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Target Store in Jersey City, New Jersey
A Target corporate logo displayed outside its store (Gary Hershorn/Getty Images)

Target slumps after missing Q1 estimates and slashing full-year guidance

The retailer blamed softer discretionary spending and consumer backlash for the chilly quarter, while warning of higher prices to come.

Nia Warfield

Target shares dropped over 4% in early trading Wednesday after the retailer missed Q1 estimates and cut its outlook for the year.

Adjusted earnings per share came in at $1.30 (excluding gains from litigation settlements), well below FactSet estimates of $1.60. Revenue dipped to $23.85 billion, shy of Wall Street’s $24.32 billion forecast. Comparable-store sales also fell 5.7% while analysts had anticipated a drop of only 2.5%. Digital comparable sales, however, rose 4.7%.

Looking ahead, Target now expects low single-digit sales declines this year, down from its previous forecast of 1% growth, and trimmed its full-year EPS outlook to $7 to $9 from $8.80 to $9.80.

Executives pointed to weaker discretionary spending, consumer pushback following the recent rollback of some DEI initiatives, and tariff concerns for the disappointing quarter. Target CEO Brian Cornell said the company has now lost market share in more than half of its 35 tracked merchandise categories.

On the tariff front, Target plans to raise some prices to offset higher import costs. The company is continuing to shift production away from China, where half its goods are still made. Target’s private label sourcing from China has already dropped from 60% to 30%, and it expects to bring that down to 25% by next year.

The retailer also announced leadership shake-ups and a new “Enterprise Acceleration Office” led by COO Michael Fiddelke, aimed at streamlining operations and reigniting momentum. Legal chief Amy Tu and strategy head Christina Hennington will also be stepping down.

Heading into Wednesday’s session, Target shares were down about 28% year to date.

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Nike sinks to lowest level since 2014 after warning of “challenged” sales environment in Q4 report

Did Nike do it?

Investors had a mixed reaction after the global sports apparel company reported its fourth quarter earnings on Tuesday after the bell. Shares initially rose 5% as Nike beat out Wall Street expectations amid a hefty tariff refund bonus. However, the stock then sank to its lowest level since August 2014 in postmarket trading.

Here are the Q4 numbers:

  • Revenue of $11.0 billion (estimate: $10.8 billion).

  • Adjusted earnings per share of $0.20 (estimate: $0.12).

Ahead of this report, Nike warned that results would be flattered by a one-time tariff refund (now estimated at roughly $0.52 per share for the bottom line). That gave the company an extra cushion in snapping its streak of seven quarters of year-over-year profit declines.

Over the past year, the company had been punished by tariffs on imported goods, stagnant consumer spending, and increasing competition from other footwear brands like New Balance, Adidas, and Hoka.

Outgoing CFO Matthew Friend deemed it an “increasingly challenging operating environment, where sell-through remains challenged.”

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