In a financial update it released yesterday, Target Corporation has reported US$24.1 billion in Q1 sales, representing a 3.7% decline from the same period last year (US$24.9 billion). And revenue was down 3.1% to US$24.53 billion. 

Operating income hit US$1.32 billion (a 2.4% drop from last year), but net earnings for the quarter are only down slightly (0.8%) from US$950 million in Q1 2023 to US$942 million this year. Meanwhile, same-day services posted a healthy 9% increase, lifting up the retailer’s digital business.

While Target says the numbers are “in line with expectations,” they paint a picture of a challenging retail landscape, despite increasing store visits across the US (as per new NRF data) and fellow retail giant Walmart faring better in Q1 with a 3.8% uptick in sales.

“Looking ahead, our team will deliver for our guests through lower prices, a seasonally relevant assortment, ease and convenience,” notes Target CEO Brian Cornell, adding that the company expects to return to growth in Q2. “[We will] keep investing in our strategy and efficiency initiatives to get back to growth and deliver on our longer-term financial goals.”

Target has already started implementing some key measures to attract cost-conscious consumers. In February, the retailer launched a new value brand called Dealworthy, featuring hundreds of everyday basics for under US$10. And the following month, it unveiled a new kids brand called Gigglescape, playing on an “adorable and affordable” strategy with books priced at US$5 and most plush toys priced at US$10 or less.

Target also reduced prices on more than 1,500 popular items earlier this week (May 20) heading into Memorial Day weekend. It’s the first phase of a long-term plan to make more than 5,000 frequently bought products more affordable. The current quarter should see a boost from popular brands like the Pudgy Penguins range that Target lined up earlier this month, along with Hasbro’s Transformers One action figures, which are expected to drop in the summer.