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

Target is also intensifying efforts to entice customers nervous about the economy. The retailer will offer 10,000 new items starting at $1 — with the majority under $20.

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

Out of 35 merchandise categories that the company tracks, it’s gaining or maintaining market share in only 15. The company reported some market share gains in women’s swimwear, infant and toddler clothing, and active wear.

The latest results underscore Target’s ongoing struggle in recent years to revive sales, particularly in nonessentials like fashion and home furnishings, as competition grows more fierce.

Back in March, Target had outlined to investors how it was going to bring back its “Tarzhay” magic— defined by affordable but trendy offerings — by expanding its store label brands and shortening the time it takes to get products to the shelves from conception. That will help the company stay close to trends, company executives said.

But it’s been a complicated feat even without the tariff trade wars. Target’s shares have fallen more than 37% in the past 52 weeks.

Target rival Walmart reported strong quarterly sales last week. The nation’s largest retailer said it’s already raised prices on some items due to tariffs and that more price hikes are on the way this summer when the back-to-school shopping season goes into high gear. For example, car seats made in China that sell for $350 at Walmart will likely cost customers another $100, executives said.

Target didn’t offer specifics on tariffs’ impact on prices, but said that it was looking at different ways to offset those costs like shifting sourcing. It said it should be able to offset the majority of the impacts from tariffs.

“We look at competition,” Cornell told reporters. “We make adjustments literally each and every week, so we’re constantly adjusting pricing. Some are going up. Some will be reduced.”

President Donald Trump’s threatened 145% import taxes on Chinese goods were reduced to 30% in a deal announced May 12, with some of the higher tariffs on pause for 90 days.

Walmart was able to dodge some of the tariff damage other retailers are suffering because groceries account for about 60% of its U.S. business. Target is more reliant on discretionary items like clothing and accessories, with less than a quarter of its sales coming from groceries.

The company has reduced the number of its store-label products sourced from China to 30% now from 60% in 2017. The company says is on its way to reducing that to 25% by the end of next year. Target is shifting sourcing to Guatemala and Honduras and is looking to sourcing in the U.S.

Target is being pressured on other fronts as well.

The company in January said it would phase out a handful of DEI initiatives, including a program designed to help Black employees advance their careers and promote Black-owned businesses. Conservative activists and President Trump have sought to dismantle DEI policies in the federal government, schools, and at private businesses.

The pastor of a Georgia megachurch who led a nationwide 40-day boycott of Target stores in response called last month for a continuation of that effort.

The Rev. Jamal Bryant is seeking a reinvigorated commitment from Target on diversity, and he wants more support from Target for Black-owned banks and businesses.

Target operates nearly 2,000 stores nationwide and employs more than 400,000 people.