Target posted Q4 adjusted EPS of $2.44, beating the consensus estimate of $2.16 by 13%, though revenue of $30.45 billion narrowly missed the $30.48 billion forecast. Full-year 2025 net sales declined 1.7% to $104.8 billion as comparable sales fell 2.6%. Shares surged over 6% on earnings day as investors cheered the earnings beat and management’s guidance for a return to growth in fiscal 2026.
About Target Corporation
Target Corporation (NYSE: TGT) is a leading American big-box retailer headquartered at 1000 Nicollet Mall, Minneapolis, Minnesota. Founded in 1902 by George Dayton as the Dayton Dry Goods Company, the first Target store opened in 1962 in Roseville, Minnesota. The company rebranded from Dayton-Hudson Corporation to Target Corporation in 2000 and has since become the seventh-largest retailer in the United States.
As of January 31, 2026, Target operates 1,995 stores across the United States with approximately 250.5 million square feet of retail space. The company employs more than 400,000 team members and approximately 75% of the U.S. population lives within 10 miles of a Target store.
Target’s current market capitalization stands at approximately $54.4 billion, with a trailing twelve-month P/E ratio of around 14.77 and a dividend yield of 3.80%. The company’s shares have a 52-week range of $83.44 to $126.00. CEO Michael Fiddelke assumed the top role from Brian Cornell on February 1, 2026, with Jim Lee serving as Executive Vice President and Chief Financial Officer.
Top Financial Highlights
- Q4 net sales totaled $30.45 billion, down 1.5% year over year from $30.92 billion in Q4 2024
- Q4 GAAP diluted EPS was $2.30, compared with $2.41 in Q4 2024, a decline of 4.5%
- Q4 adjusted EPS was $2.44, beating the Zacks Consensus Estimate of $2.17 by 12.3%
- Q4 operating income was $1.38 billion, down 5.9% from $1.47 billion a year ago
- Q4 gross margin rate improved to 26.6%, up from 26.2% in Q4 2024
- Q4 net earnings were $1.046 billion, compared with $1.103 billion in the prior-year quarter
- Full-year net sales declined 1.7% to $104.78 billion from $106.57 billion
- Full-year GAAP EPS was $8.13 vs. $8.86 last year; adjusted EPS was $7.57
- Full-year operating cash flow was $6.56 billion, compared with $7.37 billion in the prior year
- Cash and cash equivalents stood at $5.49 billion, up from $4.76 billion a year ago
- Non-merchandise sales grew over 25%, with membership revenue more than doubling year over year
- Same-day delivery powered by Target Circle 360 grew over 30%
- Food and Beverage was the largest Q4 category at $6.64 billion, up from $6.52 billion
- FY2026 guidance calls for net sales growth of approximately 2% and EPS of $7.50 to $8.50
- After-tax return on invested capital (ROIC) was 13.8%, compared with 15.4% in the prior year
Beat or Miss?
Target delivered a mixed quarter with a significant earnings beat but a marginal revenue miss versus Wall Street expectations.
| Metric | Reported | Analyst Estimate | Difference |
| Adjusted EPS | $2.44 | $2.16 (LSEG) | Beat by $0.28 (+13.0%) |
| Revenue | $30.45B | $30.48B (LSEG) | Missed by $30M (-0.1%) |
| Adjusted EBITDA | $2.15B | $2.13B | Beat by $20M (+0.7%) |
| Comparable Sales | -2.50% | Approximately -2.5% (BBG) | In line |
| FY2026 EPS Guidance (midpoint) | $8.00 | $7.64 (consensus) | Above by 4.7% |
What Leadership Is Saying?
“I’m incredibly proud of how our team navigated through a challenging year in 2025, as they focused on serving our guests while positioning our business for profitable growth in 2026 and beyond. Our team is firmly focused on writing Target’s next chapter of growth, rooted in strengthening our merchandising authority, delivering an elevated and differentiated shopping experience, advancing our use of technology, and continuing to serve and invest in our team and communities.
