Target (TGT) Q2 2025 earnings summary

Executive summary

• Q2 2024 delivered results above expectations, with total revenue of $25.5 billion, up 2.7% year-over-year, driven by a 2% comparable sales increase and 3% higher traffic across all channels.

• Digital comparable sales rose 8.7%, with same-day services and Drive Up leading growth, and all core categories saw traffic gains.

• EPS reached $2.57, up over 42% year-over-year, with operating income up 36.6% to $1.6 billion and margin rate expanding to 6.4%.

• Leadership transitions included new executive roles and a focus on developing enterprise leaders.

• Seasonal events, value-driven promotions, and loyalty program growth boosted engagement and sales.

Financial highlights

• Gross margin rate improved to 28.9%, up 190 basis points, with gains from merchandising strategies and lower inventory shrink.

• SG&A expense rate increased to 21.2%, mainly due to higher pay and benefits.

• Net earnings for Q2 were $1.19 billion, up 42.7% year-over-year.

• Net interest expense decreased to $110 million from $141 million year-over-year.

• Cash and cash equivalents stood at $3.5 billion as of quarter-end.

Outlook and guidance

• Q3 comparable sales expected to grow 0–2%, with GAAP and adjusted EPS guidance of $2.10–$2.40.

• Full-year comparable sales expected at the lower half of the 0–2% range, with EPS guidance raised to $9.00–$9.70.

• Continued investment of $3–$4 billion planned for 2024, focusing on growth, partnerships, and value offerings.