The numbers
12: Consecutive quarters of flat or falling sales for Target. Bright spots included its food and beverage offerings, as well as toys, electronics, and sporting goods.
$25.3 billion: : Target’s Q3 net sales, down 1.5% year over year.
$241 million: How much Target made from advertising services in Q3, primarily representing revenue from its ad business Roundel. Total non-merchandise sales grew by 17.7%.
19.3%: The portion of Target sales that happen online rather than in stores. Comparable digital sales grew by 2.4% year over year.
35%: Increase in same-day delivery from the prior year.
The watercooler talk
Target executives pointed to macroeconomic concerns and cautious consumer spending as the main, ongoing challenges to its business. In 2026, Target promises to spend $5 billion on capital expenditures, up from around $4 billion this year.
“On a net sales basis, the quarter started with a relatively flat August. We saw a decline in September, and then October was about flat,” said Michael Fiddelke, current chief operating officer, who’ll take over as CEO on Feb. 1. “We saw more volatility by month in Q3 than we would have expected.”
Sprinkled throughout the earnings call, Fiddelke and other execs repeatedly aimed to reassure investors, saying leadership is neither satisfied or waiting for improvement in macroeconomic conditions before making changes to the business. These changes include new store formats, lower prices on essentials, exclusive merchandise, and a new AI-powered shopping assistant.
Target also announced a partnership with OpenAI launching next week in beta. The deal brings Target’s app directly into the chatbot, allowing shoppers to build a multi-product basket and checkout within ChatGPT.
