Target reports second-quarter sales rise as merchandising overhaul drives growth
Target posted a 3.8% rise in comparable sales for the second quarter, boosted by a new merchandising strategy, store remodels and a $994 million tariff refund, and raised its full-year sales outlook.
Target said comparable sales grew 3.8% in the second quarter, marking a second consecutive quarter of increases. The retailer attributed the rebound to a merchandising overhaul launched by CEO Michael Fiddelke, who took the helm in February, and to ongoing store remodels and new product lines.
The company also benefited from a $994 million tariff refund after the U.S. Supreme Court ruled that the Trump administration had exceeded its authority. CFO Jim Lee said the refund supports Target’s continued effort to lower prices, noting that more than 10,000 items have been discounted over the past year.
Comparable store sales rose 2.7%, while digital sales surged 8.7% on the back of same-day delivery growth. Sales rose across all six major merchandising categories, led by double-digit growth in the “Fun 101” division that includes electronics, toys and gaming products.
Net income reached $1.87 billion, or $4.11 per share, well above analysts’ expectations, and net sales grew 5.3% to $26.54 billion. Target lifted its annual sales growth forecast to 5% and now projects full-year earnings per share of $9.90-$10.90, above the $8.52 consensus estimate.
Fiddelke highlighted the quarter as “an important step forward” in the company’s $6 billion turnaround plan, which includes more than 100 store remodels slated for completion this year and new fashion collaborations, such as a limited-time collection with LoveShack Fancy and a partnership with designer Isaac Mizrahi serving as creative director at large.