Target sales fall sharply in 1st quarter and retailer warns they will slip for all of 2025

The logo for Target is displayed above a trading post on the floor of the New York Stock Exchange, Tuesday, May 20, 2025. Photo by Richard Drew /AP

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NEW YORK (AP) — Sales at Target fell more than expected in the first quarter and the retailer warned they will slip this year as consumers, worried over the impact of tariffs, pull back on spending.

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Sales fell 2.8% to $23.85 billion, which is less than the $24.23 billion Wall Street expected, according to FactSet, and down from the $24.53 billion the company reported during the same period last year.

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Target said Wednesday that it now expects a low-single digit decline in sales for 2025, and earnings per share, which excludes the gains from the litigation settlements in the first quarter, to be anywhere from $7 to $9.

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For the year, analysts expect earnings per share of $8.34 on sales of $106.7 billion.

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Comparable sales, those from established stores and online channels, fell 3.8%. That includes a 5.7% drop in store sales and a 4.7% increase in online sales. That reverses a comparable sales increase in the previous quarter of 1.5%.

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The number of transactions across online and physical stores fell 2.4%, and transaction amounts dropped 1.4%. Target told reporters on a conference call Tuesday that it couldn’t reliably estimate the individual impact of each of the factors that were hurting its business.

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Target said it’s setting up a new office to be led by Chief Operating Officer Michael Fiddelke would focus on making faster decisions to help accelerate sales growth. Current Chief Strategy and Growth Officer Christina Hennington will move into a strategic adviser role until department Target Sept. 7, the company said.

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Target is focusing on customers that are nervous about the economy and high prices, offering 10,000 new items starting at $1 _ with the majority under $20.

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“I want to be clear,” Target CEO Brian Cornell told reporters on a call Tuesday. “We’re not satisfied with these results, so we’re moving with urgency to navigate through this period of volatility … We’ve got to drive traffic back into our stores or visits to our site and make sure we’re building momentum.”

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Target appears to have a lot of work to do. Out of 35 merchandise categories including discretionary and essentials that the discounter tracks, it’s gaining or maintaining market share in only 15, the company said.

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Target’s report follows Walmart’s release of strong quarterly sales last week. The nation’s largest retailer warned that the sting of higher prices will hit shoppers in June and July when the back-to-school shopping season goes into high gear. Company executives said that car seats made in China that currently sell for $350 at Walmart will likely cost customers another $100, for example.

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Target didn’t offer specifics on tariffs’ impact on prices, but said that it was looking at different ways to absorb their cost.