Lead: Target will release its fiscal third-quarter results before the market opens on Wednesday as the Minneapolis-based retailer prepares for the holiday rush, an impending CEO transition and efforts to halt a multiyear sales stagnation. Wall Street analysts surveyed by LSEG expect $1.72 in earnings per share and $25.32 billion in revenue. The report arrives as Target implements store and staffing changes, including a recent reduction of 1,800 corporate roles, and outlines full-year adjusted EPS guidance of roughly $7 to $9, compared with $8.86 last year.
Key takeaways
- Analysts (LSEG) expect Q3 EPS of $1.72 and revenue of $25.32 billion for Target.
- Target has faced roughly four years of flat sales and anticipates another low single-digit percentage sales decline for the year.
- Full-year adjusted earnings per share are guided to about $7–$9, versus $8.86 in the prior year.
- Michael Fiddelke, currently COO and former CFO, is set to become CEO in February; he identified three priorities when announced in August.
- Target recently cut 1,800 corporate jobs — its largest layoff in a decade — and is reworking merchandising and online fulfillment.
- Store-level initiatives include the “10-4” customer engagement program to increase staff-customer interactions during the holiday season.
- Walmart is also changing leadership: John Furner will become CEO of Walmart on Feb. 1, the same day Fiddelke takes over at Target.
Background
Target, founded in Minneapolis and known for its distinctive merchandise and in-store presentation, has seen its comparable sales progress stall over the past four years amid intensifying competition from discounters, e-commerce platforms and changing consumer behavior. The chain’s differentiators — curated fashion assortments, tidy stores and high-touch service — have eroded in some markets, contributing to weaker traffic and conversion metrics. In addition, Target acknowledged that reduced enthusiasm from some customer segments followed changes to its diversity, equity and inclusion programs; the company cited that dynamic as a partial factor in earlier soft results.
Management responded with a mix of cost and merchandising initiatives. Earlier this year Target announced corporate headcount reductions and said it would refocus buying teams on distinct, trend-led items while refining inventory allocation. The company has also adjusted store fulfillment tactics to free frontline hours for stocking and customer help, and dispatched design teams to nontraditional inspiration sources — such as rodeos and ski lodges — to regain a sharper fashion sensibility.
Main event
Investors will parse the Q3 print for signs the turnaround plan is gaining traction: same-store sales trends, gross margin direction and any commentary about inventory digestion ahead of the holiday quarter. Analysts will also watch comps by channel (stores vs. digital) and margin drivers such as freight, promotions and sourcing costs. Management’s tone on promotions and inventory — whether they expect favorable or pressured gross margins into Q4 — will be a key market mover.
Michael Fiddelke, named Target’s next CEO in August, outlined three priorities at the time of his appointment: restoring Target’s reputation for distinctive, stylish merchandise; delivering a more consistent customer experience in stores and online; and applying technology to improve operational efficiency. He signaled he would begin implementing changes before formally taking the CEO role, and the recent store and personnel moves are the first visible examples of that approach.
On the operational front, Target has rolled out the “10-4” engagement program for the holiday season, asking employees to acknowledge customers within 10 feet and initiate conversation within 4 feet, designed to boost perceived service levels. The company also pared back corporate staff by 1,800 roles last month to reduce overhead and redeploy resources to store-level execution and merchandising initiatives.
Analysis & implications
Short term, markets will judge Target by its Q3 comparable-sales trajectory and how commentary frames the holiday outlook. A better-than-expected comp or evidence of inventory normalization could reduce concern about markdown pressure; conversely, another quarter of soft sales would likely amplify calls for sharper cost cuts or strategic pivots. The LSEG consensus numbers set a baseline, but leadership commentary and segment-level details typically move the stock more than headline EPS.
Medium-term implications hinge on whether the merchandising refresh reclaims lost shoppers and whether in-store service improvements translate to higher basket sizes and frequency. Restoring a distinctive product assortment is a cultural and organizational challenge that depends on stronger vendor partnerships, sharper buying decisions and effective allocation to stores that support fashion-led assortments.
Operational changes — including the updated fulfillment model and corporate reductions — aim to shift labor hours back to the sales floor and reduce structural costs. If these shifts meaningfully improve labor productivity and on-shelf availability, Target can improve conversion without an immediate increase in traffic. However, execution risk is high: scheduling, training and measuring service improvements across thousands of stores will take quarters, not weeks.
Finally, the simultaneous leadership transitions at Target and Walmart raise governance and competitive dynamics questions. Two major big-box players entering new CEO tenures at the same time could lead to differentiated strategic responses during the 2026 planning cycle, affecting pricing strategies, private-brand investments and omnichannel execution across the sector.
Comparison & data
| Metric | Consensus / Guidance | Most Recent Comparable |
|---|---|---|
| Q3 EPS (expected) | $1.72 | — |
| Q3 Revenue (expected) | $25.32 billion | — |
| Full-year adjusted EPS (guidance) | $7.00–$9.00 | FY prior year: $8.86 |
| Corporate reductions | 1,800 jobs | largest in a decade |
The table summarizes the numbers investors will focus on in the release: the LSEG consensus for Q3 and the company’s full-year adjusted EPS guidance compared with last year’s adjusted result of $8.86. Because Target’s sales have been roughly flat for several years, analysts place extra weight on margin commentary and execution details rather than on single-period sales beats.
Reactions & quotes
Market observers and company leaders have framed the quarter as an early test of Fiddelke’s plan to re-energize the brand. Below are representative statements and context.
“I won’t wait to make changes,” — a succinct encapsulation of the incoming CEO’s pledge to act before formally assuming the top job.
Michael Fiddelke (company announcement)
Fiddelke’s pledge was delivered when the company announced his appointment; investors saw it as a signal that cuts and merchandising shifts would follow quickly rather than after a long transition period.
“We’re refocusing teams on distinctive merchandise and booking in-store time for associates,” — management on operational adjustments and merchandising priorities.
Target executive commentary
This comment frames recent initiatives — the fulfillment tweaks and the 10-4 program — as parts of a cohesive plan to improve customer experience and free labor for selling activities.
“Leadership turnover at two major U.S. retailers adds a new dynamic to competitive positioning next year,” — analysts on sector-level leadership changes.
Sell-side analyst note
Analysts caution that CEO transitions at both Target and Walmart could reshape strategic choices across pricing, assortment and digital investment over the next 12–18 months.
Unconfirmed
- Whether the 10-4 customer engagement program will materially boost holiday conversion is not yet proven by available data.
- Claims that designer field trips (e.g., to rodeos or ski lodges) will directly translate into stronger sales have not been independently validated.
- The magnitude of margin relief expected from the 1,800-job reduction has not been detailed publicly and remains to be quantified in future filings.
Bottom line
Target’s Q3 report will be judged less on a single headline and more on detail: comps by channel, gross-margin trajectory and evidence that recent merchandising and labor moves are improving in-store execution. Consensus EPS ($1.72) and revenue ($25.32 billion) provide a baseline, but market reaction will hinge on whether management convinces investors that a sustainable turnaround is underway.
For shoppers and sector watchers, the critical questions are whether Target can restore product differentiation and deliver a consistently better store experience, and whether operational changes free enough frontline time to improve conversion. The coming quarters — not one print — will determine if the strategy produces measurable recovery.