Target reported stronger-than-expected second-quarter results on Wednesday, supported by tariff refunds and improving sales trends. The retailer raised its full-year guidance as its turnaround strategy showed further progress, although executives said more work remains to achieve sustained growth.
Net sales increased 5.3% year over year, while comparable sales rose 3.8%, exceeding Wall Street expectations of 2.4%. Target said it saw broad-based strength across categories, with digital comparable sales increasing 8.7% and same-day delivery growing more than 25%.
The company’s results included a $752 million boost to net earnings, equal to $1.65 per share, from tariff refunds. The refunds also contributed to a $994 million pretax benefit in second-quarter gross margin and operating income.
Target Raises Full-Year Outlook
Target increased its full-year sales growth outlook to approximately 5%, up one percentage point from its previous guidance. The company expects full-year earnings per share, including tariff refunds, to range between $9.90 and $10.90. Excluding the refunds, adjusted EPS is expected between $8.25 and $9.25, compared with the previous forecast of $7.50 to $8.50.
For the fiscal second quarter, Target reported:
- Adjusted earnings per share: $2.46 vs. $2.33 expected
- Revenue: $26.54 billion vs. $26.14 billion expected
Net income reached $1.88 billion, or $4.11 per share, compared with $935 million, or $2.05 per share, in the prior-year period. Target shares gained 4% following the earnings report.
Retailer Focuses on Long-Term Recovery
Target said all six major categories posted growth, with food and beauty performing particularly well. However, apparel and home categories continued to lag, with executives saying improvements in those areas remain a key priority.
The company has lowered prices on more than 10,000 products and plans additional reductions as it works to attract shoppers back to stores. Target also opened 17 new locations during the quarter.
CEO Michael Fiddelke said the company views the recent results as progress toward a broader growth strategy, but emphasized that consistent long-term improvement remains the goal. Target’s stock has gained more than 55% this year.
