Target Corporation Reports Second Quarter Earnings
Contacts: John Hulbert, Investors, (612) 761-6627 Joe Poulos, Media, (612) 696-3400
Target Corporation Reports Second Quarter Earnings • Second quarter net sales grew 5.3 percent over last year, with comparable sales growth of 3.8 percent driven by a 3.6 percent increase in comparable traffic.
◦ On a two-year basis, second quarter Net Sales compounded annual growth rate was 2.1%, a 30 basis point acceleration to prior quarter.
◦ Topline strength was broad-based across sales channels, demographics, merchandise categories, and across the quarter.
▪ Store comparable sales grew 2.7 percent, and Digital comparable sales grew 8.7 percent, led by more than 25 percent growth in same-day delivery.
▪ Net sales in all six core merchandising categories grew versus a year ago with double-digit growth in Fun 101 and high single-digit growth in Food & Beverage and Beauty.
▪ The company continues to focus on a differentiated retail experience, investing in style, design, newness, and in value, having lowered prices on more than 10,000 items over the past year.
◦ Non-merchandise sales grew over 20 percent, reflecting strong growth in Roundel ad revenue, Target Circle 360 membership revenue, and the Target+ marketplace.
• Second quarter GAAP and Adjusted EPS 1 was $4.11, compared with prior-year GAAP and Adjusted EPS of $2.05, an increase of 100 percent, which included tariff refund 2 benefits of $1.65 for Q2 2026. GAAP and Adjusted EPS increased 20 percent year-over-year, excluding tariff refunds.
Target Corporation (NYSE: TGT) today announced its second quarter 2026 financial results. – more –
1Adjusted EPS, Adjusted selling, general and administrative (SG&A) expenses, Adjusted SG&A expense rate, Adjusted operating income, and Adjusted operating income margin rate, non-GAAP financial measures, exclude the impact of certain discretely managed items, when applicable. See the tables of this release for additional information. 2During the three and six months ended August 1, 2026, we recognized $994 million related to International Emergency Economic Powers Act (IEEPA) tariff refunds ("tariff refunds") received during the second quarter of 2026 as a reduction of Cost of Sales. Note (a) to the Operating Metrics table provides additional information about the impact of tariff refunds.
The Company reported second quarter GAAP and Adjusted earnings per share (EPS) of $4.11, compared with prior-year GAAP and Adjusted EPS of $2.05. Second quarter 2026 results include $994 million of pretax tariff refund benefits within gross margin and operating income. These gains contributed $752 million to net earnings and $1.65 to both GAAP and Adjusted EPS. The attached tables provide reconciliations of non-GAAP to GAAP measures. All earnings per share figures are calculated on a diluted basis.
“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.”
Given our performance through the first half of the year, the Company has the following updated expectations for 2026:
• Full-year net sales growth in a range around 5 percent, one percentage point higher than the prior guidance range.
• Full-year 2026 operating income margin rate in a range around 6 percent, including approximately 90 basis points of benefit from Q2 tariff refunds. Excluding tariff refunds, full-year operating income margin rate is expected to be in a range around 50 basis points higher than last year's Adjusted operating income margin rate of 4.6 percent.
• An updated GAAP and Adjusted EPS guidance range of $9.90 to $10.90, which includes second quarter tariff refund benefits of approximately $1.65. Excluding tariff refunds, the midpoint of the guidance range reflects a $0.75 increase versus prior guidance of $7.50 to $8.50. – more –
Net Sales of $26.5 billion in the second quarter were 5.3 percent higher than last year, reflecting a 5.0 percent increase in merchandise sales and a 20.1 percent increase in non-merchandise sales. Comparable sales grew 3.8 percent in the second quarter, reflecting a comparable store sales increase of 2.7 percent and comparable digital sales increase of 8.7 percent. Second quarter operating income, which included a $994 million benefit from tariff refunds, was $2.6 billion, compared with prior-year operating income of $1.3 billion . Operating income margin rate of 9.6 percent, which included 3.7 percentage points of benefit from the tariff refunds, increased from the prior-year operating income margin rate of 5.2 percent. Second quarter gross margin rate was 33.7 percent, reflecting 3.7 percentage points of benefit from tariff refunds. Excluding tariff refunds, second quarter gross margin rate expanded approximately 100 basis points over prior year margin rate of 29.0 percent, reflecting the comparison over last year's elevated markdowns and purchase order cancellation costs, as well as continued growth in advertising and non-merchandise sales. Second quarter SG&A expense rate was 21.6 percent, compared with prior-year SG&A expense rate of 21.3 percent. This increase reflects the impact of higher compensation costs, including additional hours for field teams and higher incentive compensation, as well as planned spending related to capital projects, partially offset by the leverage benefit of strong topline growth.
