Target is investing billions in remodels, merchandising and same-day delivery as its new CEO works to boost traffic and restore annual sales growth.
Target’s new CEO says shoppers will soon see cleaner shelves, shorter checkout lines and revamped home and apparel sections as the retailer rolls out a $5 billion overhaul aimed at reviving sales. "If I were to step back and draw a heat map of the entire store, highlighting where we're making changes this year, you'd see more change to what we sell and how we sell it than you've seen in a decade," CEO Michael Fiddelke told investors during a Wednesday earnings call.
The company plans to spend more than $2 billion this year, including $1 billion for new stores and remodels and another $1 billion to improve the in-store experience. An additional $1 billion is earmarked for 2026 for remodels and upgrades to same-day delivery and order pickup. Executives are overhauling 75% of decorative accessories, relaunching the Threshold home brand, speeding up trendy apparel cycles and adding Target Beauty Studios in 600 stores. Fiddelke said the retailer is also investing more in payroll and training to fix reliability issues. CONSUMER CONFIDENCE REBOUNDS IN FEBRUARY AS AMERICANS GROW LESS PESSIMISTIC ABOUT JOBS "There’s real work for us to do here," he said. "Delight is our standard. That means getting the basics right – sharp pricing, strong in-stocks, wicked fast same-day delivery." Target is sharpening its merchandising focus as discretionary categories like apparel and home goods – nearly a third of sales – remain under pressure. "Target is not an everything store. That’s not what guests want from us," Fiddelke said, adding shoppers are looking for "a strong trend-forward assortment that they can trust to deliver quality and value." Fiddelke succeeded Brian Cornell as chief executive in early February, and outlined some of his first priorities in a memo to staff, including sharpening Target’s merchandise mix, improving stores and its website to make shopping easier and more appealing, and using technology to streamline operations and personalize the customer experience. The company also plans to invest more in employees and strengthen ties to the communities where it operates, Fiddelke said in the memo. "Priority 1 through 10 is accelerating Target's growth," Fiddelke said in an emailed statement to FOX Business at the time, adding that the company is "moving with urgency and focus." Comparable sales fell 2.5% in the fourth quarter, though beauty sales rose 1.1% and food and beverage increased 1.8%. Target projects 2026 sales growth of 2%, above Wall Street expectations, and forecasts full-year earnings of $7.50 to $8.50 per share. Loyalty remains central to the strategy. "Members of our loyalty program, Target Circle, spend 3x more on average. And those enrolled in Target Circle 360 with unlimited same-day delivery spend 7x more," Fiddelke said. CLICK HERE TO GET FOX BUSINESS ON THE GO Target shares are up about 25% so far this year. Analysts say the turnaround will depend on whether the investments can consistently drive more traffic, particularly as Walmart continues to compete aggressively on price and delivery. Reuters contributed to this report.
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