Target’s decision to appoint longtime insider Michael Fiddelke as its next CEO has rattled investors, sending shares down more than 7% on Wednesday.
Fiddelke, a 20-year veteran of the retailer and current COO, will officially take over in February 2025, succeeding outgoing CEO Brian Cornell. While Fiddelke pledged to make growth his “number one goal,” investors and analysts expressed doubts that an internal candidate could fix the company’s persistent struggles.
Target has faced years of underperformance marked by sales declines, inventory missteps, and weak merchandise strategies. Over the last five years, Target’s stock has fallen 23%, compared to a 125% rise for Walmart and more than a 300% surge for Costco.
“An internal appointment does not necessarily solve entrenched groupthink,” said Neil Saunders of GlobalData. Analysts argued that the retailer might have been better served by bringing in fresh external leadership.
Despite skepticism, Fiddelke outlined three key priorities:
1. Enhancing merchandise quality, value, and style.
2. Delivering a more consistent shopping experience.
3. Accelerating the use of technology across operations.
Target’s second-quarter results showed comparable sales fell 1.9%, a smaller drop than expected, while revenue of $25.21 billion topped forecasts. Still, profit margins shrank to 5.2% from 6.4% a year earlier, pressured by tariffs, markdowns, and softer demand for discretionary goods.
Analysts warned that Target faces an “uphill battle” to regain ground against digital-savvy rivals. Meanwhile, the company is trying to win back customers by expanding affordable private-label lines and introducing 10,000 new low-cost items, most priced under $20.
Cornell, who had stayed on past retirement age to help steer the company, said succession planning included both internal and external candidates but ultimately emphasized Fiddelke’s deep experience and operational leadership.
For now, investors remain cautious. “What we need is clear evidence of real change,” said Charles Sizemore, a former Target shareholder.
