Target (TGT) Q4 2026 earnings summary

Executive summary

• Leadership introduced a growth-focused strategy centered on merchandising authority, guest experience, technology acceleration, and strengthening teams and communities.

• Organizational changes include updated leadership, new board members, and a focus on simplicity and speed.

• Fourth quarter net sales were $30.5 billion, down 1.5% year-over-year, with Food & Beverage, Beauty, and Toys seeing growth.

• Non-merchandise sales grew over 25%, with membership revenue more than doubling year-over-year.

• Investments target high-potential categories such as beauty, home, food, and wellness.

Financial highlights

• 2025 gross margin rate declined by 30 basis points year-over-year, mainly due to incremental tariff costs.

• Adjusted operating income and EPS grew in Q4 2025 despite a sales decline, aided by cost controls and lower inventory shrink.

• Fourth quarter GAAP EPS was $2.30, including $0.15 of non-recurring business transformation costs; Adjusted EPS was $2.44, up 1.5% year-over-year.

• Full-year GAAP EPS was $8.13 (down 8.2%); Adjusted EPS was $7.57, reflecting exclusion of legal settlement gains and transformation costs.

• Same-day delivery sales rose over 30% last year, with Target Circle 360 membership doubling.

Outlook and guidance

• Net sales expected to grow around 2% in 2026, with comparable sales up slightly and growth in every quarter.

• Operating income margin targeted at 20 basis points above 2025’s 4.6% adjusted rate.

• GAAP and adjusted EPS guidance for 2026 is $7.50–$8.50, representing 5%-6% growth over last year.

• Stronger profit growth anticipated in the back half of 2026 due to timing of investments and cost savings.

• Q1 2026 EPS expected flat to slightly up from last year's Adjusted EPS of $1.30.