Target (TGT) investor relations material

Executive summary

• Net sales rose 6.7% year-over-year to $25.4 billion, driven by a 5.6% increase in comparable sales, higher traffic, and strong digital and non-merchandise revenue growth, with broad-based gains across all merchandise categories and channels.

• Early momentum is attributed to refreshed strategy focusing on merchandising authority, guest experience, technology, and team strength, with new leadership roles and strategic priorities advancing execution.

• Operating income was $1.1 billion, down 22.9% from prior-year GAAP due to a one-time gain, but up 29.1% from prior-year adjusted operating income.

• GAAP and Adjusted EPS were $1.71, down 24% from prior-year GAAP EPS (which included a large legal settlement gain), but up 32% from prior-year Adjusted EPS.

Financial highlights

• Net sales reached $25.4 billion, up 6.7% year-over-year, with comparable sales up 5.6% and digital sales up 8.9%.

• Gross margin rate improved to 29.0% from 28.2% year-over-year, reflecting productivity initiatives, supply chain leverage, and higher non-merchandise revenues.

• SG&A expense rate was 21.9%, higher than last year due to the absence of prior legal settlements and increased compensation and store-related costs.

• Operating margin was 4.5%, higher than last year’s adjusted rate of 3.7%, but lower than prior-year GAAP margin.

• Net earnings for the quarter were $781 million, down from $1,036 million in Q1 2025.

Outlook and guidance

• Full-year net sales growth is expected around 4%, up two points from prior guidance, with EPS projected near the high end of the $7.50–$8.50 range.

• Operating income margin rate is projected to exceed 4.6% (2025 Adjusted), up by more than 20 basis points.

• Guidance excludes impacts from potential tariff refunds and other discrete items.

• Cost headwinds are expected to moderate in the second half of the year, with ongoing monitoring of freight and other expenses.