Target raised its full-year 2026 net sales growth forecast to around 5 percent, up from its prior guidance of approximately 4 percent, after the retailer beat second-quarter earnings expectations and reported strong comparable sales growth. The Minneapolis-based retailer reported second-quarter diluted earnings per share of $4.11, compared with $2.05 a year earlier, though the figure included $1.65 per share in benefits from tariff refunds received during the quarter.
The earnings beat was driven by broad-based strength across Target’s business. Second-quarter net sales grew 5.3 percent to $26.5 billion, with comparable sales—a key retail metric measuring sales from stores open at least 13 months plus digital channels—rising 3.8 percent. That growth was fueled by a 3.6 percent increase in comparable traffic, signaling renewed customer engagement after years of weakness.
Store comparable sales increased 2.7 percent, while digital comparable sales surged 8.7 percent, led by same-day delivery services growing more than 25 percent. Merchandise categories showed broad strength, with double-digit growth in the Fun 101 category (toys and hardlines) and high single-digit gains in food and beverage and beauty.
The company updated its full-year 2026 earnings per share guidance to a range of $9.90 to $10.90, up from prior guidance of $7.50 to $8.50. Excluding the tariff refund benefits, the midpoint of the new range reflects a $0.75 increase from the prior guidance midpoint, signaling confidence in underlying operational performance.
CEO Michael Fiddelke, who took the helm in late 2025 to lead a turnaround effort, credited the momentum to Target’s strategic initiatives. “Second quarter results build on the encouraging momentum we saw in the first quarter, giving us increasing confidence that our strategy is resonating with our guests,” Fiddelke said in the earnings release. Over the past year, Target has reduced prices on more than 10,000 frequently purchased items while investing in newness, store design, and convenience services.
The turnaround comes after Target endured 13 consecutive quarters of weak or negative comparable sales before posting its first positive comp in five quarters during the first quarter of fiscal 2026, when comparable sales rose 5.6 percent. The second-quarter results suggest that momentum is accelerating rather than fading, a critical test of whether Fiddelke’s strategy of balancing value with elevated merchandising is gaining traction.
Target’s guidance raise also reflects broader resilience in consumer spending. Retail earnings across the sector have generally beaten expectations in 2026, with consumers continuing to spend despite economic headwinds. The company noted that topline strength was broad-based across sales channels, demographics, and merchandise categories throughout the quarter, suggesting the recovery is not concentrated in any single segment.
The updated guidance assumes full-year operating income margin of around 6 percent, which includes approximately 90 basis points of benefit from the Q2 tariff refunds. Excluding those refunds, the operating margin is expected to be around 50 basis points higher than last year’s adjusted operating margin of 4.6 percent, reflecting improved operational efficiency and the benefit of higher-margin advertising and marketplace revenue.
Sources
- Target Corporation — official Q2 2026 earnings release, including net sales, comparable sales, EPS, and full-year 2026 guidance
- CNBC — Q1 2026 retail earnings context and consumer spending analysis
- Forbes — CEO Michael Fiddelke’s turnaround strategy and $6 billion investment plan
