Crippled Target Promotes Someone Who Helped Break It

By Douglas A. McIntyre Published Feb 2, 9:15AM EST

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The Target Corp. (NYSE: TGT) board of directors showed poor judgment in its choice for new chief executive.
The chief operating officer was part of the team that broke Target.

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Crippled Target Promotes Someone Who Helped Break It — © Alex Wong / Getty Images News via Getty Images

No large retailer in America has posted worse results over the past five years than Target Corp. (NYSE: TGT | TGT Price Prediction). And the board has shown another example of the poor judgment that hurt it. Michael Fiddelke, Target’s chief operating officer, was promoted to chief executive, after working for his boss Brian Cornell.

As strange as it seems, Cornell became executive board chair, after a five-year period during which the stock dropped 44%, while the S&P 500 gained 79%. During the same period, the shares of rival Walmart Inc. (NASDAQ: WMT) were up 148%.

It is amazing that the board did not bring in an outsider.

Just as Fiddelke was promoted, Oliver Chen, an analyst at the investment bank TD Cowen, told clients, “Target has a lot of needs. It starts with product.” In the most recent quarter, revenue fell 1.5% to $25.3 billion. Earnings collapsed 18.8% to $1.52 per share.

Morningstar described why Target’s problems were years in the making and are probably permanent: “We do not assign Target an economic moat rating, as we believe the company lacks a structural cost advantage, pricing power, or moat-worthy intangible assets to deliver excess ROICs over the long run.” According to Morningstar, Target’s revenue and net income peaked in 2022.

Wall Street does not think well of Target. According to Yahoo, analysts do not believe this year will be any better than last year. That means it is likely its stock price will not improve.

Cornell’s tenure was a disaster. Fiddelke was on his team.

Worst CEOs of the Year: Brian Cornell of Target

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.