The Company’s second quarter 2026 net interest expense was $98 million, compared with $116 million last year, reflecting higher interest income in the current year.
Second quarter 2026 effective income tax rate was 23.7 percent, compared with the prior year rate of 23.2 percent reflecting higher pretax earnings partially offset by additional tax credit benefits in the current year.
Second quarter capital expenditures of $1.4 billion were 27 percent higher than last year, driven primarily by increased investments in store remodels and new stores.
The Company paid dividends of $518 million in the second quarter, compared with $509 million last year, reflecting a 1.8 percent increase in the dividend per share. – more – Target Corporation Reports Second Quarter Earnings — Page 4 of 13
The Company did not repurchase any stock in the second quarter. As of the end of the quarter, the Company had approximately $8.3 billion of remaining capacity under the repurchase program approved by Target’s Board of Directors in August 2021.
For the trailing twelve months through second quarter 2026, after-tax return on invested capital (ROIC) was 15.4 percent, compared with 14.3 percent for the trailing twelve months through second quarter 2025. The tables in this release provide additional information about the Company’s ROIC calculation.
Target will webcast its second quarter earnings conference call at 7:00 a.m. CT today. Investors and the media are invited to listen to the meeting at Corporate.Target.com/Investors (click on “Q2 2026 Target Corporation Earnings Conference Call” under “Events & Presentations”). A replay of the webcast will be provided when available. The replay number is 1-800-365-2419.
Statements in this release regarding the Company’s future financial performance, including its fiscal 2026 full-year guidance and strategic plans, are forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties which could cause the Company’s results to differ materially. The most important risks and uncertainties are described in Item 1A of the Company’s Form 10-K for the fiscal year ended January 31, 2026. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update any forward-looking statement.
Target Corporation (NYSE: TGT) brings together style, design and value to offer a distinct assortment and elevated shopping experience across more than 2,000 U.S. stores and online. Powered by more than 400,000 team members, Target serves millions of families each week and invests in the communities where they live and work to support growth and opportunity for all. ### Target Corporation Reports Second Quarter Earnings — Page 5 of 13
Authorized 5,000,000 shares, $0.01 par value; no shares were issued or outstanding during any period presented. Target Corporation Reports Second Quarter Earnings — Page 7 of 13
(millions) Six Months August 2, (unaudited) Ended August 1, 2026 2025 ────────────────────────────────────────────────────────────────────────────── Operating activities Net earnings $ 2,658 $ 1,971 Adjustments to reconcile net earnings to cash provided by operating activities: Depreciation and 1,597 1,558 amortization Share-based compensation 154 133 expense Deferred 238 112 income taxes Noncash (gains) / -4 1 losses and other, net Changes in operating accounts: Inventory -945 -141 Other assets 22 151 Accounts 612 -1,125 payable Accrued and other 187 -302 liabilities Cash provided by 4,519 2,358 operating activities Investing activities Expenditures for property -2,404 -1,864 and equipment Other 7 11 Cash used in investing -2,397 -1,853 activities Financing activities Additions to long-term — 1,984 debt Reductions of long-term -1,070 -1,571 debt Dividends -1,034 -1,019 paid Repurchase -3 -258 of stock Shares withheld for taxes on -92 -62 share-based compensation Cash used in financing -2,199 -926 activities Net decrease in cash and -77 -421 cash equivalents Cash and cash equivalents 5,488 4,762 at beginning of period Cash and cash equivalents $ 5,411 $ 4,341 at end of period
(a) Primarily represents revenue related to advertising services provided via the Company's Roundel digital advertising business offering. Roundel services are classified as either Net Sales or as a reduction of Cost of Sales or Selling, General, and Administrative (SG&A) Expenses, depending on the nature of the advertising arrangement. Target Corporation Reports Second Quarter Earnings — Page 9 of 13
Note: Gross margin is calculated as Net Sales less Cost of Sales. All rates are calculated by dividing the applicable amount by Net Sales.
(a) For the three and six months ended August 1, 2026, gross margin, Operating income, and Adjusted operating income include a $994 million benefit from tariff refunds received during the second quarter of 2026, which are classified as a reduction of Cost of Sales. Tariff refunds provided 3.7 and 1.9 percentage points of benefit to Gross margin rate, Operating income margin rate, and Adjusted operating income margin rate for the three and six month periods, respectively.
