By skyforbes 
Target (TGT) has consistently delivered on one thing in 2025: Serving up brutal warnings about its business on earnings days.
The discount retailer cut its full-year profit guidance on Wednesday and warned of a tepid holiday season as strapped consumers battle through an affordability crisis for food, healthcare, and housing.
"Many of the themes remain largely consistent with what we've shared in prior quarters. Guests are choiceful, stretching budgets and prioritizing value. They're spending where it matters most, especially in food, essentials, and beauty," Target chief commercial officer Rick Gomez said on a call with reporters, adding that shoppers are looking for deals on discretionary items.
Target stock fell in premarket trading after the report.
The cautious spending wasn't hard to find in Target's results.
The number of transactions declined year over year. Sales dropped in more discretionary departments, such as beauty and home furnishings.
Target promised to ramp up capital expenditures by 25% in 2026 to improve the appearance of its stores. The company said it cut prices on 3,000 food and household essential items last week.
"We believe there is a path to win regardless of how the macro environments will continue to evolve around us," incoming Target CEO Michael Fiddelke said.
Fiddelke — a Target veteran — will succeed longtime CEO Brian Cornell officially on Feb. 1, 2026.
The market is calling Fiddelke's bluff in that the company could win in a mixed to softening US economic backdrop, one also where tariffs are weighing on costs.
Most analysts on the Street have Neutral or Sell ratings on Target's stock, despite it being down 35% this year.
"We see increasing longer-term sales and margin risks for Target on slowing digital sales growth, a lack of scale in digital advertising and third-party marketplace, elevated tariff, pricing and merchandising headwinds, and increasing competitive threats from Walmart (WMT) and Amazon (AMZN)," Bank of America analyst Robert Ohmes said.
"Target also has higher tariff exposure vs. Walmart," he added, "and we think merchandising leadership and partnership changes (including Ulta Beauty (ULTA)) could potentially exacerbate risks in the dynamic and challenging sourcing environment."