Target stock and sales fall as CEO Brian Cornell contract ends

Shortly before a road trip in early 2024, Mary Molina realized her view of Target had changed.

Molina, a mother of five and entrepreneur who lives in Westchester, New York, said her weekly trips to Target looked and felt different from her experience before the Covid pandemic. Items such as national brands of laundry detergent or shampoo were often out of stock. She said store employees weren’t as friendly as before, with heads down or eyes glued to a handheld device as they picked orders for an online shopper. And when she browsed for the cute and trendy swimsuits, pajama sets or sandals she had typically found at Target, she said it felt like “a sea of generic.”

“It was a small evolution, and then one day, my husband said, ‘Let’s stop at Target and then we’ll go to Rhode Island,'” she said of preparing for the road trip. “And I said, ‘What for?'”

Molina and customers like her reflect a fading loyalty to Target that’s testing its business model and slowing its sales.

The retailer, which gained a loyal following over decades for its quirky, progressive and chic approach to big-box retail, now appears stuck as it tries to grow again and bounce back from lower store traffic, inventory issues and customer backlash. Shares of Target have fallen about 61% since their all-time high in late 2021. That peak came after Target’s sales rose more than $15 billion in the fiscal year following the start of the Covid pandemic, but its annual revenue has stagnated for the past four years. And Target said in May that it expects sales to fall this year.

Target leaders have described the weaker performance as a blip, pointing to higher inflation or other temporary factors, and expressing confidence in its long-term strategy. In May, Target said sluggish sales resulted from weaker discretionary spending, uncertainty about President Donald Trump’s tariffs and backlash to its decision to roll back key diversity, equity and inclusion efforts.

But customers, former employees, vendors and analysts painted a picture of a company at an existential crossroads. In interviews with CNBC, they attributed Target’s struggles to the weakening of unique traits that helped the retailer stand out, including its eye-catching merchandise, attentive staff, well-kept stores and commitment to celebrating diversity through both the items that it sold and the policies it supported.

Multiple former employees, who asked not to be identified because they weren’t authorized to speak publicly on the matter, said Target’s store standards have slipped in recent years as the company has tried to juggle online and in-store businesses with a leaner store staff — leading to items being out of stock. Customers and analysts also told CNBC they have seen longer checkout lines, messier aisles and fewer employees at stores. Plus, former employees said Target’s sharp turn away from diversity efforts, along with cost cuts, hurt corporate culture and employee morale.

“They have kind of lost their identity,” said a former employee, who worked for the company for nearly a decade but left recently to work for a competing retailer.

The bulk of the work to turn Target around will likely fall to a new chief executive. CEO Brian Cornell is 66 years old, and in September 2022, Target said he agreed to stay in the role three more years. The company has not disclosed when that contract expires or named his successor.

Investors have speculated about who will lead the company after Cornell — and what that internal or external pick may mean for the company’s future.

Cornell took the helm at Target in 2014, another troubled time in the company’s history. He started as CEO after ex-CEO Gregg Steinhafel resigned following a data breach that compromised the personal information of as many as 110 million people — equivalent to roughly 1 in 3 Americans at the time.

Target said it believes it can rebound again from its current low point, as it invests in store renovations and plans to open 300 more locations over the next 10 years. Target declined interview requests for this story, but provided a statement from Cornell, who said the company is “built for long-term, profitable growth,” boosted by its store fleet, growing digital business and brand partnerships.

“Backed by strong assets, proven capabilities and a talented team, we’re confident in our ability to accelerate near-term performance while continuing to innovate and serve our guests—today and in the years ahead,” he said.

The company announced several…