Target Corp. named veteran Michael Fiddelke as its next chief executive officer, betting that the insider will rejuvenate sales and help the storied retailer regain its footing.
The company said Wednesday the board unanimously elected Fiddelke, who currently serves as chief operating officer, to be CEO starting in February. He will also join Target’s board, while current CEO Brian Cornell, who has led the big-box retailer since 2014, will transition to focus on his role as executive chair.
Target shares slumped as much as 11 percent in early trading on Wednesday, an indication that Wall Street had been hoping for an outsider to take over the company’s leadership.
Fiddelke, who started as an intern at Target in 2003, faces the immediate challenge of reversing an extended streak of weak performance and the loss of market share to competitors such as Walmart Inc. and Amazon.com Inc. His priorities include sharpening the company’s focus on merchandise style and design while improving the shopper experience and streamlining operations with technology.
“I’m stepping in with urgency to rebuild momentum and return to profitable growth,” Fiddelke, 49, said on a call with reporters. “I’ve seen us at our best and I’ve seen us when we are not at our best, and that informs my candid assessment of today where we have work to do.”
The company’s slump persisted in fiscal second quarter ended Aug. 2 with contractions in revenue and comparable-store sales, which measures results at locations open for more than 13 months. Both declines were less than the market expected, however, according to the average of estimates compiled by Bloomberg.
Fiddelke said recent efforts appear to be paying off. These include an initiative dubbed “Fun 101,” which seeks to capitalise on the latest trends for products including sporting goods and electronics.
While performance improved across all six of the company’s product categories in the quarter, executives said consumers remain selective in their spending. Target maintained its full-year guidance.
Fiddelke had been seen as a potential successor to Cornell along with Christina Hennington, who is leaving the company this year. Earlier this year, Fiddelke was also picked to lead a new initiative aiming to accelerate decision making.
Under Cornell, who joined Target from PepsiCo Inc. in 2014, Target’s shares gained 80 percent through Tuesday’s close. That lags the roughly 230 percent advance of the S&P 500 Index over the same period. The stock soared during the pandemic years, when consumers stocked up on discretionary goods instead of spending on travel and experiences, but it has steadily declined since 2021 as spending patterns normalised.
Fiddelke’s path to the top has touched nearly all of the company’s operations, with roles in finance, store operations and merchandising. Prior to his current role as COO, which he assumed in February 2024, he was CFO for five years. As COO, Fiddelke has overseen the running of Target’s nearly 2,000 stores as well as its global supply chain and enterprise operations.
Tariffs, DEI
New US tariffs under President Donald Trump have emerged as an obstacle to the company’s turnaround. Target is estimated to have more exposure to tariffs than peers such as Walmart due to its mix of products. Price increases related to the levies have started to materialize on some products. The impact on consumers is expected to become more pronounced later in the year as companies’ existing inventory is depleted.
Target is continuing to diversify its sourcing countries and work with suppliers to mitigate the tariffs, executives said in the recent call with reporters. Price increases will be a last resort, they said.
Earlier this year, Target also announced it was pulling back on diversity initiatives as conservatives challenged the programs’ legality following a Supreme Court decision to ban affirmative action in college admissions in 2023. While other companies have also curtailed their diversity programs, Target has been hit especially hard by consumer blowback since the company had made inclusivity a pillar of its corporate identity.
Learn more:
Target Explores Factory-Direct Shipping Model Used by Temu
The retailer is in early stages to broaden its range of low-cost offerings, which would primarily include apparel, household goods and other non-food items.
