Target(US:TGT) ZACKSยท2025-07-01 16:06Core Insights - Target Corporation (TGT) has seen a significant decline in its stock price, dropping 28.1% over the past six months, underperforming the Zacks Retail - Discount Stores industry's growth of 3.2% [1][3] - The company has lowered its fiscal 2025 guidance due to softer consumer demand, lower spending per visit, and declining store traffic [3][9] - Target's adjusted earnings per share (EPS) for the fiscal first quarter fell to $1.30 from $2.03 year-over-year, with total sales decreasing by 2.8% to $23.85 billion [13][14] Performance Overview - TGT's stock is currently trading at $98.65, which is 41.1% below its 52-week high of $167.40 [7] - The stock is trading below its 100 and 200-day simple moving averages, indicating bearish sentiment [7] - Comparable store sales fell by 5.7%, and overall traffic declined by 2.4% in the fiscal first quarter [9][17] Margin and Cost Pressures - Gross margin decreased by 60 basis points to 28.2% due to increased markdown activity and rising costs associated with digital fulfillment and supply-chain operations [18] - Operational costs have risen sharply, impacting adjusted EPS by approximately 50 cents year-over-year [19][20] Peer Comparison - Target has underperformed its peers, with Dollar General, Dollar Tree, and Costco experiencing stock price increases of 51.2%, 29.5%, and 8.8%, respectively [4][15] - TGT's forward 12-month price-to-earnings (P/E) ratio is 12.75, significantly lower than the industry's average of 32.30 [10][15] Strategic Initiatives - Target is focusing on expanding its e-commerce capabilities and enhancing customer loyalty through its membership program, Target Circle 360 [23][25] - The company aims to increase its third-party marketplace, Target Plus, targeting $5 billion in Gross Merchandise Value (GMV) by 2030 [24] - Target is diversifying its sourcing strategy, reducing dependency on China from 60% in 2017 to under 30% in the fiscal first quarter, with a goal of below 25% by 2026 [27][28]