Target is heading into the holiday season in a much more favorable position than last fiscal year.
In 2025, the mass retailer entered Q4 with a string of consecutive quarterly sales declines. In the third quarter that year, the company’s net sales dropped 1.5% year over year and comps decreased 2.7%.
The holiday period results weren’t much better, with Target’s Q4 net sales falling 1.5% and comps declining 3.9%.
“Last year, Target entered the holidays in a weak position,” GlobalData Managing Director Neil Saunders told Retail Dive via email. “It was struggling to keep its stores in order, it had challenges with adequate staffing, and it was on the back foot in terms of range development. The whole business lacked confidence and momentum.”
Target did try during the holiday season in 2025, Saunders flagged, noting that it had a solid gift assortment and showed some innovation in private label holiday food. However, those efforts were ultimately drops in the “otherwise quite insipid ocean,” he added.
There are early signs that this year could be different. Target in recent months has notched some wins as it once again approaches the ever-important festive season.
A year of change
It’s been over a year since Target announced company veteran Michael Fiddelke would take on the CEO role from Brian Cornell, whose mostly successful reign concluded following several socio-political controversies that impacted Target’s reputation.
Fiddelke formally took control in February and revealed a broader turnaround strategy soon after. The company’s first two quarters of the fiscal year have shown progress, as Q2 net sales grew 5.3% year over year to $26.5 billion and comparable sales jumped 3.8%. That built on Q1's 6.7% year-over-year net sales gain.
A few of the company's noteworthy initiatives in 2026 include its renewed work with fashion designer Isaac Mizrahi, the new Beauty Studio store experience after the end of its partnership with Ulta and the expansion of its online marketplace.
The turnaround signs have been encouraging, according to Katherine Black, a partner at Kearney leading food, drug and mass market retail. For the holiday season, Target’s ability to combine value with inspiration — especially in an environment where price is important to consumers — will be something to nail during the holiday season, Black told Retail Dive in an email.
The company has already tried to master that balance, announcing a new set of price reductions in September on apparel and home merchandise — two product categories that Target has seen slower turnaround progress with.
“Target's continued price investments reinforce our view that management is making the right decisions for the customer and the business,” Jefferies analysts said in an emailed note last week. “In our view, the investment case is increasingly centered on the combination of sharper pricing and significantly improved assortments.”
Target previously cut prices on a wide selection of products in December in an attempt to attract value-conscious shoppers. The retailer also kicked off last holiday season with a focus on exclusivity and newness by unveiling 20,000 new products.
This year, Target’s holidays also come with a refreshed set of executives on its merchandising team. Cara Sylvester became chief merchandising officer in February — marking a newly consolidated position for the retailer — and then added new senior vice presidents to her team in May.
“Target will make some bold bets this holiday season and its store environments will be a lot more celebratory and immersive — which is what consumers want,” Saunders said. “I also think we will see even more effort in categories like gifting, home decorations, and holiday food. Target knows it’s got to inspire customers and while correcting past errors is a work in progress, it has advanced since last year.”
Beyond a refreshed approach to merchandising, the company will need to continue focusing on creating a more consistent customer experience — something executives have harped on for several quarters.
“We've heard clearly from our guests and from many of you that our in-store experience has been inconsistent,” Fiddelke told analysts during a Q4 earnings call in March. “Too often, we're cluttered, out of stock or even transactional. So we're making improvements, first, upstream at headquarters and in our supply chain facilities to remove complexity for our stores.”
To help fix those issues, the executive said store operating models would be reset in the spring to be more centered around improved stocking logistics, visual storytelling, customer support and more. That approach included store payroll investments and a cut in some corporate roles earlier in the year.
Fiddelke's focus on consistency has been reiterated by his leadership team throughout 2026.
“Strategy only matters if there's strong execution behind it,” Sylvester told analysts during an earnings call in May. “It's not enough to have the right assortment. We have to bring it to life consistently across stores and digital with product reliability our guests can trust.”
Consistent execution with Target’s store staffing and guest experience are essential for the holidays, Kearney’s Black said.
“Taking it as a given that the strategy is right, they’ll still need to deliver a consistent experience to consumers, from product availability and store presentation to fulfillment and checkout,” she said.
