Target tumbles after warning of terrible, tariff-ridden first quarter

Target shares fell after the retailer topped Q4 expectations but gave a shaky outlook for the first quarter. The retailer posted earnings of $2.41 per share, topping Wall Street’s expected $2.26, with revenue reaching $30.92 billion, also slightly above estimates. But sales still dropped 3% from the same quarter last year as the retailer grappled with softer consumer spending and heavy discounting over the holidays, pressuring profits.

The stock was down nearly 4% in premarket trading.

Looking ahead, Target said it’s bracing for a “meaningful” drop in first-quarter profit, citing weak February sales and declining consumer confidence. Finance Chief Jim Lee pointed to “uncharacteristically cold weather” hurting apparel sales, while CEO Brian Cornell warned that new 25% tariffs on Mexican imports could soon push up prices on produce like bananas and avocados.

Target expects full-year earnings per share between $8.80 and $9.80 — largely in line with forecasts — but projected just 1% sales growth, well below analysts’ 2.6% estimate. To drive momentum, Target is leaning on exclusive partnerships with Champion and Warby Parker as well as trend-driven merchandise. Target shares are down nearly 20% over the past year.