Target Tries to Win Back Customers With Back to School Deals

Target has had a tough year. In its Q1 2025 earnings report store sales dropped 3.8% compared to last year. Even though digital sales rose by 4.7%, fewer people are visiting stores. Foot traffic fell 4.8% year over year.

This comes after backlash earlier in 2025 when Target scaled back its diversity, equity, and inclusion (DEI) efforts. That move triggered boycott calls, adding pressure on top of ongoing issues like inflation and weaker consumer confidence.

Target CEO Brian Cornell admitted the company is struggling in what he called an “exceptionally challenging environment.” He pointed to long-term trends like declining discretionary spending (people are cutting back on non-essential purchases - clothes, home décor, or electronics. They’re focusing more on essentials like food, rent, and bills, often because of inflation) and recent issues like tariff concerns and falling consumer confidence.

Target Keeps Prices Flat on School Supplies

Target is betting on back-to-school season to turn things around. They announced they will keep prices flat on key school supplies, holding 2024 prices despite inflation.

More than 1,000 school items will be priced under $5. Families can get 20 essential items - notebooks, crayons, pencils, folders - for under $20 total. First-day outfits will start at $5. Teacher supplies will start at $3.50.

For college students, most dorm and classroom essentials, such as storage, bedding, and apparel, will stay under $40.

Target Circle loyalty program

Target is also using its Target Circle loyalty program to attract more shoppers. Members will get early access to back to school and college discounts from July 6 to July 12.

Chief Commercial Officer Rick Gomez said the company wants to help families by keeping prices down and offering quality products at affordable rates.

Is Target Stock a Buy?

RSI is around 55, which means the stock is gaining, but not yet overheated. MACD has turned positive, suggesting buyers are still in control.

Even though the short term trend looks positive, the bigger picture is unknown. The stock is still trading well below long-term average 200MA, which sits at $123.95. Since the start of the year, the stock is still in the red. Unless Target can push back into the $110 to $115 range, this recent bounce may just be a short lived recovery.

Next resistance for the stock is around $100 to $101, where the price stopped on Friday. If it can break above that level, the next challenge would be around $108 to $110, an area where selling pressure stopped rallies earlier in the year. On the downside, if the stock drops below $96, it could slide toward the low $90s.