Key Takeaways
- Target and Walmart have welcomed new CEOs—Michael Fiddelke and John Furner, respectively—at the massive retail companies.
- The leaders are stepping into different situations, with Target suffering from slower sales, and Walmart enjoying new customers.
Same title. Different task.
New CEOs started at two big retailers—Target (TGT) and Walmart (WMT)—on Sunday. Their missions vary considerably. At Target, Michael Fiddelke wants to stem the flight of investors and revive sluggish sales. At Walmart, John Furner aims to continue reeling in new customers and keep investors happy.
“They’re at, really, very different junctures,” TD Cowen senior equity research analyst Oliver Chen said on CNBC. “Target needs a reinvention; Walmart, continuation.”
Fiddelke’s tenure starts as Target seeks to shake off a tough spell. Revenue has fallen year-over-year for the past four quarters. Consumers have pulled back on discretionary purchases, and some of Target’s merchandising picks fell flat. The retailer was also slower to build up the sort of delivery system that attracted shoppers to some of its competitors, Chen said. Investors took notice, with share prices falling by more than 20% over the past year.
Why This Matters to Investors
Target and Walmart both tapped company veterans for the CEO role. Some may see this as a signal that the retailers aren’t looking for a radically different perspective or game plan, though the companies and their shares have been moving in different directions lately.
Fiddelke thinks Target can rebound by better using technology, improving the shopping experience and offering better merchandise, in part, by relying on AI. “While we have real work to do, we are clear on who we are, our unique place in retail and in the hearts of our guests,” he wrote in a memo published Monday. “We are equally clear on the opportunity in front of us.”
Analysts aren’t expecting Target’s stock to bounce back. Company shares—recently trading for about $110—were given an average price target of about $94 among analysts who follow the retailer and were polled by Visible Alpha.
Furner is taking the helm as Walmart enjoys strong sales growth. The company says it has made inroads with higher earners by focusing on low-priced essentials and same-day delivery. Meanwhile, Walmart has parlayed its success with e-commerce and AI marketing into landing on the Nasdaq 100, an index seen as a bellwether of the tech sector.
The CEO had a hand in Walmart prioritizing automation and e-commerce, and believes those moves make sense, he said on a conference call in November. “We have a lot of momentum,” Furner said, according to a transcript made available by AlphaSense. “That strategy is solid.”
Walmart shares have gained some 26% in the past year. Shares are currently trading for about $124, about where they should be, according to analysts: The average price target, according to Visible Alpha, is roughly $125.