Target (TGT) Stock Jumps as New CEO Cuts Prices on 3,000 Items in His First Major Move

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TLDR

  • New CEO Michael Fiddelke is slashing prices by 5%–20% on over 3,000 products, covering apparel, home goods, baby essentials, and food.
  • Target’s 2025 full-year net sales fell 1.7% to $104.8 billion, with revenues declining for five straight quarters.
  • Fiddelke has revealed a $6 billion 2026 budget, including $5 billion in capital expenditures—33% more than last year.
  • The new strategy targets “busy families” and includes an inventory revamp, store renovations, faster delivery, and expanded AI use across ~2,000 stores.
  • Analysts say price cuts alone won’t be enough, and the broader turnaround will take time to show results.

Target’s new CEO isn’t wasting any time. Michael Fiddelke, who took over last month, announced this week that Target will cut prices on more than 3,000 products—his first major move since stepping into the top role. The reductions range from 5% to 20% and cover apparel, home goods, baby items, and pantry staples. The cuts are set to take effect at registers later this month.

Target Corporation, TGT
TGT Stock Card

This is a familiar tactic. Former CEO Brian Cornell used price cuts repeatedly during his tenure, including a 2024 round covering 5,000 items. That move briefly returned Target to same-store sales growth, but the boost didn’t last. Analysts are watching closely to see if this time is different.

CFRA analyst Arun Sundaram said the cuts are “a step in the right direction,” but added they alone won’t bring customers back. “The winning playbook goes beyond just lowering prices,” he noted.

The backdrop is tough. Target’s revenues have fallen for five straight quarters. 2025 full-year net sales came in at $104.8 billion, down 1.7%. Operating income has dropped for three consecutive periods. Meanwhile, Walmart and Costco have delivered total returns of more than 200% over five years—a period in which Target’s total returns have shrunk more than 20%.

A $6 Billion Bet on a Turnaround

Fiddelke isn’t just cutting prices. At his first investor day on March 3, he laid out a plan backed by $6 billion in total 2026 spending. That includes $5 billion in capital expenditures, roughly a third more than last year.

He’s earmarked $1 billion to restock products faster and remodel stores, over $1 billion for groceries, and $1 billion in additional operating expenses. He also wants to increase AI use across Target’s roughly 2,000 locations.

Investors responded positively when the plan was unveiled—TGT stock rose 6% that day.

Fiddelke said sales will grow in every quarter this year and projected a 4.8% adjusted operating income margin for 2026, up 20 basis points from last year.

Winning Back the “Busy Family”

The new strategy has a clear target customer: what Fiddelke calls the “busy family.” Chief Merchandising Officer Cara Sylvester said the discounted items are products this group actually uses—spring apparel, bedding, shoes, baby gear, and everyday essentials.

Target also plans to double down on private-label brands and trusted national names like Bugaboo and Doona. The goal is a more curated, style-meets-value shopping experience.

Michael Ashley Schulman of Cerity Partners described the pace as “aggressive but realistic,” provided store execution and supply chain hold up. “Retail turnarounds rarely get a second shot,” he said.

Jay Woods of Freedom Capital Markets added that any benefits from the back-to-basics strategy will be gradual.

Target’s 2026 adjusted operating income margin forecast of 4.8% compares to Walmart’s expected margin of up to 4.4% for the same period.