Target Warns of 2025 Profit Pressure Amid Tariffs

Target exceeded fourth-quarter earnings expectations with an EPS of $2.41, surpassing the forecast of $2.26, yet anticipates significant profit pressure in the first quarter of FY25 due to tariffs and consumer uncertainty. The retailer reported a decrease in net sales by 3.1% to $30.92 billion, with digital sales growing 8.7% despite a 0.5% decline in in-store sales, reflecting a challenging retail environment. CEO Brian Cornell expressed concerns over upcoming price hikes due to new tariffs on imports from Mexico and Canada, which could further impact consumer spending. The broader retail sector is experiencing a slowdown, with U.S. consumer sentiment at a 15-month low, impacting discretionary spending categories. Target's guidance for the year reflects modest expectations, with projected earnings per share between $8.80 and $9.80 and net sales growth around 1%, both below analyst estimates. The company's strategic focus on digital capabilities and exclusive brand collaborations aims to counterbalance these challenges.