Target’s corporate bonuses decline on lower sales, profit
Target Corp. cut bonuses for its salaried employees, as the retailer’s sales and profit fell on soft consumer spending.
Employees are set to receive 87% of their eligible 2024 bonuses, said people familiar with the matter. Bonuses will be payable at the end of the month, the people said.
A Target spokesman confirmed the numbers. Target looks at various factors to determine its bonus score, primarily its financial performance, he said, adding that the company tracks the figure throughout the year.
The big box retailer’s bonuses apply to salaried staffers in their corporate offices, stores and distribution centers, and typically max out at 175% of their targets.
Eligible employees got 100% of their bonuses last year, doubling what they earned the year prior.
Target has been trying to get back to steady growth for nearly two years. Sales and profit dipped slightly in fiscal 2024 from the year prior due to weaker discretionary spending, though the company has said they came within its expectations.
US consumers have been selective with their purchases, prioritizing necessities and value. That has dented spending on non-essential items like apparel and home products – Target’s key categories. These behaviors became more pronounced in recent months, Target executives said when reporting earnings in March. In response, Target has been leaning into offering low prices and new products to grow traffic and sales.
But uncertainties are weighing on the business. The company expects to raise prices on products if tariffs take effect, executives said earlier this month, warning that produce and other items with shorter supply chains would be hit first. Target also said it would move away from quarterly forecasts to annual guidance due to volatilities and that it will keep a “larger than normal cushion” of cash on its balance sheet to navigate uncertainties.
In recent weeks, various companies from American Airlines Group Inc. to FedEx Corp. have warned about uncertain demand and consumer weakness. Consumer confidence also dropped due to concerns about the outlook for the economy.
Other retailers have shared bonuses with staff in recent months as fiscal years wrapped up. Most of Walmart Inc.’s U.S.-based corporate employees received 122% of their eligible bonuses, a slightly lower payout than last year but surpassing target.