Target Just Reported Its 13th Consecutive Quarter of Falling Sales, But CEO Michael Fiddelke Says He Has a Plan to Turn Things Around. 2 Key Things For Investors to Know.

By Jeremy Bowman – Mar 3, 2026 at 3:57PM ESTKey PointsTarget stock rose on Tuesday, thanks to better-than-expected Q4 profits.Investors are hopeful that new CEO Michael Fiddelke can spark a turnaround.Target is investing more in non-merchandise revenue streams. Target (TGT +6.85%) shares rose today on its fourth-quarter earnings report, but don't be fooled. This was another stinker of a report. Comparable sales fell 2.5% and overall revenue was down 1.5% to $30.5 billion, which matched estimates. The company did make some improvements on the cost side, and gross margin rose from 26.2% to 26.6%, due to lower inventory shrink, lower supply chain and digital fulfillment costs. After adjustments, earnings per share rose from $2.41 to $2.44, beating the consensus at $2.16. Target stock has been on a surprising comeback in recent months, up roughly 50% as investors are hoping that new CEO Michael Fiddelke can turn the business around. Guidance was encouraging as comparable sales are expected to return to growth in 2026, with net sales up 2% on a small increase in comparable sales. It also called for adjusted EPS of $7.50-$8.50, which compared to $7.57 in 2025. Notably, February sales were up. Investors heard from Fiddelke for the first time in the Q4 earnings report. Here are two things to know about his turnaround plan. Image source: Target. 1. Target is leaning on non-merchandise sales Following in the footsteps of Walmart and Amazon, which have built significant businesses in advertising and memberships, Target is doing the same with its Roundel media network and Target Circle 360, its $99/year paid subscription service that offers unlimited free same-day delivery on orders over $35. In the fourth quarter, non-merchandise sales grew more than 25%, which included more than a double in membership revenue, double-digit growth in Roundel, and more than 30% growth in its e-commerce marketplace. In 2026, it expects non-merchandise sales to add more than one percentage point of growth, which is key because that represents high-margin revenue. ExpandNYSE: TGTTargetToday's Change(6.85%) $7.75Current Price$120.92Key Data PointsMarket Cap$51BDay's Range$115.00 - $122.4352wk Range$83.44 - $122.43Volume763KAvg Vol6.6MGross Margin25.36%Dividend Yield4.01% 2. Fiddelke is focused on Target's reputation Target has alienated both sides of the political spectrum in recent years, and the company seems to have made a mistake by getting too involved in the culture wars. At the same time, the company has arguably taken its eye off the ball with in-store operations. Fiddelke has committed to improving operations and getting its reputation back to being known for style, design, and value. Target said it would lay off 1,800 employees in October, and it's planning to invest more in store labor to improve issues like long checkout lines and out-of-stocks. As part of those efforts, Target plans to increase capital expenditures from $4 billion to $5 billion. If the company can make those nuts-and-bolts improvements, the retail stock is poised to keep climbing. It will take time, but the guidance shows the company is moving in the right direction.Read NextMar 3, 2026 •By Reuben Gregg BrewerCan Target's New CEO Send the Massive Retailer's Stock Soaring in 2026 (and Beyond?)Feb 20, 2026 •By Leo SunHere's Everything Investors Need to Know About Target's New CEO Michael FiddelkeFeb 16, 2026 •By Adria Cimino2 Dividend Stocks to Buy and Hold ForeverJan 26, 2026 •By Rick MunarrizWhere Will Target Stock Be in 3 Years?Jan 11, 2026 •By Lawrence Rothman, CFATop Stocks to Double Up on Right NowJan 9, 2026 •By Daniel FoelberDown 28% in 2025 With a 4.5% Yield, Is This High-Yield Dividend Stock Too Cheap to Ignore, and Worth Buying in 2026?About the AuthorJeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011.

Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.TMFHoboX@TMFBowmanStocks MentionedTargetNYSE: TGT$120.92(+6.85%)+$7.75*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.