underperformed over the holiday quarter,” said ​​Neil Saunders, analyst and managing director at GlobalData. “While not unexpected, this continues a long-established pattern: in a tough trading environment, Target is struggling to show up for customers in a consistent and compelling way. This is eroding sales.”  Michael Fiddelke, who officially stepped into the role of CEO on February 1, succeeding Brian Cornel, explained that 2025 was a year of cleanup and that 2026 would be centred on positioning the company for profitable growth.  “Our team is firmly focused on writing Target’s next chapter of growth, rooted in strengthening our merchandising authority, delivering an elevated and differentiated shopping experience, advancing our use of technology and continuing to serve and invest in our team and communities,” said Fiddelke.  “Target saw a healthy, positive sales increase in February, serving as an important milestone on our path back to growth this year and reinforcing my confidence in the momentum we’re building and the future we’re creating together.” Saunders noted that while Fiddelke’s attitude is encouraging, hope will need to be translated into more optimal execution.  “It won’t be plain sailing, as issues like investment at a time of compressed profit need to be resolved. But there is more positive guidance (sales growth in 2026), and if the company can build on this by fixing the issues, it can win back share.” The factors that led to Target’s poor Q4 results As CI&T’s global director of retail strategy, Melissa Minkow, told Inside Retail, “I’m not at all surprised to see Target’s Q4 results, and I don’t think anyone was really.” Target has struggled with inventory management, resulting in both stockouts and an inability to stay on-trend. Furthermore, while the brand was previously known for its “delightful” brick-and-mortar experience, that’s not been the case for several years now.  Minkow pointed to Target’s competitors, like Walmart and Amazon, that have invested heavily in technology in recent years, enabling them to deliver and grow in all the ways Target currently needs to. Walmart has specifically focused on its supply chain, leveraging AI and automation to maintain its low prices and quickly get shoppers what they need.  For as many challenges as lie ahead in the company’s journey, Minkow argued that a turnaround for Target isn’t completely out of the picture. “We know turnarounds happen in retail,” she said.   “We’ve seen it with Macy’s, Gap, Abercrombie, and others. I’m happy to hear Fiddelke use the term’ merchandising authority’, as that is how the aforementioned brands turned things around: by offering the products consumers actually wanted to buy. However, I would like to see specifics around the role technology will play in this because ‘merchandising authority’ doesn’t just happen, and its top two competitors are very aware of that.” Where does Target go from here? Alicia Esposito, director of content and insights at research platform Future Commerce, outlined the steps Target will need to take to help bring the retailer back to its heyday. “One of Target’s enduring strengths remains its omnichannel infrastructure,” she said. “During the pandemic, the retailer emerged as a leader in services like drive-up, same-day delivery and in-store pickup, capabilities that helped it capture significant digital demand while still leveraging its store footprint. This remains an area of strategic advantage and is communicated as such by leadership.” However, those capabilities alone don’t restore growth, Esposito noted.  The areas where the company has struggled the most and is currently trying to rehabilitate are extremely visible: merchandise assortment and the in-store experience. For Target to get its image back on track, it will need to focus on these two prominent pain points. Area 1: Assortment has lost its point of view  “In recent years, Target’s product assortment has occasionally felt like it was going through an identity crisis,” said Esposito.  “The company has continued to launch collaborations and expand private-label offerings, but the designs and collections have not always had the same cultural impact they once did, particularly among younger shoppers.”  She pointed to a moment where Target showed that it could still tap into the cultural zeitgeist, such as with the viral ‘Dump Him’ sweater released around Valentine’s Day. “The product resonated on social media and generated the kind of organic conversation that Target has historically been very good at creating. Target still shows glimmers of cultural relevance, but those moments feel sporadic rather than part of a consistent merchandising strategy. Cara Sylvester, Target’s executive vice president and chief merchandising officer, has her job cut out for her as she tries to build up Target’s product POV again.” Area 2: In-store execution is inconsistent at best.  Another area Target needs to dig into and improve this year is its in-person shopping experience.  “Even if Target improves its assortment, the company still faces a more fundamental challenge: the execution of the in-store experience,” said Esposito.  Target’s omnichannel strategy is designed in part to bring customers into physical locations through services like drive-up and order pickup, creating opportunities for additional discovery and impulse purchases.  However, explained Esposito, that opportunity disappears quickly if the store environment fails to deliver. Many customers still encounter issues while shopping in-store at Target, such as cluttered aisles, incomplete displays, inconsistent signage or shelves that have not been fully restocked. “Omnichannel works best when the store experience reinforces it. When the physical environment feels disorganised or overwhelming, that advantage disappears,” warned Esposito. “When brands do all of the legwork to get the right products, at the right prices, subpar in-store execution is almost like death by a thousand paper cuts. Every time a customer experiences the brand, and they fail to have an easy and joyful experience, that means execution has failed.”  Despite Esposito’s tough take on Target, Retail Strategy Group’s Liza Amlani had a fairly optimistic view on the company’s shot at a comeback.  “Target can absolutely be revived, but it will not be engineered through financial levers alone,” stated Amlani.  She explained that Target’s biggest unlock lies in merchandising. The brand will need to focus on setting a sharper point of view, clearer category direction and an edited assortment that feels intentional and new.  “Q4 still showed soft comps, so the priority now is giving customers a reason to come in more often and buy more when they do.” In the meantime, Amlani is encouraged by Target’s more recent investments in merchandising, such as its expert-driven beauty assortment and design leadership, as these are the right moves to rebuild relevance.  Moving forward, Target’s focus should be to reduce duplication, improve SKU productivity, and bring back delight and discovery across areas that will ensure repeat visits, especially in apparel and home, while continuing to build credibility in beauty.  Aligning relevant third-party brands with great-fitting apparel, investing in material innovation, and leveraging outfitting strategies will also help Target bring shoppers through the door. “This will take time. The signal to watch over the next few quarters is not just margin improvement,” concluded Amlani. “It is whether the assortment feels more curated and cohesive and whether that translates into traffic and conversion.” Further reading: ‘Miserable performance’: Target faces twofold problem as sales, profit shrink