable sales fell 2.7%, dragged by a 3.8% decline in store traffic, while there was modest growth of 2.4% in digital sales, helped by expanded same-day delivery tied to its paid Target Circle 360 program.
Target Incoming CEO
Michael Fiddelke, who will assume the chief executive role on Feb. 1, 2026 said that the retailer intends to focus on tightening its merchandising strategy, improving the in-store experience and accelerating the use of technology to support a more consistent operating platform.
He positioned these moves as central to restoring sustainable growth after several uneven quarters and said: “We’re laying the foundation for a stronger, faster and more innovative Target.”
Target is also attempting to grab consumer attention through the all-important holiday period with price reductions across thousands of items, seasonal promotions and new app features using AI to support in-store navigation.
The push comes as the group continues to trim overheads, including the recent loss of about 1,800 corporate roles — its largest round of layoffs in a decade — in an effort, the company said, to simplify interbal decision-making and improve efficiency.
Man in the middle: Target COO Michael Fiddelke will take the helm on Feb. 1 next year. (Photo by Elizabeth Flores/The Minnesota Star Tribune via Getty Images)
Star Tribune via Getty Images
Despite the investment plan, management maintained guidance for a low-single-digit decline in fourth-quarter sales and cut its full-year adjusted earnings forecast to roughly $7 to $8 a share, down from an earlier range of $8 to $9.
In the summer Target tapped company veteran Michael Fiddelke, who was serving as Chief Operating Officer, to take the reins as CEO. In his COO role he had been charged with overseeing a new department — the Enterprise Acceleration Office — which was tasked to look into ways to drive greater speed and agility across the company.
Target Needs To Rediscover Mojo
Fiddelke will step into the top job facing the delicate task of restoring momentum at a retailer that has struggled to keep pace with shifting consumer behavior and intensifying competition. He needs to set out a strategy that convinces investors that Target can regain relevance in a market where value, convenience and speed continue to redraw the competitive map.
Central to that effort will be the effective deployment of the $5 billion war chest and investors will be looking for discipline and a clear path to improved productivity, while investments in fulfilment and technology need to translate into a smoother omnichannel experience that closes the gap with rivals.
The company’s digital operations, though growing, remain a weaker link, and Fiddelke will have to ensure that Target’s same-day delivery and loyalty initiatives genuinely drive repeat visits rather than dilute margins.
He must also rebuild merchandising authority, long one of Target’s core strengths but now undermined by inconsistent execution and a wavering value proposition. That means curating assortments that resonate with cost-conscious shoppers without sacrificing the design-led appeal that once saw the tongue-in-cheek Targé moniker.
He will also need to convince investors who have seen the stock value slide by over a third since the start of the year that an insider and Target veteran is the right person to wake a retail giant from its slumber.