Target (TGT) investor relations material

Executive summary

• Net sales for Q2 reached $26.5 billion, up 5.3% year-over-year, with comparable sales up 3.8% and traffic up 3.6%.

• Digital comparable sales grew 8.7%, led by over 25% growth in same-day delivery.

• All six core merchandising categories posted year-over-year net sales growth, with double-digit gains in Fun 101 and high single-digit growth in Food & Beverage and Beauty.

• Operating income doubled to $2.6 billion, including a $994 million benefit from tariff refunds; excluding this, operating income grew about 19%.

• GAAP and adjusted EPS were $4.11, up 100% year-over-year, with $1.65 per share attributable to after-tax tariff refunds.

Financial highlights

• Gross margin rate was 33.7%, up from 29.0% last year, with 3.7 percentage points from $994 million in tariff refunds.

• Operating margin rate was 9.6% (up from 5.2% last year), including 3.7 points from tariff refunds.

• SG&A expense rate increased slightly to 21.6% from 21.3%, reflecting higher compensation and capital project spending.

• Net earnings for Q2 were $1.88 billion, up from $935 million last year.

• After-tax ROIC for the trailing twelve months was 15.4%, up from 14.3% a year ago.

Outlook and guidance

• Full-year net sales growth is expected to be around 5%, one point higher than prior guidance.

• Full-year operating margin rate (excluding tariff refunds) expected to be about 0.5 percentage point higher than last year’s 4.6%.

• Updated full-year EPS guidance is $9.90–$10.90, including $1.65 from tariff refunds.

• Management continues to pursue additional tariff refunds but cannot estimate timing or amount due to regulatory uncertainties.