(b) Adjusted SG&A expenses, Adjusted SG&A expense rate, Adjusted operating income, and Adjusted operating income margin rate, which are non-GAAP measures, exclude the impact of certain items. Management believes that these measures are useful in providing period-to-period comparisons of the results of our operations. The Reconciliation of Non-GAAP Financial Measures tables provide additional information. Target Corporation Reports Second Quarter Earnings — Page 10 of 13
Comparable sales include all Merchandise Sales, except sales from stores open less than 13 months or that have been closed. Digitally originated sales include all Merchandise Sales initiated through mobile applications and the Company's websites.
Note: Merchandise Sales fulfilled by stores include in-store purchases and digitally originated sales fulfilled by shipping merchandise from stores to guests, Order Pickup, Drive Up, and Same Day Delivery.
(a) In thousands; reflects total square feet less office, supply chain facility, and vacant space. Target Corporation Reports Second Quarter Earnings — Page 11 of 13
To provide additional transparency, the Company has disclosed non-GAAP adjusted diluted earnings per share (Adjusted EPS), adjusted SG&A expenses, adjusted SG&A expense rate, adjusted operating income, and adjusted operating income margin rate. When applicable, these measures exclude certain discretely managed items. Management believes this information is useful in providing period-to-period comparisons of the results of Target's operations. These measures are not in accordance with, or an alternative to, generally accepted accounting principles in the United States (GAAP). The most comparable GAAP measures are diluted earnings per share, SG&A expenses, SG&A expense rate, operating income, and operating income margin rate. Adjusted EPS, Adjusted SG&A expenses, Adjusted SG&A expense rate, Adjusted operating income, and Adjusted operating income margin rate should not be considered in isolation or as a substitution for analysis of Target's results as reported in accordance with GAAP. Other companies may calculate these measures differently, or not provide similar measures, limiting the usefulness of the measures for comparisons with other companies.
(a) Includes gains, net of legal fees, related to settlements during the first quarter of 2025 of credit card interchange fee litigation matters in which the Company was a plaintiff. The adjustment removes the favorable impact of the settlement gains from prior-year EPS, SG&A expenses and Operating income.
(b) Note (a) to the Operating Metrics tables provides information about the impact of tariff refunds on Operating income and Operating income margin rate. Target Corporation Reports Second Quarter Earnings — Page 12 of 13 We have also disclosed after-tax ROIC, which is a ratio based on GAAP information, with the exception of the add-back of operating lease interest to operating income. We believe this metric is useful in assessing the effectiveness of our capital allocation over time. Other companies may calculate ROIC differently, limiting the usefulness of the measure for comparisons with other companies.
(a) Represents the add-back to operating income driven by the hypothetical interest expense we would incur if the property under our operating leases was owned or accounted for under finance leases. Calculated using the discount rate for each lease and recorded as a component of rent expense within Operating Income. Operating lease interest is added back to Operating Income in the ROIC calculation to control for differences in capital structure between us and our competitors.
(b) Calculated using the effective tax rates, which were 22.4 percent and 22.9 percent for the trailing twelve months ended August 1, 2026, and August 2, 2025, respectively. For the twelve months ended August 1, 2026, and August 2, 2025, includes tax effect of $1.4 billion and $1.3 billion, respectively, related to EBIT, and $39 million and $38 million, respectively, related to operating lease interest.
(c) Total short-term and long-term operating lease liabilities included within Accrued and Other Current Liabilities and Noncurrent Operating Lease Liabilities, respectively.
(d) Average based on the invested capital at the end of the current period and the invested capital at the end of the comparable prior period.
(e) For the trailing twelve months ended August 1, 2026, includes the impact of tariff refunds, which increased after-tax ROIC by 2.4 percentage points, and business transformation costs incurred in the trailing twelve-month period, which decreased after-tax ROIC by 0.6 percentage points. For the trailing twelve months ended August 2, 2025, includes the impact of after-tax net gains on interchange fee settlements, which increased after-tax ROIC by 1.4 percentage points. Target Corporation Reports Second Quarter Earnings — Page 13 of 13 2026 GAAP EPS, SG&A expenses, SG&A expense rate, operating income, and operating (income) margin rate may include the impact of certain discrete items, which may be excluded in calculating Adjusted EPS, Adjusted SG&A expenses, Adjusted SG&A expense rate, Adjusted operating income, and Adjusted operating income margin rate. The guidance does not currently reflect any such discrete items, which are subject to variability and therefore cannot be reconciled without unreasonable efforts. In the past, these items have included both gains and losses, including certain asset impairments, severance, and other items that are discretely managed.
