The retailer space doesn't have a Comeback Player of the Year award like some sports leagues, but if it did, this could be Target's (TGT +1.15%) trophy to claim in 2026.
After three years of sliding sales, the discount retailer and Dividend King (a company that has raised its dividend payments for 50 years or more) has turned positive this year. It doubled its top-line growth forecast for the full year to 4% in its latest quarter.
The market has noticed that the "cheap chic" retailer has gone from cheap to chic. The shares are trouncing the market with a 56% surge this year. It also boosted its healthy quarterly distributions, stretching its streak of hikes to 55 consecutive years. Hoping to build on its recent bullish momentum, Target announced on Tuesday that it will be hiring its first chief AI officer later this month.
Image source: Getty Images.
You can't spell "retail" without an "A" and "I"
Chandhu Nair will join Target as senior vice president and its first chief AI officer on Aug. 24. He comes over from home improvement giant Lowe's, where he served as its senior VP of stores, data, AI, and innovation.
This doesn't mean this is Target's initial foray into AI, but making the executive position official is significant. It's a great way to signal to the investment community that the once-tired chain that it has been warming up to this year is looking at next-gen tricks to keep the positive comps coming.
Target stock is hot, and new CEO Michael Fiddelke kicked off his tenure this year by announcing a $2 billion plan to beef up four phases of its business. Two of those areas of focus -- advancing technology and elevating the shopping experience -- should be addressed by the new hire.
NYSE: TGT
Key Data Points
From floor models to AI models
Wall Street has already started to see AI pay off for Amazon (AMZN -1.10%). The country's largest revenue generator has relied on its virtual assistant Rufus to improve the online experience, thereby accelerating e-commerce growth.
You can expect Target to step up its already ascending game online, but Nair will also work on in-store initiatives. He's hoping to launch tools for team members and shoppers alike to deliver better outcomes at the store level. Introducing change at a time when store traffic and sales are picking up after a few lean years is risky, but the bigger risk is riding the wave of complacency.
Fiddelke is off to a strong start, with net sales rising almost 7% in his first quarter at the helm. Now it's time to see if AI can take Target to the next level.
