$1 Items, Made Outside China: Here's How Target Has Been Tariff-Proofing Its Shelves, With Price Hikes 'The Very Last Resort'

As tariffs rattle retailers in the U.S., Target Corp. TGT is showing how years of quiet supply chain maneuvering can pay off.

What Happened: During its first-quarter earnings call on Wednesday, Target highlighted its commitment to keeping entry-level price points intact, even as it braces for widespread tariff-related impact on its margins and supply chain.

“We have many levers to use in mitigating the impact of tariffs, and price is the very last resort,” CEO Brian Cornell told investors.

The company’s efforts are most prominently visible at its Bullseye’s Playground storefront, where it sells a range of seasonal and trending items, with price points of $1, $3, and $5, which the company plans to hold firm on, despite tariff-related headwinds.

This is the result of years of effort by the company in reducing its reliance on Chinese imports. “Going back to 2017, we were 60% coming out of China. We brought that down to 30%, and we are well on our way to be less than 25% by the end of next year,” Chief Commercial Officer Rick Gomez said.

Target is now sourcing across Asia, the Western Hemisphere, and even domestically. “We're also exploring opportunities here in the U.S.,” Gomez said, noting the company is working closely with vendors to “provide the best value that we can for the consumer.”

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Why It Matters: Analysts such as JPMorgan’s Christopher Horvers have raised concerns regarding the company’s rising inventory, which rose 11% year-over-year, alongside weak same-store sales, and a miss on gross margin estimates during the first quarter.

This comes as the company’s chief rival, Walmart Inc. WMT, cautioned shoppers last week that they could expect to see a rise in prices towards the end of May.

Price Action: Target shares were down 5.21% on Wednesday, trading at $93.01 per share, and down 0.35% after hours, following the company’s first quarter earnings results.

Target shares score well on Value and Growth, but are ranked poorly when it comes to Momentum and Quality. The price trend is unfavorable in the short, medium, and long terms. You can find deeper insights on the stock here.

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