Target is facing pressure from hedge fund Toms Capital Investment Management, which has made a significant investment in the retailer, the Financial Times reported Friday, citing people familiar with the matter.
Shares of the company were up more than 1% after the news.
The stock has lost about 26% of its value this year.
The Minneapolis-based retailer has posted three straight quarters of falling comparable sales and is betting on incoming chief and longtime company executive Michael Fiddelke to revive growth, as the business faces pressure from strained household budgets and tariff uncertainties.
Meanwhile, rival Walmart has gained market share with its focus on cheap groceries and household essentials, coupled with fast doorstep delivery.
“As part of our robust shareholder engagement program, we maintain a regular dialog with the investment community. Target’s top priority is getting back to growth…,” Target said in a statement to Reuters.
Target has plans to spend an additional $1 billion in 2026 on new store openings and remodels. It has also cut 1,800 corporate roles as part of a broader restructuring.
The company faced another activist investor scrutiny in 2009 when it fought a high-profile proxy battle with Pershing Square’s Bill Ackman, who sought board seats to push through a real estate spin-off amid a dip in Target’s profits.
Despite Ackman’s 7.8% stake, shareholders backed Target’s incumbents, which cost the retailer about $11 million.
Earlier this year, Toms Capital had built a stake in Tylenol maker Kenvue before its sale to Kimberly-Clark last month for $40 billion.
Activist investors, including Toms Capital, Elliott Investment Management and Jana Partners, had a busy year, launching a record number of campaigns and winning more board seats and settlements.
The surge in activism comes as more consumer goods firms replace their top bosses, reflecting how investor pressure and sluggish performance are driving leadership shake-ups.
Toms Capital and Pershing Square did not immediately respond to Reuters requests for comment.
