Target stock is falling primarily due to several converging factors:
- Leadership Change Uncertainty: In August 2025, Target announced that CEO Brian Cornell would step down in February 2026, to be succeeded by an internal executive, Michael Fiddelke. This internal appointment disappointed many investors who were hoping for an external hire and a fresh strategic direction, causing an immediate nearly 10% drop in the stock price.
- Sales Declines: Target has experienced a decline in same-store sales and foot traffic, with a 1.9% year-over-year drop in Q2 2025. Consumer spending on discretionary items like apparel and home goods has weakened due to inflation and economic pressures.
- Brand Challenges: Changes in Target's social and political stances, particularly its retreat in diversity, equity, and inclusion (DEI) initiatives, sparked backlash and boycotts, impacting sales and brand reputation negatively.
- Economic and Tariff Pressures: Rising tariffs on imported goods have forced Target to increase prices by up to 8%, higher than competitors like Walmart, eroding its value proposition and pushing customers toward cheaper alternatives.
- Fierce Competition: Target faces stiff competition from Walmart, Amazon, and discount retailers like Dollar General and Aldi, which appeal strongly to budget-conscious shoppers.
- Investor Sentiment: Despite hitting earnings beats on paper, investors remain skeptical about the company's ability to regain growth momentum, which, coupled with ongoing margin pressures and uncertain leadership, has kept the stock under pressure.
As a result, Target stock has declined over 60% from its 2021 highs and about 25% year-to-date in 2025, reflecting these operational and strategic challenges.
