Target has been appointed as the new CEO by insider Michael Fiddelke to turn the struggling retailer around after a series of challenges that have fallen significantly behind fellow stocks.
On Wednesday, Big Box retailer announced that 49-year-old Fiddelke will move to the helm of current CEO Brian Cornell on February 1, 2026, by moving to the role of executive chairman. Fidelke, a 20-year company veteran, recently served as Chief Operating Officer.
The news of his promotion has not been much accepted, with the company’s shares falling 10% in pre-market trading.
“We have very mixed feelings about this appointment,” said Neil Saunders, managing director of GlobalData.
“This is an internal appointment that doesn’t necessarily improve the issues of established group thinking and the introverted thinking that has plagued our targets for many years,” Sanders said.
Sanders also said he was surprised that Cornell moved into the role of executive chair and called it “a reward for failure.”
Sanders said his promotion to executive chairman risks that those who are not leading their targets will have some influence on future policies.
“In our view, the boardroom needed sunnyness,” Sanders said.
Fidelke said his “number one goal is to bring us back to growth.”
His remarks came in a media call following Target’s second quarter revenue report, during which he stuck to his annual forecast.
Fidelke said his three priorities are improving the quality of the products, values and styles that Target offers, ensuring a more consistent shopper experience and embedding more technology in every part of the business.
“We need to move faster, much faster,” he said.
Target struggles with product failure, retail crime and inventory management. The past year has faced challenges in maintaining stable sales growth, and the January pullback to diversity, equity and inclusion policy has angered loyal customers who have long praised the company’s commitment to inclusion.
Target sales are declining as customers find flaws in off-price department store chains like Walmart and TJ Maxx for low prices. But many analysts think that targets are stumbling because they no longer think of it as a place for consumers to go to affordable and stylish products.
The company’s struggle was revealed with consistently weak share performance. Stocks have fallen 23% over the past five years, with Walmart rising 125% and Costco more than tripled.
“We’ve been working hard to get the most out of our business,” said Steven Shemesh, an analyst at RBC Capital Markets.
“In either case, however, TGT faces a sudden and difficult battle to close the gap with competitors in the increasingly digital world,” Shemesh said.
Target reported on Wednesday that comparable store sales in the second quarter fell 1.9%, a smaller drop than expected, down 3%. Operating profit fell to 5.2% from 6.4% in the same period last year. This decline was driven by deeper markdowns, costs from cancelled purchase orders, and weak demand for discretionary items that make up a large part of its product mix.
The target also retained its annual forecast after lowering them in May. It denounced weak demand for mostly discretionary products on sale, such as apparel and electronics.
Regarding tariffs and pricing, the company has repeatedly taken its stance from May, saying price increases would only be considered a last resort.
Attract customers
Having led the target for 11 years, Cornell has looked at progress in diversifying the company’s procurement strategy. This includes reducing reliance on store branded products from China and leveraging the size of the target to more effectively navigate the tariff situation.
Retailers are taking steps to turn themselves around, including strengthening their efforts to seduce customers who are worried about the economy. These efforts include offerings of 10,000 new items starting at $1, mostly under $20, and launched several affordable private label lines.
Still, consumers remain selective and are motivated to get promoted as inflation continues to strain household budgets, target executives pointed out in the call.
According to data compiled by LSEG, Target reported second-quarter net sales of $25.2 billion, breaking its $25.22 billion estimate. Excluding the items, the company reported earnings per share of $2.05.
Home Improvement Company Home Depot also held its annual target, but warned of increased prices due to tariffs. Retail Bellwether Walmart reported its quarter results on Thursday.
