First quarter net sales for retail giant Target dropped from US$24.5 billion in 2024 to $23.8 billion in 2025, leading the company to seek changes to return to growth.
Despite the overall drop, the company saw digital sales grow by 4.7%, reflecting more than 35% growth in same-day delivery powered by Target Circle 360. However, in-store sales dropped by 5.7% from the same last time last year.
While net income was down, operating income for Q1 2025 was up 13.6% to $1.5 billion.
Target also reported first quarter GAAP earnings per share (EPS) of $2.27, increasing from $2.03 from last year, while reporting adjusted EPS of $1.30, well below expectations of $1.56.
Target chair and CEO, Brian Cornell said the company was faced with navigating a highly challenging environment.
"While our sales fell short of our expectations, we saw several bright spots in the quarter, including healthy digital growth, led by a 36% increase in same-day delivery through Target Circle 360, and our strongest designer collaboration in more than a decade, Kate Spade for Target,” he said.
Cornell also said that while the sales reinforce the underlying health of the business, the retail giant plans to improve current performance and accelerate progress on its “roadmap to growth.
“We announced the establishment of a multi-year acceleration office, led by Michael Fiddelke, along with several leadership changes,” he said.
“These steps forward are intended to build more speed and agility into how we operate, and position key capabilities to drive long-term profitable growth.”
The drop in sales come as U.S. President Donald Trump’s tariffs hit hard on retail and after Target pulled back on some diversity, equity and inclusion programs, causing them to lose the trust of some shoppers.
Alongside the released earnings, Target announced Christina Hennington will be stepping down as Exectuive Vice President (EVP) and chief strategy and growth officer on 25 May and will serve as strategic adviser until 7 September. EVP and chief legal and compliance officer Amy Tu will also be stepping down.
At the time of writing, Target (NYSE: TGT) stock was trading at US$93.01, easing 5.2% from Tuesday's close of $98.12. Target's market cap stands at $42.26 billion.
