Target cuts its full-year guidance, warns that consumers are ‘choiceful’ | investingLive

Another disappointing earnings report from Target begs two questions:

1. Is this a sign that US consumers are weak?
2. Or that Target isn’t executing?

On the first point, it comes after Home Depot shares were beaten up yesterday on a soft report. With Home Depot, the company blamed the lack of hurricanes and other storms in the quarter and a soft housing market. That’s understandable as the US housing industry has been mired in a brutal recession.

Does Target tell us that it’s more than just housing and weather? Here is what the company had to say:

“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.

For the fourth quarter of 2025, the Company is maintaining its expectation of a low-single digit decline in sales but for the full-year, the company cut its earnings guidance to $7.70-$8.70.

Overall revenue and same-store sales were soft. The SSS metric has declined for five straight quarters, suggesting it’s more that just the consumer and indicates problems with the brand. The metric fell 2.7% in Q3, including a 3.7% drop in household essentials.

The company is also spending to upgrade its stores as it tries to recapture its premium-value brand.

Ultimately, I don’t think this is going to sway the market’s view on the consumer but Walmart reports tomorrow and that will tell us more.