Company Raises Full-Year Guidance After Strongest Quarter in Recent Stretch
(UCBJ) – Target Corporation reported second-quarter 2026 earnings per share of $4.11, more than double the $2.05 posted a year earlier, as the retailer benefited from tariff refunds, stronger traffic and broad-based sales growth.
Net sales reached $26.5 billion, up 5.3 percent from the prior year, with comparable sales rising 3.8 percent on a 3.6 percent increase in traffic. Store comparable sales grew 2.7 percent while digital sales climbed 8.7 percent, led by more than 25 percent growth in same-day delivery. All six core merchandising categories posted growth, with double-digit gains in Fun 101 and high single-digit growth in Food & Beverage and Beauty.
Results included $994 million in pretax tariff refund benefits, which added $1.65 to both GAAP and Adjusted EPS. Excluding those refunds, EPS still rose 20 percent year-over-year. Operating income was $2.6 billion, up from $1.3 billion a year earlier, with an operating margin rate of 9.6 percent.
“Second quarter results build on the encouraging momentum we saw in the first quarter, giving us increasing confidence that our strategy is resonating with our guests and strengthening our leadership position in style, design, and value,” said Michael Fiddelke, Chief Executive Officer of Target. “Over the past year, we’ve reduced prices on more than 10,000 frequently purchased items as part of our commitment to delivering outstanding value every day, while continuing to invest in newness, convenience, and an elevated shopping experience. While there’s still meaningful work ahead, we’re encouraged by the progress we’re making and remain focused on executing with discipline, staying agile in a dynamic operating environment, and investing in our team and capabilities to drive sustainable, profitable growth over the long term.”
Target raised its full-year 2026 guidance, now expecting net sales growth around 5% and GAAP and Adjusted EPS between $9.90 and $10.90.
Capital expenditures totaled $1.4 billion, up 27 percent, driven by store remodels and new stores. The company paid $518 million in dividends, a 1.8 percent per-share increase, and did not repurchase stock during the quarter.
Trailing twelve-month after-tax return on invested capital was 15.4 percent, up from 14.3 percent a year earlier.
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