Target Corp (NYSE:TGT) shares were set to drop on Wednesday as the retailer announced a change of CEO and reported earnings that narrowly beat expectations.
The S&P 500 company said chief operating officer Michael Fiddelke will succeed Brian Cornell as chief executive from next February, after over a decade in the role.
Christine Leahy, lead independent director of Target's board, said the decision followed a succession process carried out over the last several years.
"It is clear that Michael is the right leader to return Target to growth, refocus and accelerate the company's strategy, and reestablish Target's position as a leader in the highly dynamic and fast-moving retail environment."
Fiddelke, a 20-year Target veteran, is credited with leading major operational initiatives, cutting $2 billion in costs, and driving investment in digital, supply chain and team member benefits.
Second quarter earnings showed tentative signs of recovery, with net sales dipping 0.9% year-on-year to $25.2 billion, which marked nearly two percentage points of improvement over the first quarter and was better than the $24.9 billion Wall Street consensus.
Earnings per share of $2.05, while down from $2.57 a year ago, beat the Street estimate of $2.01
For the full year, Target still sees a sales decline in a low-single digit percentage and adjusted EPS of about $7 to $9.
"As we enter the back-to-school and holiday seasons, our team remains focused on consistent execution and building momentum,” said outgoing CEO Cornell, who will transition to executive chair of the board.
The shares were down 10.6% to $94.21 in pre-market trading.