Target Reports Strong Q1 2026 Earnings, Raises Full-Year Outlook

Target Corporation reported a 6.7% increase in net sales for the first quarter of 2026, reaching $25.4 billion. Comparable sales rose by 5.6%, marking the first positive same-store sales figure in five quarters. Earnings per share (EPS) stood at $1.71, surpassing Wall Street expectations of $1.46.

The retailer experienced growth across all six core merchandising categories, with a 4.4% increase in traffic across stores and digital platforms. Digital comparable sales grew by 8.9%, driven by same-day delivery services through Target Circle 360. Non-merchandise sales, including Roundel ad revenue, Target Circle 360 membership revenue, and the Target+ marketplace, grew nearly 25%.

CEO Michael Fiddelke stated, "Even with this early progress, we know our work is just beginning, and we have confidence we're on the right path because guests are responding in areas where we are leaning in and driving change."

Target opened seven new stores in the first fiscal quarter and has more than 100 remodel projects underway. The company raised its full-year revenue outlook, now expecting net sales growth of 4% compared to 2025, an increase of 2 percentage points from its prior outlook. It also anticipates EPS to be near the high end of the previously provided guidance range of $7.50 to $8.50.

Fiddelke noted, "Despite our updated guidance, we're maintaining a cautious outlook given the work we know we have in front of us and ongoing uncertainty in the macroeconomic environment."

For the three-month period ending May 2, Target reported a net income of $781 million, or $1.71 per share, down from $1.04 billion, or $2.27 per share, in the year-ago period. The gross margin for the first quarter was 29%, compared to Wall Street estimates of 28.7%.

The company plans to invest approximately $5 billion this year to accelerate its turnaround, focusing on supply chain improvements and store investments. For the current second fiscal quarter, Target's priorities include its largest food and beverage transition in over a decade, launching the Target Beauty Studio across more than 600 stores, and overhauling nearly 75% of decorative accessories.

Fiddelke emphasized, "We will not confuse this progress with potential. Our focus is on delivering consistent growth, not just in 2026 but for decades to come."