Target Corp. has revised its full-year guidance upward, projecting a net sales increase of approximately 5% for the current fiscal year, ending in early 2027. This represents a one-percentage-point increase from previous forecasts. The big-box retailer also raised its adjusted earnings target after second-quarter sales exceeded analyst estimates, suggesting it is overcoming a prolonged sales slump.
The improved outlook follows a third consecutive strong quarter for Target, with comparable sales growing 3.8% and beating estimates of 2.5%. This growth was primarily driven by a 3.6% rise in traffic and an 8.7% jump in digital comparable sales, largely due to increased same-day delivery options. The company's turnaround efforts, led by new CEO Michael Fiddelke, are showing positive results ahead of the critical holiday shopping season. Fiddelke noted that while some categories like apparel and home saw only modest growth, there are "green shoots of a good guest response" in areas where changes are being implemented.
Target's second-quarter profit received a significant boost from nearly $1 billion in tariff refunds, totaling $994 million pretax and contributing $1.65 per share to its GAAP and Adjusted EPS of $4.11. Excluding this one-time benefit, Target's quarterly profit of $2.46 still surpassed analyst estimates of $2.33. The company now anticipates full-year EPS, including the tariff refunds, to be between $9.90 and $10.90, compared to an earlier forecast of $7.50 to $8.50. Target has focused on strategic initiatives such as cutting prices on over 10,000 items, improving stock levels, and investing an additional $2 billion in merchandising problems to attract shoppers.
