Target Beats on Earnings, Shares Rise in Pre-Market

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•  03 Mar 2026
 

•   TGT  
   
  +4.90%

$TGT Target reported fiscal fourth-quarter results (ended January) that exceeded earnings expectations despite continued top-line pressure. Adjusted EPS came in at $2.44, $0.28 above the $2.16 consensus estimate. Net sales totaled $30.5 billion, down 1.5% year over year, broadly in line with forecasts.

Comparable sales declined 2.5%, reflecting a 3.9% drop in physical store sales offset by a 1.9% increase in digital revenue. The pattern suggests that while U.S. consumers remain cautious—reducing discretionary purchases such as apparel and electronics—the company preserved margin through operational efficiencies and cost discipline. The divergence between negative comps and earnings outperformance underscores margin management rather than demand acceleration as the core driver.

For full-year 2025, net sales fell 1.7% to $104.8 billion, with adjusted EPS of $7.57. This marks the third consecutive year of flat-to-declining comparable sales, reflecting persistent softness in U.S. private consumption. The structural issue is not revenue volatility but sustained traffic pressure across discretionary categories.

Shares are up approximately 2.5% in pre-market trading, even as index futures indicate roughly 2% weakness. The relative strength reflects investor focus on forward guidance. Management projects approximately 2% net sales growth in the coming year, with modest comparable sales increases each quarter. Adjusted EPS is expected in the range of $7.50 to $8.50, above prior market expectations.

Management noted that February sales already showed steady improvement, potentially signaling early stabilization in demand. Strategic priorities include reinforcing brand authority in owned and national brands, enhancing the in-store and app-based shopping experience, and expanding technology-driven inventory management and personalized marketing. For example, customers purchasing food and beverages may receive more precise in-app recommendations, increasing average basket size through data-driven cross-selling.

New CEO Michael Fiddelke, appointed in February, will host his first investor call today. He is expected to outline a strategic roadmap that includes approximately $5 billion in capital expenditures for store remodels and assortment expansion. The market will be assessing whether capital deployment can reaccelerate traffic without compressing margins, as the stock near-term resilience rests more on execution credibility than on a confirmed recovery in consumer demand.

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