Target CEO Michael Fiddelke said digital traffic from AI platforms is growing 3.5 times the industry rate. Food sales rose on a center-store overhaul. The retailer named its first chief AI officer.
Alpha Score of 68 reflects moderate overall profile with strong momentum, strong value, weak quality, moderate sentiment.
Target posted a 3.8% gain in second-quarter comparable sales and a 3.6% increase in guest traffic, the retailer reported Wednesday. The results came as the company credited a new source of growth: shoppers arriving through artificial intelligence platforms.
Chief Executive Michael Fiddelke said on the earnings call that digital traffic sourced from external AI platforms is growing at more than 3.5 times the industry rate versus a year ago, though the channel remains small in absolute terms. Target has partnerships with AI companies including OpenAI, part of what the retailer calls its agentic commerce push.
AI is also being deployed inside the business. Target created an AI-powered tool for teacher and college wish lists that saw creation volume jump more than 50% ahead of the back-to-school season, Fiddelke said. Internally, the company runs Proxima, a digital twin of its middle-mile supply chain.
"Proxima helps us more efficiently evaluate inventory processes between our buildings and stores, giving our teams a way to quickly understand potential downstream impacts, learn faster and make inventory decisions with greater confidence," Fiddelke said.
Food and beverage sales got a lift from what Target called its largest center-store transition in a decade. Snack sales rose more than 15%. Other segments like home and apparel remained flattish, Fiddelke said.
Digital comparable sales climbed 8.7%, and same-day delivery services surged 25%, according to the earnings release.
Target last week appointed Chandu Nair as its first chief AI officer. Nair, who joins from Lowe's where he was senior vice president of stores, data, AI and innovation, starts Aug. 24. At the time of his hiring, Nair said a coordinated AI strategy could help Target adapt to shifting customer needs, improve inventory management, simplify staff workflows and speed decision-making.
Fiddelke, who took the CEO role in February, said technology is a top priority. He described the goal as building a digital experience that is "easier, more inspiring and welcoming" and that removes friction for customers.
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