Target Q3 profits slide as holiday season approaches

MINNEAPOLIS (FOX 9) - Target’s third-quarter profits fell sharply as the Minnesota-based company is struggling to bring in shoppers ahead of the holiday season.

Target Q3 report

By the numbers:

In a third-quarter earnings report released on Wednesday, Target said its Q3 net sales were $25.3 billion compared with $25.6 billion in 2024. Net sales were 1.5% lower than in 2024, which reflect a merchandise sales decrease of 1.9%, partially offset by a 17.7% increase in non-merchandise sales.

Meanwhile, Target says its comparable sales were down 2.7% in Q3, which reflects a comparable stores sales decline of 3.8%, partially offset by comparable digital sales increase of 2.4%. Third-quarter operating income of $900 million was 18.9% lower than last year. Excluding non-recurring items, operating income was $1.1 billion. 

Investors have hit Target’s stock hard, sending it down 43% over the past year, with shares edging lower before the opening bell, according to The Associated Press.

What they're saying:

"We’re laying the foundation for a stronger, faster and more innovative Target. It’s grounded in our purpose of bringing joy to our guests and focused on growth," said Michael Fiddelke, incoming Chief Executive Officer of Target. "We know there’s work to do, and we have the best team in retail to do it. With clear priorities guiding us, I’m proud of our progress and confident we’re on the right path."

Looking at the remainder of the fiscal year 2025, Target says it's still expecting a "low single-digit decline of sales."

Target layoff and changes

What's new:

In an effort to increase sales, Target says it’s offering more than 20,000 new items, twice as many as last year, in addition to lowering prices on food, essentials and other household goods.  

Furthermore, Target has issued a new directive mandating that workers smile at customers as part of a plan to boost sales heading into the holidays. 

Dig deeper:

The changes come as Target eliminated approximately 1,800 corporate positions in Minneapolis and Brooklyn Park in October, representing about 8% of its corporate workforce. It was the first major layoff for the company in a decade.

The layoffs also came two months after the resignation of CEO Brian Cornell, who will be replaced by the company’s chief operating officer in 2026. Cornell cited ongoing struggles with declining sales and profits, a drop in stock price, and backlash over the company's decision to roll back its DEI initiatives as reasons for his resignation.