Target CEO Brian Cornell is stepping down next year after over a decade at the helm as the embattled retailer undertakes a high-stakes turnaround effort aimed at reigniting growth and reversing sliding sales.
The Minneapolis-based company’s board of directors unanimously elected Michael Fiddelke, the company’s current chief operating officer, to succeed Cornell and become a member of its Board of Directors on Feb. 1, the company announced Wednesday.
The news comes as Cornell, 66, wraps up the three-year commitment he made in 2022 to remain CEO.
That year, Target’s board scrapped its mandatory retirement age of 65, allowing him to stay on during a pivotal period for the company as it worked to revive traffic and growth.
Over the past 20 years at Target, Fiddelke, 49 years old, has been credited with being instrumental in building many of the company’s core strengths, holding leadership roles across merchandising, finance, operations and human resources.
In his current position, Target said Fiddelke has overseen efforts that enabled exponential growth across the business, including investments to build and scale the company’s stores, supply chain, digital capabilities and team. He also spearheaded enterprise efforts to deliver more than $2 billion in efficiencies.
“It is clear that Michael is the right leader to return Target to growth, refocus and accelerate the company’s strategy, and reestablish Target’s position as a leader in the highly dynamic and fast-moving retail environment,” Christine Leahy, lead independent director of Target’s Board of Directors, said.
Leahy said Fiddelke’s tenure gives him unmatched enterprise insight and a foundation of strong team trust, noting that “what sets him apart is how he combines those strengths with a ‘fresh eyes’ mindset, challenging the status quo to evolve how the business operates, differentiates and delivers long-term value.”
In its latest fiscal quarter, the company reported $25.2 billion in sales, down just under 1% from a year ago.
The company blamed the dip on shoppers pulling back on merchandise, though that was partly balanced out by stronger non-merchandise sales, like services.
Sales at stores open at least a year fell nearly 2%, with in-store sales dropping more than 3%. Online sales, however, grew a little over 4%. Overall, profit for the quarter came in at $1.3 billion, which was down about 19% from last year.
The company had already warned earlier this year that there would be year-over-year profit pressure in its first quarter relative to the remainder of the year, due in part to tariff uncertainty.
To try to get back to long-term profitable growth, the company announced in May that it had developed a new multi-year growth initiative, called Enterprise Acceleration Office, and made changes to its executive suite.
The Enterprise Acceleration Office initiative will specifically help the company operate more nimbly, “creating conditions for speed, adaptability, innovation and resilience,” Cornell said.
Target is maintaining its expectation of a low-single digit decline in sales for fiscal 2025, down from its previous forecast of net sales growth of about 1%. It expects adjusted earnings per share to be approximately $7 to $9 for fiscal 2025, down from its prior expectation of $8.80 to $9.80.
Credit: Source link
