Retail giant Target continues to struggle, with its sales declining by nearly 3% in the latest earnings call. CEO Brian Cornell attributed the drop to consumers spending less on discretionary goods due to uncertainty over tariffs, as well as a customer boycott sparked by the company’s decision to roll back DEI initiatives.
The company has seen its share price drop 37% over the past year and fell further with today’s announcement. A significant leadership shake-up includes the departure of two women from its C-suite team: Christina Hennington and Amy Tu. Target is also creating a new “Enterprise Acceleration Office” to drive growth and efficiencies.
Analysts are skeptical that these changes will turn things around, citing the company’s history of mistakes. Industry expert Neil Saunders said the moves “do nothing to restore confidence” in the company, which has lost its way on several fronts. Independent retail consultant DeAnn Campbell expressed concern over Hennington’s departure, saying she was a key player in Target’s DEI program and would be missed by the company.
Target’s struggles are attributed not just to the recent controversy but also to a lack of investment in stores and products for much longer. The company’s tired stores have had a bigger impact on its declining financials than a one-time boycott. Competitors like Walmart are making inroads with both their products and in-store experience, further eroding Target’s market share.
The company’s recent efforts to boost sales and profits may be short-sighted, according to Saunders, who noted that increased net income reflects a lack of investment in staffing and store maintenance. As the retail landscape continues to evolve, Target must address its underlying issues to regain momentum.
Source: https://fortune.com/article/target-earnings-drop-tariffs-dei-headwinds-c-suite-shakeup