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Target shares dropped more than 10 per cent after the retail group picked an insider to succeed veteran chief executive Brian Cornell to engineer a turnaround after years of disappointing sales.
Michael Fiddelke, Target’s chief operating officer, will replace Cornell in February 2026, the company said. The 49-year-old has worked at Target for 20 years, starting as a finance intern.
“I’m stepping in with urgency to rebuild momentum and return to profitable growth,” Fiddelke told reporters, adding that he wanted the business to have “swagger”.
But some analysts questioned whether Fiddelke was the right person to reinvigorate the business.
“We expect a smooth leadership transition, although we are unsure of how Mr Fiddelke will change the strategy he helped create,” said Joe Feldman, an analyst at Telsey Advisory Group.
Once a magnet to customers for its affordable style, Target has lost some of its draw in recent years.
Comparable sales declined 1.9 per cent year-on-year in the second quarter, the company said on Wednesday, the latest in a string of weak sales figures over the past two years. Target shares are down 22 per cent this year.
The incoming CEO has held jobs at the retailer in merchandising, human resources and as chief financial officer. He was named chief operating officer last year, and in the spring created and took charge of an “Enterprise Acceleration Office” aimed at cutting red tape.
The announcement of Fiddelke’s appointment came as Target reported second-quarter net sales of $25.2bn, down 0.9 per cent year on year but higher than estimates compiled by Visible Alpha. Net profit of $935mn was down 22 per cent year on year and in line with estimates.
Shares in the Minneapolis-based company fell 10.4 per cent as markets opened on Wednesday.
Fiddelke said that as CEO he would pursue a three-part agenda for turning the business around: sharpening its product design acumen, improving shoppers’ experiences and accelerating technology investments.
Cornell, 66, became chair and CEO of Target in 2014. In 2022, he committed to remain for another three years as Target’s board dropped a requirement for chief executives to retire by 65.
A former executive at groups including PepsiCo and Walmart, Cornell had been praised for sustaining growth and building Target’s digital platform in the face of competition from ecommerce. Target’s sales soared during the pandemic as consumers flocked to its stores to buy their necessities in a single location.
But after revenue peaked at $109bn in 2022, same-store sales have since disappointed investors. Competitors such as Amazon, Costco and Walmart have gained share of the discount shoppers’ dollar, in some cases with stylish products of their own.
Target also made costly inventory miscalculations and became enmeshed in culture wars over its displays and diversity policies.
With inflation diminishing households’ disposable income, consumer belt-tightening has disproportionately hit Target, whose inventory skews towards more discretionary merchandise rather than groceries. Target is also now managing the costs of new US tariffs on imported products.
Cornell, who will become executive chair, said the board picked Fiddelke unanimously after reviewing internal and external candidates over multiple years.
Christine Leahy, Target’s lead independent director, said in a statement that Fiddelke’s tenure “gives him unmatched enterprise insight and a base of strong team trust. But what sets him apart is how he combines those strengths with a ‘fresh eyes’ mindset, challenging the status quo to evolve how the business operates, differentiates and delivers long-term value”.
Asked how Target would differentiate itself as a home of accessible style in an era of tougher competition, Fiddelke responded: “The word that comes to mind for me is ‘swagger’.”
“When we’re leading with swagger in our merchandising authority, when we have swagger in our marketing and we’re setting the trend for retail — those are some of the moments I think that Target has been at its highest in my 20 years.”