Target saw a healthy, positive sales increase in February, serving as an important milestone on our path back to growth this year, and reinforcing my confidence in the momentum we’re building and the future we’re creating together.” – Michael Fiddelke, Chief Executive Officer, Target Corporation
“In last year’s fourth quarter, we continued to benefit from strong cost control and efficiency gains. In addition, our gross margin rate benefited from year-over-year favorability in supply chain and digital fulfillment costs, driven by strong productivity efforts. Bottom line, in Q4, the team was able to grow adjusted operating income dollars and adjusted EPS over the prior year, even on a decline in sales. I’m very confident in our ability to get back to profitable growth this year.” – Jim Lee, Executive Vice President and Chief Financial Officer, Target Corporation
Historical Performance
Target’s Q4 2025 results reflect continued softness in comparable sales after a modest positive trend in Q4 2024. Full-year 2025 marked the retailer’s 13th consecutive quarter of falling sales, a streak management aims to break in fiscal 2026.
| Category | Q4 2025 (ended Jan 31, 2026) | Q4 2024 (ended Feb 1, 2025) | Change (%) |
| Net Sales | $30.45B | $30.92B | -1.50% |
| Net Earnings | $1.046B | $1.103B | -5.20% |
| Operating Income | $1.380B | $1.467B | -5.90% |
| SG&A Expenses | $6.049B | $6.000B | 0.80% |
| Gross Margin Rate | 26.6% | 26.2% | +0.4pp |
| Diluted EPS | $2.30 | $2.41 | -4.50% |
| Comparable Sales | -2.5% | +1.5% | Reversed |
| Full-Year Comparison | FY2025 | FY2024 | Change (%) |
| Net Sales | $104.78B | $106.57B | -1.70% |
| Net Earnings | $3.705B | $4.091B | -9.40% |
| Operating Income | $5.117B | $5.566B | -8.10% |
| Operating Cash Flow | $6.562B | $7.367B | -10.90% |
| GAAP Diluted EPS | $8.13 | $8.86 | -8 |
Competitor Performance Comparison
Target’s performance can be contextualized against major retail competitors Walmart and Costco, both of which reported stronger top-line and bottom-line growth during their comparable fiscal periods.
| Category | Target Q4 FY2025 | Walmart Q4 FY2025 | Costco Q4 FY2025 |
| Revenue | $30.45B (-1.5% YoY) | $180.6B (+4.1% YoY) | $84.4B (+8.0% YoY) |
| Net Income | $1.046B (-5.2%) | $5.25B (-4.5%) | $2.61B (+10.8%) |
| EPS (Diluted) | $2.30 GAAP / $2.44 Adj | $0.65 GAAP / $0.66 Adj | $5.87 |
| Comparable Sales | -2.5% | +4.6% (Walmart U.S.) | +6.4% (adj.) |
| E-Commerce Growth | +1.9% (digital comp) | +16% global | +13.5% |
| Gross Margin Rate | 26.6% | 26.8% (WMT U.S.) | ~11.3% (Sam’s/wholesale model) |
| Operating Margin | 4.5% | 4.35% | ~3.7% |
Full-Year Comparison
| Category | Target FY2025 | Walmart FY2025 | Costco FY2025 |
| Annual Revenue | $104.78B (-1.7%) | $681.0B (+5.1%) | $269.9B (+8.1%) |
| Annual Net Income | $3.705B (-9.4%) | $20.2B | $8.099B (+9.9%) |
| Annual EPS | $8.13 GAAP | ~$2.51 GAAP | $18.21 |
| Store Count | 1,995 | ~10,600+ | 914 |
Target significantly underperformed both Walmart and Costco on comparable sales growth and revenue trajectory. Walmart’s strong e-commerce growth of 16% globally and Costco’s membership-driven model with renewal rates above 90% provided meaningful competitive advantages. However, Target’s operating margin of 4.5% remains competitive with Walmart’s 4.35%, and its gross margin of 26.6% is notably higher than both peers.
How the Market Reacted?
Target shares responded positively to the Q4 earnings report, closing up more than 6% on March 3, 2026, the day of the announcement. The stock reached a new 52-week high on the session, reflecting investor enthusiasm over the EPS beat and the constructive fiscal 2026 guidance.
The rally was notable given that Target shares had gained approximately 15.8% since the beginning of 2026, significantly outperforming the S&P 500’s 0.5% gain over the same period. Market sentiment was further boosted by CEO Michael Fiddelke’s $6 billion investment plan to revitalize the business and the announcement that February saw “healthy, positive sales growth,” potentially signaling a turning point after 13 quarters of declining sales.
