Target (TGT.US) CEO issues warning: Fruit and vegetable prices are set to increase due to tariff impact.

Target (TGT.US) reported its fourth-quarter earnings on the same day that 25% tariffs on Mexico and Canada went into effect in the US, making the retail giant more in the spotlight. During Target's earnings call, CEO Brian Cornell said that consumers may see an increase in the price of agricultural products in the coming days due to new tariffs on Mexican imports. Cornell emphasized that Target and other grocers heavily rely on Mexican agricultural products during the winter, which may force the company to raise the price of fruits and vegetables as early as this week, especially strawberries, avocados, and bananas. "In these categories, we will do our best to protect the price, but consumers may see the price rise in the coming days," he said in an interview. Earlier this week, the National Retail Federation (NRF) urged the Trump administration to work with Canada and Mexico on trade issues instead of imposing tariffs. The retail group warned that "the decision to impose tariffs on our neighbors and our two largest trading partners is a significant move. Unfortunately, it will only hurt hardworking Americans and those who are trying to provide the everyday needs of their customers." NRF reminded that tariffs are just one of the tools the government uses to achieve border security. Walmart (WMT.US) and Costco (COST.US) executives also warned that consumer prices in key categories would rise unless tariffs were lifted. Target shares closed 3.0% lower on Tuesday as investors digested the earnings update and financial outlook. On Wall Street, Morgan Stanley believed the results were better than expected. Analyst Simeon Gutman said, "EPS in Q4 and guidance for 2025 were better than expected. Given the 10% decline in the stock year-to-date and concerns about consumer health, this was a decent quarter."