Target's new chapter of growth begins this year because we're clear on Target's place in retail.
That place used to be as an omni-channel leader which championed a re-defined role for the physical store at the same time that the rest of retail was throwing itself into online to take on the Great Satan of the sector, Amazon.
I think we can all agree at that time, the plan was not met with universal applause. I won't name names, but a few [people] might have pulled me aside and said, ‘Brian, are you sure this is the path you want to pursue? Do you really want to bet the company on stores?’. At that time, people were closing stores, not opening them. They were cutting costs, not investing in their teams. But we've never been a brand that falls in line with the crowd...Two years later, we've re-defined what it means to be welcoming, inspiring and rewarding and retail.
But that was a while ago now. Cornell is gone and for the past few years, post-pandemic, Target has struggled to hit the bullseye it’s aiming for. Its latest numbers, released this week, are a slight improvement, but a far cry from the boom days of a few years ago.
Q4 profit was down from $1.10 billion a year ago to $1.05 billion, with overall sales down 1.5 percent to $30.45 billion. For the full year, total revenue decline was 5.2% to come in at $104.6 billion, with profit down 9.4% to $3.705 billion.
So for Cornell’s replacement as CEO, Michael Fiddelke, the task ahead is clear, saying:
A thriving growing Target is the only goal.
Tech leaning
To that end, the retailer intends to carry on leaning into its practice of investing heavily in both offline stores and technology innovation, he says:
We're leveraging technology to support our company's digital growth and enhance the in-store experience. That balance has been skewed in recent years by explosive digital growth. But today, we're using technology to keep momentum building in our digital business and simplify work for our store teams. So they can spend more time serving our guests. And we're making a more than $2 billion incremental investment across the business this year,
He adds:
[Technology is] woven into everything that we do. And that's because of Target. We don't chase technology for technology's sake. We believe in technology with a purpose. In our case, making shopping more joyful and it should directly benefit our team and our guests. So whether it's making it easier for guests to find the perfect product and they browse our aisles are putting technology into the hands of our team so they can better serve our guests, our tech investments are all in service of our ambition to be the most delightful experience in retail, the same can be said for why we prioritize strengthening team and communities. This has always been core to who we are, and it will continue to be at the center of this new chapter for Target.
Cara Sylvester, Target Chief Merchandising Officer, is on the frontline here, building on a promise made a year ago to modernize the firm’s digital and loyalty ecosystems to make them more personalized and more intuitive:
Since then, our team has transformed the app experience, strengthen our personalization capabilities and continued scaling Roundel, Target Plus and Target Circle 360. Together, these capabilities form our digital growth flywheel and they are driving consistent growth and deeper engagement across our ecosystem.
Today, our AI-driven personalization engine powered by Target Circle generates billions of dollars in incremental sales, delivering targeted offers and rewards that increase engagement and lifetime value...We’re expanding our focus on personalized rewards this spring. We're also offering more member events like Target Circle deal days and introducing experiential benefits, including category-specific rewards in beauty and simple moments, like Starbucks offers, to enhance in-store visits and drive incremental trips.
AI, of course
Overall tech is something that Target needs to lean in on even more going forward, says Fiddelke, particularly around AI:
We're putting real investment behind it. It shows up across the business, as you might expect. When we're using AI to its fullest, it's personalizing a guest experience so that if you open the Target app, the offers you get are as relevant as they can be because AI is helping make that happen.
As a retailer, agentic commerce is obviously high on the Target agenda, although Fiddelke strikes a pragmatic note here in contrast to the hype seen elsewhere:
My hunch is we're a ways away from understanding every economic put and take. The thing that we're laser-focused on is making sure we're where the consumer is and that means being at the forefront of innovation when it comes to how the consumer purchase funnel is going to transform. AI is certainly going to play a role there.
Target has two advantages here, he argues:
One is we've got great scale. We're at the forefront of innovation with some of the big tech partners in this space, and that allows us to make sure that, just like we did with social as it exploded, we're staying front and center for guests as the way they shop evolves in the months and years to come in ways that probably none of us can fully predict. But we've got the scale to be relevant there. and we're already innovating with those partners. Being one of the first retailers to have an immersive shoppable experience is a good example of us leaning in in the right way there.
The second advantage that I think we have is we're curators by nature, and some of what AI does is try to bring you the best thing fastest. We run the whole business that way because of the work we do to curate the very best in both in-store and online. So I actually think that in many ways, we're wired to think about it the same way AI is going to think when it comes to curating what matters most. That's our mission every day - to make sure in our 2,000 stores that we've curated the thing that you're going to most resonate with at the right price. So I have a lot of confidence we'll be able to continue to do that online, too.
My take
AI is also working alongside human intelligence, he argues:
The humanity of the store experience is part of our secret sauce. Well, every minute we can save a store team member unloading a truck or even in the steps they take across the store minute that they can re-invest serving our guests. And so you'll see us use technology in support of the humans. And the two humans we're focused on are our guests and our team members.
Remembering the human being is something that really matters, he explains, noting that there have been “challenges that came with explosive digital growth” in the past:
Don't get me wrong. I'm not wishing away for a second a $20 billion profitable digital business and the work our teams did to support that growth as it exploded through the pandemic and has continued to grow from there. excellent work, I couldn't have done it without the store teams at the center of it for sure.
March 4, 2026
