- Target maintains its fiscal year sales outlook with an expected decline in sales by low-single digits and an adjusted EPS of $7 to $9.
- The company forecasts GAAP EPS between $8 to $10.
- In the second quarter, Target’s comparable sales dropped by 1.9%, outperforming the estimated decline of 3.02%.
- Digital sales increased by 4.3%, exceeding the estimated growth of 3.8%.
- Net sales for the second quarter reached $25.21 billion, surpassing the estimate of $24.93 billion.
- Customer transactions fell by 1.3%, compared to a 3% increase the previous year.
- Average transaction amounts slightly decreased by 0.6%, better than the expected decline of 1.13%.
- Digital sales made up 18.9% of total sales, up from 17.9% the previous year.
- The total number of stores increased to 1,982, slightly below the estimated 1,987.
- Operating margin decreased to 5.2% from 6.4% the previous year, aligning closely with the estimated 5.17%.
- SG&A expenses were $5.36 billion, slightly under the estimated $5.39 billion.
- Store comparable sales declined by 3.2%, performing better than the estimated drop of 4.01%.
- 81.1% of sales originated from stores, aligning closely with the 80.7% estimate.
- Adjusted EPS for the second quarter was $2.05, surpassing the estimate of $2.01.
- Operating income fell by 19% to $1.32 billion, slightly above the estimated $1.28 billion.
- The gross margin stood at 29%.
- EBIT and EBITDA saw declines of 19% and 12% respectively, with EBIT at $1.33 billion and EBITDA at $2.10 billion.
- Target plans to invest about $4 billion throughout the year in new stores, remodels, and enhancements to the supply chain and technology.
- Michael Fiddelke is named CEO, taking over on February 1, 2026, from Brian Cornell, who will become the executive chair of the board.
- Target expressed motivation to maintain progress and achieve growth beyond the second quarter.
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Target Corp on Smartkarma
Two recent analyst reports on Target Corporation featured on Smartkarma provide valuable insights for investors. Baptista Research‘s report titled “Target Corporation: Will Its Investments in Digital Fulfillment and Supply Chain Pay Off?” delves into the company’s challenging first-quarter conditions in 2025, highlighting a mix of positive aspects, setbacks, and strategic adjustments. With first-quarter sales declining by 2.8%, investors gain a deeper understanding of Target’s current standing and future priorities.
In another report by Baptista Research titled “Target Corporation Paving The Way Forward With Digital Future With AI,” the analyst explores Target’s roadmap for potential growth in a retail environment with both challenges and opportunities. Emphasizing a differentiated retail strategy focused on delivering on-trend, affordable products, Target aims to leverage its unique brand position in the market. Baptista Research also evaluates factors influencing the company’s price and conducts an independent valuation using a Discounted Cash Flow methodology.
A look at Target Corp Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 3 | |
| Dividend | 4 | |
| Growth | 3 | |
| Resilience | 3 | |
| Momentum | 4 | |
| OVERALL SMART SCORE | 3.4 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Target Corporation, a renowned general merchandise discount retailer, displays a promising long-term outlook based on the Smartkarma Smart Scores. With solid ratings in Dividend and Momentum, Target is positioned to provide stable returns to investors while also showing positive growth potential. Its emphasis on resilience further boosts its attractiveness, indicating the company’s ability to weather market fluctuations. While Value and Growth scores are slightly lower, Target’s overall score reflects a robust and well-rounded performance across key factors.
Target Corporation’s multifaceted operations, spanning general merchandise discount stores, food discount outlets, and an integrated online platform, showcase its adaptability to evolving consumer trends. The provision of branded credit options further diversifies its revenue streams. With balanced scores in key areas, including Dividend and Momentum, Target’s strategic positioning and operational strength suggest a favorable outlook for investors seeking a reliable and potentially growing investment opportunity.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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