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2d ago

Target Faces Analyst Downgrades After Weak Q1 Results and Revised Guidance

The retailer reported a 2.8% sales decline, lowered EPS forecasts, and highlighted supply chain diversification as it navigates competitive pressures and inventory challenges.

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Overview

  • Target's Q1 2025 sales fell 2.8% year-over-year to $23.85 billion, missing analyst expectations of $24.32 billion.
  • The company reduced its full-year adjusted EPS guidance from $8.80–$9.80 to $7.00–$9.00, citing margin pressures and soft sales.
  • Target has cut reliance on Chinese imports from 60% in 2017 to 30% and aims to reduce it below 25% by the end of next year to mitigate tariff impacts.
  • Analysts expressed concerns about rising inventory, weak same-store sales, and competitive challenges from rivals like Walmart.
  • Management emphasized 36% year-over-year growth in same-day delivery, driven by the Target Circle 360 program, as part of its strategy to boost digital and loyalty growth.