Reconciliation of Non-GAAP Adjusted EPS Guidance (per share) (unaudited) Full Year 2026 GAAP diluted earnings per share guidance $9.90 - $10.90 Estimated adjustments Other Adjusted diluted earnings per share $9.90 - $10.90 guidance
Note: The guidance includes second quarter tariff refund benefits of approximately $1.65, but excludes any potential future refunds.
Full text with the tables
Exhibit 99
FOR IMMEDIATE RELEASE
Contacts: John Hulbert, Investors, (612) 761-6627
Joe Poulos, Media, (612) 696-3400
Target Corporation Reports Second Quarter Earnings
• Second quarter net sales grew 5.3 percent over last year, with comparable
sales growth of 3.8 percent driven by a 3.6 percent increase in comparable
traffic.
◦ On a two-year basis, second quarter Net Sales compounded annual growth rate
was 2.1%, a 30 basis point acceleration to prior quarter.
◦ Topline strength was broad-based across sales channels, demographics,
merchandise categories, and across the quarter.
▪ Store comparable sales grew 2.7 percent, and Digital comparable sales grew 8.7
percent, led by more than 25 percent growth in same-day delivery.
▪ Net sales in all six core merchandising categories grew versus a year ago with
double-digit growth in Fun 101 and high single-digit growth in Food & Beverage
and Beauty.
▪ The company continues to focus on a differentiated retail experience,
investing in style, design, newness, and in value, having lowered prices on more
than 10,000 items over the past year.
◦ Non-merchandise sales grew over 20 percent, reflecting strong growth in
Roundel ad revenue, Target Circle 360 membership revenue, and the Target+
marketplace.
• Second quarter GAAP and Adjusted EPS 1 was $4.11, compared with prior-year
GAAP and Adjusted EPS of $2.05, an increase of 100 percent, which included
tariff refund 2 benefits of $1.65 for Q2 2026. GAAP and Adjusted EPS increased
20 percent year-over-year, excluding tariff refunds.
For additional media materials, please visit:
https://corporate.target.com/news-features/article/2026/08/q2-2026-earnings
MINNEAPOL
IS (August 19, 2026) –
Target Corporation (NYSE: TGT) today announced its second quarter 2026 financial
results.
– more –
1Adjusted EPS, Adjusted selling, general and
administrative (SG&A) expenses, Adjusted SG&A
expense rate, Adjusted operating income, and
Adjusted operating income margin rate, non-GAAP
financial measures, exclude the impact of certain
discretely managed items, when applicable. See the
tables of this release for additional information.
2During the three and six months ended August 1,
2026, we recognized $994 million related to
International Emergency Economic Powers Act
(IEEPA) tariff refunds ("tariff refunds") received
during the second quarter of 2026 as a reduction
of Cost of Sales. Note (a) to the Operating
Metrics table provides additional information
about the impact of tariff refunds.
Target Corporation Reports Second Quarter Earnings — Page 2 of 13
The Company reported second quarter GAAP and Adjusted earnings per share (EPS)
of $4.11, compared with prior-year GAAP and Adjusted EPS of $2.05. Second
quarter 2026 results include $994 million of pretax tariff refund benefits
within gross margin and operating income. These gains contributed $752 million
to net earnings and $1.65 to both GAAP and Adjusted EPS. The attached tables
provide reconciliations of non-GAAP to GAAP measures. All earnings per share
figures are calculated on a diluted basis.
“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.”
Guidance
3
Given our performance through the first half of the year, the Company has the
following updated expectations for 2026:
• Full-year net sales growth in a range around 5 percent, one percentage point
higher than the prior guidance range.
• Full-year 2026 operating income margin rate in a range around 6 percent,
including approximately 90 basis points of benefit from Q2 tariff refunds.
Excluding tariff refunds, full-year operating income margin rate is expected to
be in a range around 50 basis points higher than last year's Adjusted operating
income margin rate of 4.6 percent.
• An updated GAAP and Adjusted EPS guidance range of $9.90 to $10.90, which
includes second quarter tariff refund benefits of approximately $1.65. Excluding
tariff refunds, the midpoint of the guidance range reflects a $0.75 increase
versus prior guidance of $7.50 to $8.50.
– more –
3The Company's guidance excludes any potential
future tariff refunds.
