Target Warns of Potential Price Hikes After First-Quarter Sales Decline

Like rival Walmart, Target may be forced to raise prices on some merchandise in the near future. The heavy costs and uncertainties tied to tariffs could be too much to absorb, prompting the retailer to increase prices as a “very last resort.”

While Target did not offer many details, company leadership did say that potential price modifications will be carefully evaluated “literally each and every week.” Various items will go down in price, while others will be raised.

“The difficulty level has been incredibly high given the rates we’re facing and the uncertainty about how these rates in different categories might evolve,” said Target CEO Brian Cornell, per ABC News. “We’re focused on supporting American families and how they manage their budgets.”

Additionally, toymaker Mattel and consumer goods seller Procter & Gamble warned of rising prices due to costs associated with importing goods. Walmart also blamed tariffs for upcoming price hikes. Meanwhile, home improvement supplier Home Depot promised to hold the line on prices despite tariff pressures.

Target by the Numbers

Target’s first fiscal quarter ended with $23.8 billion in net income, about $1.30 per share, which was down almost 3% compared to the same period last year. Analysts were hoping for $24.32 billion, or $1.63 per share.

Same-store sales, which measure revenue from locations open at least one year, declined nearly 4% in the quarter. The average amount spent per customer, both online and in-store, fell 1.4%. Also falling was the average number of transactions, sinking 2.4%.

“I want to be clear,” Cornell said, according to ABC. “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.”

For fiscal year 2025, Target projects a low-single-digit decline in net sales. Adjusted earnings per share will lie between $7 and $9, down from earlier expectations of $8.80 to $9.80.

To combat the disappointing figures, Target created the Enterprise Acceleration Office, headed by Chief Operating Officer Michael Fiddelke. The initiative will explore and implement ways for the company to operate more efficiently, with a focus on maintaining profitable growth.