Target Corporation released its first quarter 2025 financial results, reporting net sales of 23.8 billion dollars, a 2.8 percent decrease versus the same period last year.
The retailer highlighted digital comparable sales growth of 4.7 percent, driven by a significant 36 percent surge in same-day delivery through its Target Circle 360 program and continued growth in Drive Up services.
In a separate release, to address current performance and accelerate its strategic initiatives, Target announced the establishment of a multi-year Enterprise Acceleration Office. This new office will be overseen by chief operating officer Michael Fiddelke and aims to enhance speed and agility across the organisation by streamlining processes and leveraging technology and data more effectively.
"In the first quarter, our team navigated a highly challenging environment and focused on delivering the outstanding assortment, experience and value guests expect from Target," said Brian Cornell, chair and chief executive officer of Target Corporation.
“This morning, we announced the establishment of a multi-year acceleration office, led by Michael Fiddelke, along with several leadership changes. These steps forward are intended to build more speed and agility into how we operate, and position key capabilities to drive long-term profitable growth," Cornell added.
Highlights of Target’s Q1 results
While overall first quarter sales fell short of expectations, Target saw positive performance in key seasonal moments like Valentine's Day and Easter. Notably, the company's limited-time collaboration with kate spade was lauded as its most successful designer partnership in the past decade.
The first quarter also saw a significant boost to the company's bottom line due to a 593 million dollars pre-tax gain from the settlement of credit card interchange fee litigation. As a result, GAAP earnings per share rose to 2.27 dollars. However, excluding the litigation settlement gains, adjusted EPS stood at 1.30 dollars.
Comparable sales decreased by 3.8 percent, reflecting a 5.7 percent decline in comparable store sales partially offset by the 4.7 percent growth in comparable digital sales.
Looking ahead, Target has revised its full-year guidance for fiscal 2025, now expecting a low-single digit decline in sales and GAAP EPS of 8 dollars to 10 dollars and adjusted EPS, excluding the first-quarter litigation settlement gains, is projected to be approximately 7 dollars to 9 dollars.
The company continued its capital deployment efforts, paying 510 million dollars in dividends and repurchasing 251 million dollars of its shares during the first quarter.
Target announces leadership changes
Alongside the creation of the new office, Target also announced several changes to its executive leadership team to foster better alignment and collaboration.
Prat Vemana, chief information and product officer, will now report directly to Brian Cornell and will take on leadership of the Target in India global capability center. Jim Lee, chief financial officer, will assume leadership of Target's enterprise strategy and partnerships, while Rick Gomez, chief commercial officer, will oversee the enterprise insights team.
As part of these changes, Christina Hennington, chief strategy and growth officer, will depart Target and transition into a strategic advisor role through September 7, 2025.
The company also announced the departure of Amy Tu, chief legal and compliance officer, with Melissa Kremer, chief human resources officer, temporarily overseeing the function while an external search is conducted.