Target Corporation Reports Second Quarter Earnings — Page 3 of 13
Operating Results
Net Sales of $26.5 billion in the second quarter were 5.3 percent higher than
last year, reflecting a 5.0 percent increase in merchandise sales and a 20.1
percent increase in non-merchandise sales. Comparable sales grew 3.8 percent in
the second quarter, reflecting a comparable store sales increase of 2.7 percent
and comparable digital sales increase of 8.7 percent. Second quarter operating
income, which included a $994 million benefit from tariff refunds, was $2.6
billion, compared with prior-year operating income of $1.3 billion . Operating
income margin rate of 9.6 percent, which included 3.7 percentage points of
benefit from the tariff refunds, increased from the prior-year operating income
margin rate of 5.2 percent. Second quarter gross margin rate was 33.7 percent,
reflecting 3.7 percentage points of benefit from tariff refunds. Excluding
tariff refunds, second quarter gross margin rate expanded approximately 100
basis points over prior year margin rate of 29.0 percent, reflecting the
comparison over last year's elevated markdowns and purchase order cancellation
costs, as well as continued growth in advertising and non-merchandise sales.
Second quarter SG&A expense rate was 21.6 percent, compared with prior-year SG&A
expense rate of 21.3 percent. This increase reflects the impact of higher
compensation costs, including additional hours for field teams and higher
incentive compensation, as well as planned spending related to capital projects,
partially offset by the leverage benefit of strong topline growth.
Interest Expense and Taxes
The Company’s second quarter 2026 net interest expense was $98 million, compared
with $116 million last year, reflecting higher interest income in the current
year.
Second quarter 2026 effective income tax rate was 23.7 percent, compared with
the prior year rate of 23.2 percent reflecting higher pretax earnings partially
offset by additional tax credit benefits in the current year.
Capital Deployment and Return on Invested Capital
Second quarter capital expenditures of $1.4 billion were 27 percent higher than
last year, driven primarily by increased investments in store remodels and new
stores.
The Company paid dividends of $518 million in the second quarter, compared with
$509 million last year, reflecting a 1.8 percent increase in the dividend per
share.
– more –
Target Corporation Reports Second Quarter Earnings — Page 4 of 13
The Company did not repurchase any stock in the second quarter. As of the end of
the quarter, the Company had approximately $8.3 billion of remaining capacity
under the repurchase program approved by Target’s Board of Directors in August
2021.
For the trailing twelve months through second quarter 2026, after-tax return on
invested capital (ROIC) was 15.4 percent, compared with 14.3 percent for the
trailing twelve months through second quarter 2025. The tables in this release
provide additional information about the Company’s ROIC calculation.
Webcast Details
Target will webcast its second quarter earnings conference call at 7:00 a.m. CT
today. Investors and the media are invited to listen to the meeting at
Corporate.Target.com/Investors (click on “Q2 2026 Target Corporation Earnings
Conference Call” under “Events & Presentations”). A replay of the webcast will
be provided when available. The replay number is 1-800-365-2419.
Miscellaneous
Statements in this release regarding the Company’s future financial performance,
including its fiscal 2026 full-year guidance and strategic plans, are forward-
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements are subject to risks and uncertainties which
could cause the Company’s results to differ materially. The most important risks
and uncertainties are described in Item 1A of the Company’s Form 10-K for the
fiscal year ended January 31, 2026. Forward-looking statements speak only as of
the date they are made, and the Company does not undertake any obligation to
update any forward-looking statement.
About Target
Target Corporation (NYSE: TGT) brings together style, design and value to offer
a distinct assortment and elevated shopping experience across more than 2,000
U.S. stores and online. Powered by more than 400,000 team members, Target serves
millions of families each week and invests in the communities where they live
and work to support growth and opportunity for all.
