While it’s still early in its turnaround efforts, Target has begun shifting the narrative away from its recent controversies and back toward its actual stores.
That’s evident from the headlines on recent major stories covering its second-quarter earnings.
“A new look and fresh merch are winning customers back at Target as sales rebound,” reported the Associated Press.
Reuters took a similar, business-first approach. “Target lifts annual forecasts again as Fiddelke’s turnaround takes root,” the news agency shared.
That’s a change from the narrative that surrounded the chain’s recent struggles.
Target has recovered from more than a year of weak comparable sales. It started off 2025 with a 3.8% decline, but recorded a 5.6% jump in the first quarter of this year. The second-quarter gain followed a 1.9% drop during the same three months last year.
Chief Merchandising Officer Cara Sylvester, while happy with the progress, made it clear that the chain still has one major hurdle to clear.
Target admits a merchandise problem
Sylvester was candid that some areas take longer than others to fix.
“In some categories, we’re pleased with our progress, and we’re seeing meaningful momentum. In others, including home and apparel, our performance is not where it needs to be, and the work will continue into 2027 and beyond,” she said during the second-quarter earnings call.
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CEO Michael Fiddelke made it clear that while he sees the problem, he also believes Target has taken the steps to address it.
“Those are longer lead time businesses, and so change doesn’t come as quickly there as it might in a category like Food & Beverage. As we embarked on the year, we said home would be a multiyear journey,” he said.
The changes, he noted, have already begun.
“It will take some time. And where we’re making the beginnings of change, we’re seeing the green shoots of a good guest response,” he added.
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Analysts see Target moving in the right direction
“While management highlighted positive guest response where changes have been made, Home and Apparel, two important high-margin categories, remain works in progress, and management was clear that both categories will require additional work extending into 2027 and beyond,” TD Cowen analysts said in a note shared with Retail Dive.
Roth’s Managing Director and Senior Research Analyst Bill Kirk said in a note that Home and Apparel, which both saw slower growth than in the same quarter last year, are key because they’re “ironically the two areas that once differentiated Target’s assortment,” added Retail Dive.
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RTM Nexus CEO Dominick Miserandino thinks Fiddelke and Target have made good progress when it comes to the chain’s turnaround.
“Target spent two years getting dragged over culture-war noise. They flipped the script by dropping the fluff and focusing on why people actually walk into their stores every week: groceries and essentials,” he told TheStreet.
The chain, he noted, has improved in many areas.
“Foot traffic is back, food sales are up, and same-day fulfillment is carrying the load. They stopped trying to be a fancy department store alternative and started acting like a reliable everyday hub,” he added.
A quick look at Target’s second-quarter results
Target pushed the idea that it has made changes to the core of its store as part of a plan to focus on meeting customers’ daily needs, it shared in a press release.
“We transformed nearly half of our center-store grocery experience, adding more space for fresh, snacks, bakery and emerging categories. Post-transition, snack sales were up 15% year-over-year,” according to Target.
- Net sales in all six core merchandising categories grew versus a year ago, with double-digit growth in Fun101 and high single-digit growth in Food & Beverage and Beauty.
- Store comp sales were up 2.7%, and digital comp sales grew 8.7%, driven by more than 25% growth in same-day delivery.
- Non-merchandise sales grew more than 20%, reflecting continued strength in Roundel, Target Circle 360, and Target Plus.
Toys, which the chain calls “Fun101,” were a major driver for Target.
“Within Fun101, Lego, plush, and Heyday electronics led the way with double-digit comps. At the end of Q2, we completely reinvented the shopping experience to cement our position as a destination for busy families in key areas like toys, gadgets, and pop culture,” the chain added.
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