Target Shares Slip Pre-Market After Retailer Announces ChatGPT Shopping App, Lower FY25 Guidance

• In an announcement, OpenAI stated that the new Target app in ChatGPT will be launched in beta next week.
• It will allow shoppers to ask for ideas, build multi-item baskets, shop for fresh food, and choose their fulfillment options.
• Target also lowered its fiscal year 2025 guidance, expecting EPS to be in the range of $7 to $8, down from the $7 to $9 it had forecasted in the second quarter.

Target Corp. (TGT) on Wednesday announced a partnership with OpenAI to roll out a new shopping experience for its customers through apps for ChatGPT.

The company revealed the partnership in its third-quarter (Q3) earnings report, noting that users will be able to purchase multiple items in a single transaction through ChatGPT.

Target shares were down by nearly 3% in Wednesday’s pre-market trade. Retail sentiment on Stocktwits around the company trended in the ‘bullish’ territory at the time of writing.

Launching Next Week

In an announcement, OpenAI stated that the new Target app in ChatGPT will be launched in beta next week. It will allow shoppers to ask for ideas, build multi-item baskets, and shop for fresh food. The AI startup also stated that the app will let users choose from fulfillment options, including shipping, Drive Up, and Order Pickup.

Explaining how this would work, OpenAI illustrated an example of a user who will be able to tag the Target app in ChatGPT and say, “Help me plan a family holiday movie night.” The app will return with curated ideas for blankets, candles, snacks, and more.

Target’s AI-Powered Experiences

In addition to the OpenAI partnership, Target also announced new artificial intelligence-powered shopping experiences. Last week, the company announced a new conversational Target Gift Finder that allows shoppers to find the perfect gift for anyone on their list.

The company also announced a new feature that lets shoppers scan their handwritten shopping lists and add the products to their cart.

Target Q3: Weak Sales Outlook

Target reported its third-quarter (Q3) results on Wednesday, with earnings per share (EPS) of $1.78 on revenue of $25.3 billion, compared to Wall Street expectations of an EPS of $1.71 on revenue of $25.42 billion, according to Stocktwits data. The company maintained its fourth-quarter (Q4) guidance of a low-single-digit decline in sales, while Q3 sales declined 1.5% year-on-year.

Target also lowered its fiscal year 2025 guidance. It now expects EPS to be in the range of $7 to $8, lower than the $7 to $9 that it had forecasted in the second quarter (Q2).

The Minnesota-headquartered retailer also announced a 25% increase in its capital expenditure for 2026, raising its outlay to $5 billion.

Target also noted its three priorities to drive long-term growth:

• Design-led merchandising improvements, including the use of AI to predict trends earlier, as well as accelerating production cycles in categories like apparel.
• Improving guest experience, both online and in stores, by offering a next-day delivery option to over half of the U.S. population, and enhancing on-shelf item availability.
• Using technology, such as the partnership with OpenAI, to offer a better shopping experience through digital engagement.

TGT stock is down 35% year-to-date and 44% over the past 12 months.

Also See: Meta Faces Spanish Probe For Alleged ‘Silent Spying’ Of Users For Nearly A Year

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