What happened
Shares of Target (TGT -0.92%) rose 4.4% on Wednesday after the discount retail chain announced that CEO Brian Cornell would remain at its helm for the next three years.
So what
Cornell, 63, was approaching Target's retirement age of 65, but he doesn't want to retire just yet. The company was happy to appease him, so its board of directors eliminated its retirement policy.
Target's lead independent director, Monica Lozano, said in a press release: "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. We enthusiastically support his commitment and his continued leadership, especially considering his track record and the company's strong financial performance during his tenure."
Cornell was named CEO in 2014. Back then, the big-box retailer was bleeding market share to e-commerce rivals like Amazon.
Cornell helped to lead Target's turnaround strategy. He positioned it as an omnichannel retailer and invested heavily in its digital initiatives. Under his watch, the company acquired Shipt for $550 million in cash in 2017, and the same-day delivery platform went on to become a major growth driver for the company. Shipt has also provided Target with a powerful edge over its competitors during the pandemic, because more retail purchases have migrated to quick-delivery online channels.
"By taking care of our guests, our team, our communities, and our shareholders, Target has added nearly $40 billion in annual revenue since I joined the company, and in many ways, we're just getting started," Cornell said.
Now what
Target's growth has slowed in recent quarters, as inflation has taken a toll on consumers. Its stock price, in turn, is down roughly 25% in 2022. Yet Cornell's commitment to stay on as CEO for another three years should help to calm investors' nerves during these turbulent economic times. And he's well suited to help the retailer rally to new heights in the coming years.
