Shares in U.S. retail giant Target (TGT) slumped 6% in pre-market trading as it blamed customer caution about President Trump’s tariffs for a Q1 earnings miss and sales slide.
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Spending Slump
Target posted adjusted earnings per share of $1.30 for the quarter ended April 29, missing the analyst consensus of $1.65. Revenue came in at $23.85 billion, below estimates of $24.35 billion and down 2.8% year-on-year.
Comparable sales decreased 3.8% in the first quarter with the average amount customers spending during their online and in-store visits dwindling by 1.4%.
Target said it now expects a low-single digit decline in sales and adjusted EPS of $7.00 to $9.00 for the full 2025 year. The retailer previously guided for net sales growth in a range around 1% and adjusted EPS between $8.80 and $9.80.
Target’s management team blamed weaker consumer sentiment, uncertainty about tariffs and even a backlash to its decision earlier this year to rollback its DEI strategy.
Long-Term Struggles
CEO Brian Cornell later told reporters that of the 35 merchandise categories that the company tracks internally, the company gained or held market share in only 15 of them.
There were some highlights with digital comparable sales up 4.7%, 35% growth in its same-day delivery powered by Target Circle 360 and strong fashion demand particularly women’s swimsuits and kids clothing. It also highlighted a strong Valentine’s Day and Easter.
The overall gloomy performance however continued the company’s long-term struggle to return to growth. Its shares have slumped over 37% in the last 12 months.
Target said it was creating a new department called the Enterprise Acceleration Office, which will look for methods to simplify company operations, use technology in new ways and speed up Target’s growth.
Cornell did not reveal too much about the company’s pricing strategy to cope with tariff cost hikes. Rival Walmart (WMT) is set to hike prices this month but Cornell said price was the “very last resort” to mitigate tariffs.
Is TGT a Good Stock to Buy Now?
On TipRanks, TGT has a Moderate Buy consensus based on 10 Buy, 16 Hold and 2 Sell ratings. Its highest price target is $188. TGT stock’s consensus price target is $119.04 implying an 21.32% upside.
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