MINNEAPOLIS – There must have been a little Tar-zhay magic stirring in Target‘s home department during the recent first quarter.
The retailer‘s Home Furnishings and Decor segment bucked a downward trend by generating year-over-year growth during the quarter ended May 2. It wasn’t a huge gain – segment sales ticked up 0.6% to $3.24 billion compared to $3.22 billion in last year’s first quarter, according to Target’s 10K filing with the SEC.
However, that performance beat a streak of eight consecutive quarters of year-over-year declines in Home segment sales. The last time Target’s Home segment recorded a quarterly sales gain was during the holiday period ended Feb. 3, 2024. It was the lone quarter during fiscal year 2023 when Home sales popped on a year-over-year basis.
Target’s Home Furnishings and Decor segment includes bed and bath, home decor, school/office supplies, storage, small appliances, kitchenware, greeting cards, party supplies, furniture, lighting, home improvement, and seasonal merchandise.
Home was for years a leading differentiator for Target, but following the peak of the Covid-19 pandemic, the retailer had been steadily losing ground. On an annual basis, Target hasn’t generated year-over-year growth in its home segment since 2021. Since then, the company has seen $4.6 billion in sales migrate elsewhere.
In its most recent full fiscal year, the company’s annual home sales fell by $1.09 billion, or 6.5%, ringing in at $15.6 billion. That marked the third year in a row that the company saw more than $1 billion in home sales evaporate.
Under the leadership of CEO Michael Fiddelke, who took the reigns on Feb. 1, the company is working to reclaim its mojo.
See also:
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The revival of its home department began rolling out during the current quarter across multiple product categories. It begins with changing out nearly 75% of the decorative home accessories assortment.
Later this year, that same level of change will hit the floor in the kid’s home and bedding categories as Target seeks to clarify its offerings and value proposition. The multi-year home makeover will take aim at kitchen and storage in 2027.
The company also plans to introduce Threshold shop-in-shops to 200 stores during the second quarter. The move is part of a strategy to streamline Target’s private label home brands and put more focus on Threshold – its most productive label in the department.
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