###
Target Corporation Reports Second Quarter Earnings — Page 5 of 13
TARGET CORPORATION
Consolidated Statements of Operations
(m…
ex…
per
sh… Th… Au… Aug… Six Au… Aug…
da… Mo… 1, 2, Mon… 1, 2,
(u… En… 20… 2025 Ch… End… 20… 2025 Ch…
──────────────────────────────────────────────────────────────────────────────
N… $ 26… $ 25,… 5.3 % $ 51… $ 49,… 6.0 %
s…
C…
of 17… 17,… -1… 35… 35,… 1.8
s…
S…
g…
a… 5,… 5,3… 6.8 11… 9,9… 13…
a…
e…
D…
a…
a…
(…
of
d… 651 632 3.2 1,… 1,2… 3.9
i…
in
c…
of
s…
O… 2,… 1,3… 94… 3,… 2,7… 32…
i…
N…
i… 98 116 -1… 215 232 -7…
e…
N…
o…
e… 3 -17 -1… -13 -43 -7…
/
(…
E…
b… 2,… 1,2… 10… 3,… 2,6… 34…
i…
t…
P…
f… 582 283 10… 835 629 32…
i…
t…
N… $ 1,… $ 935 10… % $ 2,… $ 1,9… 34… %
e…
B…
e… $ 4.… $ 2.06 10… % $ 5.… $ 4.33 35… %
p…
s…
D…
e… $ 4.… $ 2.05 10… % $ 5.… $ 4.32 34… %
p…
s…
W…
a…
c…
s…
o…
B… 45… 454… 0.0 % 45… 454… -0… %
D… 45… 455… 0.2 % 45… 456… 0.0 %
A… 0.7 5.0 0.9 2.3
s…
D…
d… $ 1.… $ 1.14 1.8 % $ 2.… $ 2.26 1.8 %
p…
s…
Target Corporation Reports Second Quarter Earnings — Page 6 of 13
TARGET CORPORATION
Consolidated Statements of Financial Position
(millions,
except
footnotes) August 1, January 31, August 2,
(unaudited) 2026 2026 2025
──────────────────────────────────────────────────────────────────────────────
Assets
Cash and
cash $ 5,411 $ 5,488 $ 4,341
equivalen…
Inventory 13,249 12,304 12,881
Other
current 2,268 2,213 1,812
assets
Total
current 20,928 20,005 19,034
assets
Property
and 34,767 33,749 33,568
equipment,
net
Operating
lease 3,587 3,703 3,694
assets
Other
noncurrent 1,953 2,033 1,555
assets
Total $ 61,235 $ 59,490 $ 57,851
assets
Liabiliti…
and
sharehold…
investment
Accounts $ 13,306 $ 12,622 $ 12,019
payable
Accrued
and other 6,738 6,478 6,068
current
liabiliti…
Current
portion of
long-term 1,136 2,130 1,136
debt and
other
borrowings
Total
current 21,180 21,230 19,223
liabiliti…
Long-term
debt and 14,221 14,326 15,320
other
borrowings
Noncurrent
operating 3,332 3,462 3,514
lease
liabiliti…
Deferred
income 2,504 2,265 2,413
taxes
Other
noncurrent 2,155 2,042 1,961
liabiliti…
Total
noncurrent 22,212 22,095 23,208
liabiliti…
Sharehold…
investment
Common 38 38 38
stock
Additional
paid-in 7,329 7,247 7,084
capital
Retained 10,890 9,297 8,766
earnings
Accumulat…
other -414 -417 -468
comprehen…
loss
Total
sharehold… 17,843 16,165 15,420
investment
Total
liabiliti…
and $ 61,235 $ 59,490 $ 57,851
sharehold…
investment
Common Stock
Authorized 6,000,000,000 shares, $0.0833 par value; 454,291,461, 452,840,187,
and 454,396,092 shares issued and outstanding as of August 1, 2026, January 31,
2026, and August 2, 2025, respectively.
Preferred Stock
Authorized 5,000,000 shares, $0.01 par value; no shares were issued or
outstanding during any period presented.
Target Corporation Reports Second Quarter Earnings — Page 7 of 13
TARGET CORPORATION
Consolidated Statements of Cash Flows
(millions) Six Months August 2,
(unaudited) Ended August 1, 2026 2025
──────────────────────────────────────────────────────────────────────────────
Operating
activities
Net earnings $ 2,658 $ 1,971
Adjustments
to reconcile
net earnings
to
cash
provided by
operating
activities:
Depreciation
and 1,597 1,558
amortization
Share-based
compensation 154 133
expense
Deferred 238 112
income taxes
Noncash
(gains) / -4 1
losses and
other, net
Changes in
operating
accounts:
Inventory -945 -141
Other assets 22 151
Accounts 612 -1,125
payable
Accrued and
other 187 -302
liabilities
Cash
provided by 4,519 2,358
operating
activities
Investing
activities
Expenditures
for property -2,404 -1,864
and
equipment
Other 7 11
Cash used in
investing -2,397 -1,853
activities
Financing
activities
Additions to
long-term — 1,984
debt
Reductions
of long-term -1,070 -1,571
debt
Dividends -1,034 -1,019
paid
Repurchase -3 -258
of stock
Shares
withheld for
taxes on -92 -62
share-based
compensation
Cash used in
financing -2,199 -926
activities
Net decrease
in cash and -77 -421
cash
equivalents
Cash and
cash
equivalents 5,488 4,762
at beginning
of period
Cash and
cash
equivalents $ 5,411 $ 4,341
at end of
period
Target Corporation Reports Second Quarter Earnings — Page 8 of 13
TARGET CORPORATION
Operating Results
Three August Six August
Net (mill… Months August 2, Months 1, August
Sales (unau… Ended 1, 2026 2025 Ended 2026 2, 2025
──────────────────────────────────────────────────────────────────────────────
Appa…
& $ 4,090 $ 4,086 $ 7,937 $ 7,797
acce…
Beau… 3,639 3,396 7,037 6,498
Food
& 5,991 5,588 12,255 11,490
beve…
Hard…
(Fun 3,894 3,522 7,415 6,597
101)
Home
furn… 3,668 3,662 6,906 6,880
&
décor
Hous… 4,617 4,422 9,187 8,779
esse…
Other
merc… 48 43 104 83
sales
Merc… 25,947 24,719 50,841 48,124
sales
Adve… 279 217 525 379
reve…
Cred…
card 139 134 269 275
prof…
shar…
Other 174 141 347 279
Net $ 26,539 $ 25,211 $ 51,982 $ 49,057
sales
(a) Primarily represents revenue related to advertising services provided via
the Company's Roundel digital advertising business offering. Roundel services
are classified as either Net Sales or as a reduction of Cost of Sales or
Selling, General, and Administrative (SG&A) Expenses, depending on the nature of
the advertising arrangement.
