It's Target's turn to feel the pain.
Nearly a year and a half after Wal-Mart said investments into its stores and employees would dramatically cut into its profits, a similar announcement from Target on Tuesday garnered the same reaction on Wall Street.
After CEO Brian Cornell outlined plans for the company to spend $7 billion in cash over the next three years — and forfeit $1 billion in annual operating profit as it lowers prices and invests in stores — the retailer's shares had their worst day since 2008.
The sell-off mimicked the one experienced by Wal-Mart in October 2015, when its stock recorded its steepest daily decline in 27 years. It also underscored how much less patient investors can be when bricks-and-mortar retailer invest in their businesses versus online players like Amazon.
Yet while investors seemed skeptical about Target's plans, punishing its shares by more than 12 percent, analysts agreed the company is making the right investments for the long term. That doesn't mean, however, that all of its lingering issues have been solved, as traffic and the grocery business remain critical headwinds for the retailer.
"What they're doing is right, but the devil of the details is always going to be in the execution," Craig Johnson, president of Customer Growth Partners, told CNBC. "The jury's still out as to whether they have a detailed plan to build back traffic."
While many of its competitors are shuttering locations, Target is dialing up its investments in its existing stores. The company plans to renovate some 600 stores over the next three years, including a more elevated presentation of its apparel offerings. Some of these stores haven't been upgraded in a decade, Cornell said.
"We can't capture that market share if we're presenting an old, tired store," the CEO said.