Target to spend $5B on store revamp as months-long sales slump deepens

Core Insights - Target plans to invest $5 billion in stores next year to regain customer trust after reporting its 12th consecutive month of weak or declining sales [1][3] - Same-store sales decreased by 2.7% for the three months ending November 1, with foot traffic down 2.2% and average transaction values falling by 0.5% compared to the previous year [1][4] Financial Performance - Target's net sales fell by 1.5% year-over-year to $25.3 billion, while net income dropped 19% to $689 million [6] - The company adjusted its full-year profit forecast to between $7 and $8 per share, down from a previous range of $7 to $9 [5] Strategic Initiatives - An additional $1 billion will be allocated to enhance the store experience, marking a 25% increase in capital expenditures for the year [4] - Target is addressing customer complaints by improving store conditions, including stocking shelves and providing better customer service [8][10] Market Position and Competition - Target faces challenges from competitors like Walmart and fast-fashion brands such as Shein and Temu, which offer lower prices [4] - The company has implemented price reductions on 3,000 everyday items and introduced 20,000 new holiday products, more than double last year's offerings [10][11] Consumer Behavior - Economic uncertainty and inflation fears have led consumers to reduce spending, particularly on discretionary items [4] - Target anticipates that customers will prioritize essential gifts over decorative items during the holiday season [12][14] Leadership Changes - Michael Fiddelke, currently the Chief Operating Officer, will become CEO on February 1, succeeding Brian Cornell [10][14]