Target released its fourth-quarter earnings report on March 4, which provided insight into the company’s performance in 2024 and its strengths and weaknesses going into 2025.
The company’s earnings per share were $2.41. Comparable sales increased by 1.5% and comparable digital sales increased by 8.7%. Yet, its revenue decreased by 3% from last year.
Target’s strong performance was mainly due to digital sales through the Target app and the positive consumer response to same-day shipping via Target Circle 360. This was especially evident in the fourth quarter during the holidays, when consumers are likely to spend more than usual and rely on fast delivery.
Despite Target’s positive fourth-quarter performance, its stock has been steadily decreasing since the start of the new year, which is believed to be because of uncertainty regarding tariffs.
“Confidence has taken a downturn in the recent weeks and I think there is some concern about tariffs,” Target CEO Brian Cornell stated in an interview with CNBC on March 4. “There’s several Americans right now that understand what a tariff is and what it might mean for them, so I think that cautious shopping behavior that we’ve seen for quite some time now continued in February.”
Cornell also stated that the company “will continue to make sure we lean in and do everything we can to control prices, provide that value, and continue to delight them with newness along the way.”
While Cornell acknowledged consumers’ tariff concerns, he expressed confidence in Target’s ability to adapt, presumably to ease fears of drastic price increases.
“We have to think about this from a consumer perspective and make sure that our pricing architecture makes sense and puts us in a place where we have affordable options,” Chief Commercial Officer Rick Gomez said in a conference call. He also said that consumers are expressing more confidence in spending.
“As we turn the corner now there has been talk about the tariffs and uncertainty with the economy, and while all those behaviors we have seen with the consumer are not changing, they are becoming pronounced,” Gomez said in a media call.
While Target is confident about consumer spending and maintains its prices, consumers will undoubtedly see produce prices increase like never before. Mexico’s 25% tariff will directly affect produce such as avocados.
Tariffs will continue to have new effects throughout the year, which can heavily impact all quarters, making predicting what 2025 holds for Target difficult.
As Target’s stock price decreases, the hope of increased consumer spending in the spring could ease the worry of its continuing decline.
Even with Target’s promising fourth-quarter report, Target could prepare to see a vast change in numbers from the first quarter of this new year.
