Former Gap CEO reveals the only thing that could save Target

The roadworthy backmost to glory won't beryllium casual for incoming Target (TGT) CEO Michael Fiddelke.

If helium has immoderate changeable astatine yet hitting immoderate bullseyes connected net days, past helium has to reconstruct Target's inexpensive chic DNA —and adjacent that won't beryllium a summons to occurrence successful an system that's favoring terms person Walmart (WMT).

"Target utilized to beryllium a very, precise guardant reasoning company. And I'm definite the caller CEO is precise smart. But you besides got to look astatine merchandise and merchandise, and that's similar a edifice serving bully food. And if the nutrient lacks cardinal ingredients, you know, that's not bully nutrient successful a sense. But it's the aforesaid with merchandise. It's got to sensation good. It's got to look bully and it's got to person newness. That's the oxygen of immoderate business," said erstwhile Gap and J.Crew CEO Mickey Drexler connected Yahoo Finance's Opening Bid (video above).

Drexler sat connected the committee of Apple (AAPL) for 16 years (alongside Steve Jobs). Today, he's the president of apparel institution Alex Mill.

As for Target, it has consistently delivered connected 1 happening successful 2025: serving up brutal warnings astir its concern connected net days.

The discount retailer chopped its full-year nett guidance connected Nov. 19 and warned of a tepid vacation play arsenic strapped consumers conflict done an affordability situation for food, healthcare, and housing.

The cautious spending wasn't hard to find successful Target's results.

The fig of transactions declined twelvemonth implicit year. Sales dropped successful much discretionary departments, specified arsenic quality and location furnishings.

Target promised to ramp up superior expenditures by 25% successful 2026 to amended the quality of its stores. The institution said it chopped prices connected 3,000 nutrient and household indispensable items successful November.

"We judge determination is simply a way to triumph careless of however the macro environments volition proceed to germinate astir us," Fiddelke told Yahoo Finance connected a telephone with reporters astatine the time.

Fiddelke — a Target seasoned — volition win longtime CEO Brian Cornell officially connected Feb. 1, 2026.

The marketplace is calling Fiddelke's bluff successful that the institution could triumph successful a mixed to softening US economical backdrop, 1 wherever tariffs are weighing connected costs.

Target's banal is down 34% twelvemonth to date. Walmart — which volition spot US stores main John Furner presume the CEO presumption from Doug McMillon successful aboriginal 2026 — has seen its banal beforehand 23%.

Most analysts connected the Street person Neutral oregon Sell ratings connected Target's stock.

Added Drexler, "You can't reason with Walmart's results, oregon adjacent Costco's (COST)."