Target Corporation Reports Second Quarter Earnings — Page 9 of 13
(dol…
in Three Augu… August
Ope… mill… Mont… 1, 2,
Met… (una… Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Doll… Rate Doll… Rate
Gro… $ 8,936 33.7 % $ 7,308 29.0 %
mar…
SG&A 5,725 21.6 5,359 21.3
exp…
Adj…
SG&A 5,725 21.6 5,359 21.3
exp…
Dep…
and
amo…
(ex…
of
dep… 651 2.5 632 2.5
inc…
in
cost
of
sal…
Ope… 2,560 9.6 1,317 5.2
inc…
Adj…
ope… 2,560 9.6 1,317 5.2
inc…
(dol…
in Six Augu… August
Ope… mill… Mont… 1, 2,
Met… (una… Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Doll… Rate Doll… Rate
Gro… $ 16,3… 31.4 % $ 14,026 28.6 %
mar…
SG&A 11,2… 21.7 9,950 20.3
exp…
Adj…
SG&A 11,2… 21.7 10,543 21.5
exp…
Dep…
and
amo…
(ex…
of
dep… 1,337 2.6 1,287 2.6
inc…
in
cost
of
sal…
Ope… 3,695 7.1 2,789 5.7
inc…
Adj…
ope… 3,695 7.1 2,196 4.5
inc…
Note: Gross margin is calculated as Net Sales less Cost of Sales. All rates are
calculated by dividing the applicable amount by Net Sales.
(a) For the three and six months ended August 1, 2026, gross margin, Operating
income, and Adjusted operating income include a $994 million benefit from tariff
refunds received during the second quarter of 2026, which are classified as a
reduction of Cost of Sales. Tariff refunds provided 3.7 and 1.9 percentage
points of benefit to Gross margin rate, Operating income margin rate, and
Adjusted operating income margin rate for the three and six month periods,
respectively.
(b) Adjusted SG&A expenses, Adjusted SG&A expense rate, Adjusted operating
income, and Adjusted operating income margin rate, which are non-GAAP measures,
exclude the impact of certain items. Management believes that these measures are
useful in providing period-to-period comparisons of the results of our
operations. The Reconciliation of Non-GAAP Financial Measures tables provide
additional information.
Target Corporation Reports Second Quarter Earnings — Page 10 of 13
Sales Metrics
Comparable sales include all Merchandise Sales, except sales from stores open
less than 13 months or that have been closed. Digitally originated sales include
all Merchandise Sales initiated through mobile applications and the Company's
websites.
Three Augu… Augu… Six Augu… August
Com… Mont… 1, 2, Mont… 1, 2,
Sal… (una… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Com…
sal… 3.8 % -1.9 % 4.7 % -2.8 %
cha…
Dri…
of
cha…
in
com…
sal…
Num…
of 3.6 -1.3 4.0 -1.8
tra…
(tr…
Ave…
tra… 0.2 -0.6 0.7 -1.0
amo…
Com…
Sal… Three Augu… Augu… Six Augu… August
by Mont… 1, 2, Mont… 1, 2,
Cha… (una… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Sto…
ori…
com… 2.7 % -3.2 % 3.7 % -4.4 %
sal…
cha…
Dig…
ori…
com… 8.7 4.3 8.8 4.5
sal…
cha…
Mer…
Sal… Three Augu… Augu… Six Augu… August
by Mont… 1, 2, Mont… 1, 2,
Cha… (una… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Sto… 80.4 % 81.1 % 80.1 % 80.7 %
ori…
Dig… 19.6 18.9 19.9 19.3
ori…
Tot… 100 % 100 % 100 % 100 %
Mer…
Sal…
by Three Augu… Augu… Six Augu… August
Ful… Mont… 1, 2, Mont… 1, 2,
Cha… (una… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Sto… 97.6 % 97.7 % 97.6 % 97.7 %
Oth… 2.4 2.3 2.4 2.3
Tot… 100 % 100 % 100 % 100 %
Note: Merchandise Sales fulfilled by stores include in-store purchases and
digitally originated sales fulfilled by shipping merchandise from stores to
guests, Order Pickup, Drive Up, and Same Day Delivery.
