Target CEO Brian Cornell will step down on Feb. 1 and become executive chair of the board, handing the reins to Chief Operating Officer Michael Fiddelke, a 20-year company veteran credited with overhauling Target’s supply network and tightening costs. The succession plan was announced as Target posted another sluggish quarter, sending shares down more than 10% in pre-market trading. Minneapolis-based Target said the board’s decision follows years of vetting internal and external candidates to steer the retailer through a tougher post-pandemic landscape.
Cornell, 66, who took the helm in August 2014, framed the transition as a handoff to a leader deeply steeped in the business. “Mike was the right candidate to lead our business back to growth,” he told reporters, noting he has long relied on Fiddelke’s “strategic insights and sound judgment.” Fiddelke said he is approaching the role with “urgency” to reclaim Target’s merchandising authority: “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.” In May, he was tapped to lead a new office designed to speed decision-making and accelerate sales growth.
The latest results underscore the challenge awaiting the incoming CEO. For the quarter ended Aug. 2, net income fell 21%, overall sales slipped slightly, and comparable sales dropped 1.9%, marking flat or negative comps in eight of the last 10 quarters. Of the 35 merchandise categories Target tracks, it gained or held market share in only 14, Fiddelke said. The company operates about 1,980 U.S. stores.
Beyond the numbers, Target is contending with political and competitive crosswinds. It has been a focal point of consumer boycotts since late January after joining Walmart and other brands in scaling back corporate diversity, equity, and inclusion initiatives. At the same time, price-sensitive shoppers have gravitated to Walmart and off-price chains such as TJ Maxx. Many analysts say Target has stumbled by diluting the “Tarzhay” proposition—affordable style and a bit of fun—losing ground on trend-right merchandise that once distinguished it from rivals.
Inflation has also reshaped who is shopping where. Walmart has picked up market share among households earning more than $100,000, while Target’s customer growth has skewed toward lower-income shoppers, according to Consumer Edge. “It’s probably not the best sign, especially because higher-income consumers continue to hold up a little bit better during times of economic uncertainty,” said Michael Gunther, the firm’s head of insights. That mix shift matters for a retailer that historically counted on style-led basket builds from more affluent trips.
Target has tightened other levers as well. It recently ended a longstanding policy that let customers price match against outside competitors like Amazon or Walmart; shoppers can now only match a Target store price to Target’s own online price. In March, executives told investors they would rebuild the company’s reputation for stylish value by expanding owned brands and shortening the path from concept to shelf so assortments track trends in real time. Cornell pitched the goal plainly: guests are looking for “Tarzhay”—making the everyday feel a little elevated and unexpectedly fun.
Cornell’s decade-long tenure began in crisis, after a massive data breach tarnished the brand and dented profits. He pushed a turnaround anchored in private labels—now 40 brands strong—and a “stores-as-hubs” logistics model to speed same-day fulfillment while lowering costs. The 2017 acquisition of Shipt deepened those capabilities. The strategy paid off during the pandemic, when at-home spending on apparel basics, furnishings, and kitchen goods surged. But as inflation rose and demand normalized in 2022, profits dropped 52% in the first quarter versus a year earlier, saddling Target with excess inventory that took quarters to clear. By July 2023, comparable sales fell for the first time in six years. Fiddelke has since argued that Target over-indexed on home basics at the expense of trend-forward items, dulling its style authority. A customer backlash over the 2023 Pride assortment further weighed on traffic.
The company is also tightening its internal rhythm. Earlier this summer, Target told commercial unit employees to return to the office at least three days a week starting in September, a move executives say will speed collaboration and decision-making. That aligns with Fiddelke’s mandate to shorten cycle times, refresh owned brands faster, and put more marketing muscle behind Target’s distinct value-plus-style positioning.
What comes next will hinge on whether Fiddelke can reignite Target’s merchandising “swagger” quickly enough to lift traffic and restore comps, particularly among higher-income households now drifting to Walmart. Near-term investor focus will be on holiday assortments, the pace of private-label refreshes, and signs that the new decision office is compressing the journey from idea to shelf. With Cornell remaining as executive chair, the board is signaling continuity of strategy even as it gives a homegrown operator room to reset execution. Target is betting that moving faster—and looking more like “Tarzhay” again—can turn a slow patch into a sustainable recovery.
