Target Prepares for Challenging Quarter as Sales Drop Amid U.S. Shutdown

NEW YORK, November 18, 2025 – Retail giant Target Corporation (TGT) is bracing for a tough third quarter as economic uncertainty and the prolonged U.S. government shutdown impact consumer spending. Analysts expect the retailer’s same-store sales to decline, highlighting operational challenges and growing competition from rivals like Walmart and Amazon.

Target has struggled to maintain its market share this year, with consumers prioritizing essentials and fast delivery offered by competitors. Persistent inventory mismanagement, understaffed stores, and a stalled e-commerce expansion have compounded these issues, putting additional pressure on the company’s performance.

Declining Sales and Revenue Forecast

Analysts estimate that comparable sales—covering both online channels and stores open for at least 13 months—fell by 2% in the three months through October, according to LSEG data. Overall revenue is projected to remain flat at $25.33 billion, while earnings per share (EPS) are expected to decline to $1.72.

Credit and debit card sales reportedly fell 2.8% during the quarter, slightly worse than the 2.6% drop in the previous quarter. This trend reflects reduced discretionary spending as federal pay and food-stamp benefits were delayed during the government shutdown. The Congressional Budget Office estimated the shutdown could cost the U.S. economy up to $14 billion, adding further strain on retailers ahead of the crucial holiday shopping season.

Incoming CEO Michael Fiddelke’s Turnaround Challenge

Target’s incoming CEO, Michael Fiddelke, currently the company’s COO, will officially take the helm in February 2026. Fiddelke faces the complex task of redefining Target’s market identity, deciding whether to position the brand as a low-budget retailer, a convenience store, or a direct competitor to Walmart and Amazon.

He has pledged to improve merchandising, enhance the guest experience both in-store and online, and invest in technology upgrades. Last month, Fiddelke initiated 1,800 corporate job cuts, Target’s first major layoffs in nearly a decade, citing too many layers in the organization that slowed decision-making.

Additionally, Target announced price reductions on 3,000 pantry and household items to remain competitive with rivals. Analysts at Jefferies suggest these measures could serve as an “underappreciated catalyst,” potentially narrowing price gaps, increasing store visits, and boosting sales of private-label products, which account for roughly one-third of Target’s revenue.

Market Reaction and Investor Concerns

Target shares have fallen 41% year-to-date, including a 16% drop since August following Fiddelke’s appointment. UBS analyst Michael Lasser notes that while comparable sales are likely to slightly miss expectations, the stock remains relatively low-priced, trading at 12 times forward earnings, compared with Walmart’s 35 times.

Investors like Charles Sizemore and Louis Navellier emphasize the importance of inventory management and restoring Target’s appeal to middle-class shoppers, many of whom have shifted grocery and essentials spending to Walmart.

Outlook

Target’s performance in the coming months will depend on the effectiveness of Fiddelke’s operational restructuring, pricing strategy, and investments in technology and e-commerce. With the holiday season approaching and economic uncertainty continuing, investors are watching closely to see whether the company can regain its market position and consumer trust.

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Key Takeaways

• Target expected to report flat revenue and declining EPS in Q3 2025.
• Comparable sales likely fell 2%, affected by U.S. government shutdown and consumer belt-tightening.
• Incoming CEO Michael Fiddelke plans corporate layoffs, price reductions, and tech investments.
• Inventory mismanagement and competition from Walmart and Amazon have hurt Target’s market share.
• Private-label products and enhanced store experiences are key components of the turnaround strategy.