Target CEO Brian Cornell stepping down as slump drags on

Driving the news: Brian Cornell — who invested in private-label brands, remodeled Target stores and expanded the big-box chain's online sales — will step down as CEO and become executive chair as of Feb. 1.

• 20-year company veteran Michael Fiddelke, currently serving as chief operating officer, will succeed him as CEO.
• "I've seen how our business can perform when we're at our best, and therefore where we also have clear opportunities today to improve our performance, and we must improve," the new CEO said on an earnings call.
• "I know we're not realizing our full potential right now, and so I'm stepping into the role with a clear and urgent commitment to build new momentum in the business and get back to profitable growth."

The big picture: The shakeup was announced concurrently with the company's second-quarter earnings report, which showed a decline of 1.9% in comparable sales from a year ago.

• That included a 3.2% drop in comp store sales and a 4.3% increase in comp digital sales.

• State of play: Target has been losing ground to rival Walmart on value and product mix.
• The company is plagued by "issues like out of stocks, long wait times at registers, and increasingly messy stores," according to GlobalData analyst Neil Saunders.
• "All these things actively train customers not to shop at Target; especially during a period when the shopper is laser focused on value for money and time."

The impact: Target stock plunged more than 10% in pre-market trading.

• "Investor sentiment has been mixed as Fiddelke does have an impressive 20-year tenure at TGT but also no prior CEO experience," TD Cowen analyst Oliver Chen wrote Wednesday.