Key takeaways:
- Target is lowering prices on nearly 2,000 home and apparel and accessories items ahead of the holiday shopping season.
- The move builds on more than 10,000 price cuts the retailer has made over the past year.
- The discounts arrive as Target’s apparel and home categories posted flat sales in the second quarter, even as the company’s overall business grew.
Target is lowering prices on nearly 2,000 home and apparel and accessories products, the company announced Tuesday, part of an effort to draw budget-conscious shoppers into stores and online as the holiday season approaches.
The cuts affect women’s, men’s, infant and toddler apparel and shoes, along with a refreshed bedding lineup, according to a press release. Women’s long-sleeve tees now cost $12, down from $15. The average price of women’s shoes fell to $35 from $40, and nearly 70% of new shoe styles are priced below last year’s equivalents. The price of kids’ rain and winter boots are down about 15% on average. In home goods, bedding prices dropped 15% on average: Threshold queen comforters now sell for $69, down from $89, Room Essentials queen comforters fell to $40 from $50, and Threshold performance queen sheets dropped to $50 from $55.
The reductions build on more than 10,000 price cuts Target has made over the past year, a pattern that has become a recurring theme in the company’s public messaging.
“Guests are looking for great products at an incredible value, and that’s an important part of what we aim to deliver every day,” said Cara Sylvester, Target’s EVP and Chief Merchandising Officer, in a statement. “By continuing to lower prices across our assortment, we’re making it even easier for busy families to create moments of joy this fall with the style, design and exceptional value they can only find at Target.”
Target is also pointing shoppers toward Target Circle Deal Days, a members-only promotion running Oct. 6 to Oct. 7. Target Circle membership is free.
A Cautious Consumer
Shoppers are under pressure. Target has leaned on repeated, publicized markdowns for more than a year now, a sign that it sees value messaging as necessary to keep traffic moving through its stores rather than a short-term promotional push.
In the second quarter that ended August 1, Target’s apparel category posted net sales of $4.09 billion, essentially flat compared with $4.09 billion a year earlier. Home furnishings and decor also stalled, generating $3.67 billion versus $3.66 billion in the same quarter last year.
CEO Michael Fiddelke acknowledged the sluggishness on the company’s second-quarter earnings call in August.
“Flattish growth in apparel and home isn’t what we strive for over time, and the earnings power potential of those two high-margin categories returning to a place of more sustained growth is something we look forward to,” Fiddelke said.
Executives attributed some of the drag to longer product lead times, which slow the pace at which Target can refresh those categories. Sylvester said updated decorative accessories are already outperforming in stores where the changes are complete, with additional overhauls to bedding, kids’ home and bath planned for the third quarter.
Broader Momentum, Uneven Results
Target posted net sales of $26.5 billion in the second quarter, up 5.3% year over year, with comparable sales growing 3.8% on a 3.6% increase in traffic. Digital comparable sales rose 8.7%, driven by more than 25% growth in same-day delivery.
“Second quarter results build on the encouraging momentum we saw in the first quarter, giving us increasing confidence that our strategy is resonating with our guests and strengthening our leadership position in style, design and value,” Fiddelke said.
Target also received $994 million in pretax tariff refunds during the quarter under the International Emergency Economic Powers Act, which reduced cost of sales and lifted gross margin by 3.7 percentage points. The company raised its full-year net sales guidance to around 5% growth and updated its earnings per share guidance to a range of $9.90 to $10.90, a figure that includes the tariff refund benefit.
