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AIPROPX ReportFortune · 2h ago
Target, Starbucks and Nike are writing the 2026 turnaround playbook. Here are the key lessons
What did Target , Starbucks , and Nike have in common barely a year ago? All three consumer icons had freshly announced new CEOs, which were wrongly greeted with hasty skepticism from analysts. Target’s Michael Fiddelke was scoffed at as an uninspired insider ; Nike’s Elliott Hill was underestimated as a nostalgia hire, unable to stem Nike’s loss of market share , while questions abounded over whether Brian Niccol could actually turn around Starbucks amidst pervasive in-store service struggles, despite his sterling record at Chipotle .
We saw it differently. At the time of their appointments, we vocally and presciently touted all three new CEOs as the right person for the job at the right time , while other analysts rolled their eyes. Unlike the frequent, sometime successful model of the messianic hiring of industry outsiders as turnaround tians, these new CEOs hit the ground running as each had decades of experience in their sectors with glowing track records, priceless relationships, and balanced expertise across marketing, finance, strategy, and operations,.
Furthermore, we were the first to confidently predict the certainty of their success , even knowing that it would take some time to reposition their enterprises and for their new leadership to gain traction. Now the receipts are in, showing striking progress in all three cases, with each already well on their way to cementing their reputations as the architects of some of the most remarkable corporate turnarounds of our era.
Target – Michael Fiddelke’s stunning results despite widespread initial skepticism
When Michael Fiddelke, a Target lifer who had risen up the ranks from a lowly intern over two decades ago, was named CEO, cynics sneered that the board had chosen entrenched groupthink over fresh blood. We argued precisely the opposite —that the data overwhelmingly shows internal candidates outperform splashy external saviors, with insider CEOs appointed over the prior year delivering roughly 15% annualized shareholder returns while external hires averaged negative 9%. New brooms sweep clean, but the old broom knows the corners. Furthermore, we argued that Fiddelke was uniquely positioned to build on the many successes of his widely admired predecessor, Brian Cornell , despite simultaneous urgent challenges.
This week brought resounding vindication . Target’s second-quarter sales jumped 5.3%, digital sales grew nearly 9%, Target raised its full-year outlook for the second consecutive quarter, and the stock soared nearly 5%. Indeed, on a year to date basis, Target stock has soared nearly 60%.
A year too late, Wall Street seems to be catching on to what we said first: Bank of America declared it a “impressive improvement in sales under new leadership” while remaining somewhat wary; Morgan Stanley credited Fiddelke with “pursuing the right initiatives” as “initial newness and innovation is gaining traction,” which Telsey sees as “a strong signal that the turnaround is working.”
Behind the numbers is the simple fact that Tar-zhay is getting its verve back, as it is becoming newly cool and trendy again, ranging from buzzy partnerships from Pokémon to LoveShackFancy to Olivia Rodrigo, Isaac Mizrahi as creative director at large. We see this not only through the data, but anecdotally. Even our fashion-forward Assistant Director, Isabella Giansanti, tells us she is now back to shopping at Target and once again an avid fan, after having been disappointed by the brand for years – which we find more compelling as a barometer of where the puck is going in fashion than any data point!
That turnaround has been the product of savvy decisions from Fiddelke and his impressive leadership team. Not only did Fiddelke have the courage to launch a $2 billion investment program to refresh Target’s stores, boost service quality and improve the in-store experience for customers; Fiddelke also leaned in on building out Target’s underleveraged digital platform, driving record sales growth there alongside high-margin digital advertising revenue growth, with a newly appointed chief AI officer well positioned to continue to build on that progress, including by harnessing partnerships with Google and OpenAI.
Starbucks – astounding results from Brian Niccol’s investment in frontline workers and stores
Brian Niccol entered the company at a time when so much of its prior turnaround efforts had fallen short and new item launches fell flat. Previous CEO Howard Schultz was vocal that the chain had lost its way, publicly stating that “The stores require a maniacal focus on the customer experience, through the eyes of a merchant. The answer does not lie in data, but in the stores…focus on being experiential, not transactional”.
That is exactly the focus Niccol has adopted , as we touted he would at the time he was appointed , but now he is taking it to an even higher level. Relentlessly focused on frontline employees, Niccol unveiled an unprecedently generous incentive compensation program offering industry-leading pay and benefits, re-motivating a highly committed workforce passionate about improving the in-store experience for customers. Indeed, baristas and shift supervisors are now able to earn up to an additional $1,200 a year based on coffeehouse performance, with extended tipping options increasing what hourly partners receive by up to 8%, on top of pay packages valued at more than $30/hr on average plus comprehensive healthcare, stock awards, a paid college degree and flexible leave. Niccol has also committed to fill 90% of leadership roles from within the ranks, providing tangible pathways of career progression for the best frontline employees.
The results of Niccol’s sustained investments and commitment to his employees have been nothing short of astonishing, bearing out in financial results which have defied Wall Street consensus by miles. G...
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