Home / Business and Economy / Target Bets Big on $1B Facelift Amid Sales Slump
Target Bets Big on $1B Facelift Amid Sales Slump
19 Nov
Summary
- Target is investing $1 billion to remodel stores and refresh merchandise.
- Comparable sales declined 2.7% last quarter, missing analyst expectations.
- Incoming CEO aims for rapid return to growth despite economic pressures.
Target is committing an additional billion dollars to enhance its store fleet, aiming to reignite growth after a challenging period. The Minneapolis-based retailer reported its tenth quarter of negative or flat comparable sales in the last twelve, and anticipates a further decline in the crucial fourth quarter. Incoming CEO Michael Fiddelke has stated that the company is far from satisfied with its current performance.
The retailer's third-quarter comparable sales fell by 2.7%, falling short of analyst predictions, although earnings per share exceeded expectations. Fiddelke cited a significant drop in September as a primary reason for the shortfall. To address these issues, Target plans to increase annual capital expenditures from $4 billion to $5 billion, focusing on store renovations, merchandise assortment, and floor plan changes.
Looking ahead to the holidays, Target anticipates consumers will prioritize essential gifts over decorations. Economic pressures such as inflation and layoffs continue to impact shopper spending, causing Target to lag behind competitors like Walmart and Costco. The company is also rolling out an app integration with ChatGPT in beta next week, aiming to enhance the shopping experience through AI-powered features.
