Target (TGT) Q3 2026 earnings summary

Executive summary

• Q3 2025 net sales were $25.3 billion, down 1.5% year-over-year, with comparable sales declining 2.7% due to softness in discretionary categories, partially offset by growth in food, beverage, and hardlines.

• Digital comparable sales rose 2.4%, driven by over 35% growth in same-day delivery and nearly 50% growth in Target Plus GMV.

• GAAP EPS was $1.51, down from $1.85 last year; Adjusted EPS was $1.78, about 4% lower year-over-year, excluding $161 million in business transformation costs.

• Operating income was $948 million, down 18.9% year-over-year, with net earnings at $689 million.

• Leadership transition and restructuring at headquarters eliminated 1,800 roles to increase agility and decision-making speed.

Financial highlights

• Gross margin rate was 28.2%, about 10 basis points lower than last year, reflecting higher markdowns and supply chain costs offset by improved supply chain productivity and advertising growth.

• SG&A expense rate increased to 21.9% due to transformation costs; excluding these, it was flat year-over-year.

• EBITDA for Q3 2025 was $1.75 billion, down 10.5% year-over-year.

• After-tax ROIC for the trailing twelve months was 13.4%, down from 15.9% a year ago.

• Net interest expense increased to $115 million, reflecting higher average debt levels.

Outlook and guidance

• Q4 expected to see a low single-digit decline in comparable sales, consistent with year-to-date trends.

• Full-year 2025 Adjusted EPS guidance narrowed to $7.00–$8.00, at the bottom half of the prior range.

• 2026 CapEx planned to increase by $1 billion (25%) to $5 billion, supporting store experience, remodels, technology, and new stores.

• Additional business transformation costs are expected in future periods, but amounts are not yet estimable.

• Management is monitoring tariffs, consumer trends, and regulatory changes that could materially impact results.