Target (TGT) Q4 2026 earnings summary

Executive summary

• Leadership introduced a growth-focused strategy with four priorities: merchandising authority, guest experience, technology acceleration, and team/community investment.

• The largest store transformation in a decade is underway, including refreshed assortments, floor plans, and visual displays.

• Early signs of improved sales trends and positive guest feedback indicate momentum.

• Non-merchandise sales, including membership and marketplace, grew over 25%, with Target Circle 360 membership doubling.

• Food & Beverage, Beauty, and Toys saw net sales growth, while Essentials and Home improved sequentially.

Financial highlights

• $2 billion incremental investment expected in 2026, including $1 billion in CapEx and $1 billion in operating investments.

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

• Fourth quarter Adjusted EPS was $2.44, up 1.5% year-over-year; full-year Adjusted EPS was $7.57.

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

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

• Expansion of next-day delivery to 20 new metro areas and scaling of digital and fulfillment services.

• Long-term, low to mid-single-digit sales growth and operating margin expansion are expected.