Target’s Terrible CEO Cornell Fumbles Again

By Douglas A. McIntyre Published Nov 17, 8:30AM EST

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Target’s Terrible CEO Cornell Fumbles Again — © Joe Raedle / Getty Images News via Getty Images

It is nearly a miracle that Target CEO Brian Cornell still has his job. In a world where Target Corp. (NYSE: TGT | TGT Price Prediction) investors should be able to rely on good board governance, his mistakes have gone uncriticized and his job appears completely secure. When Target announced terrible quarterly results, it said its near-term future is troubled, and Cornell’s mistakes continue to compound themselves.
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Target’s stock dropped 13% when the quarterly figures were released. That puts the shares down by more than 30% this year. By contrast, Target’s largest rival, Walmart, has shares up 3% over the same period, against an overall market that has dropped 16%.
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Before the earnings announcement, investors faced the trouble of Cornell’s choice of inventory midyear. Because of this fumble, Target had the wrong items at a time when it might have gained ground with optimistic consumers. That ship sailed long ago.

Target’s comparable store sales crept up only 2.7% in the quarter. Per-share earnings plunged by 49.3% to $1.54. Cornell blamed the problems on consumers plagued by inflation, rising interest rates and “economic uncertainty.” For some reason, larger rival Walmart did not run into these walls.
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Target’s revenue rose only 3.4% to $26.5 billion. The operating income margin dropped from 7.8% in the year-ago period to 3.9%.

Cornell dropped top-line and bottom-line expectations for the fourth quarter to make matters more challenging for investors.
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Target’s board of directors extended Cornell’s contract in September. The board must have known at the time that Target was in trouble. Nevertheless, his contract was extended by three years. Lead independent director Monica Lozano said at the time, “In discussions about the company’s longer-term plans, it was important to us as a board to assure our stakeholders that Brian intends to stay in his role beyond the traditional retirement age of 65.” She has been on the board since 2016, which makes her a part of Target’s long-term problems.

Cornell’s job is cemented for three more years unless the board comes to its senses.

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.