Target Cuts Profit Forecast as Consumer Demand Softens

Target Corp. trimmed the upper end of its 2025 profit outlook on Wednesday, signaling that its recovery may take longer than expected as consumer spending remains cautious.

The big-box retailer now expects adjusted earnings per share (EPS) between $7 and $8, down from its prior high of $9. While its third-quarter earnings beat analyst expectations, same-store sales disappointed, reflecting persistent soft demand in discretionary categories.

Target’s leadership acknowledged the headwinds. Consumers, they say, are being selective — stretching their budgets on essentials like food and beauty, while cutting back on home décor and apparelTo adapt, the company has slashed prices on about 3,000 everyday items and leaned more aggressively into value

Looking ahead, Target is investing heavily to win back customers. The company plans to spend $5 billion next year — a 25% increase — to remodel stores, expand its network, and modernize operationsIn addition, Target is integrating technology more deeply into its business: it’s launching a ChatGPT-powered interface in its app and boosting its capabilities in same-day fulfillment

Incoming CEO Michael Fiddelke, who officially takes over in February, painted this as a tipping point. He emphasized a renewed focus on “stylish, relevant” products, a better in-store experience, and efficient use of technology.

Yet, the broader retail climate isn’t helping. Target noted that demand remains weak, particularly for non-essential goods.Its stock took a hit following the announcement, underlining how far the company still needs to go to rebuild investor confidence