Nu…
of
St…
and
Re… Num… Aug… Jan… Aug… Ret… Aug… Janu… Aug…
Sq… of 1, 31, 2, Squ… 1, 31, 2,
Fe… (un… Sto… 2026 2026 2025 Fee… 2026 2026 2025
──────────────────────────────────────────────────────────────────────────────
17…
or
mo… 274 273 273 49,… 48,8… 48,…
sq.
ft.
50…
to
16… 1,5… 1,5… 1,5… 200… 197,… 195…
sq.
ft.
49…
or
le… 147 146 147 4,4… 4,420 4,4…
sq.
ft.
To… 2,0… 1,9… 1,9… 253… 250,… 248…
(a) In thousands; reflects total square feet less office, supply chain facility,
and vacant space.
Target Corporation Reports Second Quarter Earnings — Page 11 of 13
TARGET CORPORATION
Reconciliation of Non-GAAP Financial Measures
To provide additional transparency, the Company has disclosed non-GAAP adjusted
diluted earnings per share (Adjusted EPS), adjusted SG&A expenses, adjusted SG&A
expense rate, adjusted operating income, and adjusted operating income margin
rate. When applicable, these measures exclude certain discretely managed items.
Management believes this information is useful in providing period-to-period
comparisons of the results of Target's operations. These measures are not in
accordance with, or an alternative to, generally accepted accounting principles
in the United States (GAAP). The most comparable GAAP measures are diluted
earnings per share, SG&A expenses, SG&A expense rate, operating income, and
operating income margin rate. Adjusted EPS, Adjusted SG&A expenses, Adjusted
SG&A expense rate, Adjusted operating income, and Adjusted operating income
margin rate should not be considered in isolation or as a substitution for
analysis of Target's results as reported in accordance with GAAP. Other
companies may calculate these measures differently, or not provide similar
measures, limiting the usefulness of the measures for comparisons with other
companies.
…
…
… A… Th… Au…
… 1, Mo… 2,
… 2… En… 20…
──────────────────────────────────────────────────────────────────────────────
…
… N… Net
… Pr… of Per P… of P… C…
… T… Sh… Tax S…
…
…
…
… $ 4… $ 2.… 10… %
…
…
A… … …
1, … …
2… … …
──────────────────────────────────────────────────────────────────────────────
N… … N… P…
… of … P… of S… C…
T… T…
$ 5… $ … … %
$ — $ — $ — $ … $ … $ …
$ 5… $ … … %
… …
… …
… …
──────────────────────────────────────────────────────────────────────────────
… … … …
… … … …
… … … … … … … …
$ … … % $ … … % $ … … % $ … 5… %
… …
… …
… …
──────────────────────────────────────────────────────────────────────────────
… … … …
… … … …
… … … … … … … …
$ … … % $ … … % $ … … % $ … 5… %
— — — — $ … … % $ … -… %
$ … … % $ … … % $ … … % $ … 4… %
Note: Amounts may not foot due to rounding.
(a) Includes gains, net of legal fees, related to settlements during the first
quarter of 2025 of credit card interchange fee litigation matters in which the
Company was a plaintiff. The adjustment removes the favorable impact of the
settlement gains from prior-year EPS, SG&A expenses and Operating income.
(b) Note (a) to the Operating Metrics tables provides information about the
impact of tariff refunds on Operating income and Operating income margin rate.
Target Corporation Reports Second Quarter Earnings — Page 12 of 13
We have also disclosed after-tax ROIC, which is a ratio based on GAAP
information, with the exception of the add-back of operating lease interest to
operating income. We believe this metric is useful in assessing the
effectiveness of our capital allocation over time. Other companies may calculate
ROIC differently, limiting the usefulness of the measure for comparisons with
other companies.
After-Tax
Return on
Invested
Capital
(dollars in Trailing
millions) Twelve August 2,
(unaudited) Numerator Months August 1, 2026 2025
──────────────────────────────────────────────────────────────────────────────
Operating $ 6,024 $ 5,425
income
+ Net other 64 99
income
EBIT 6,088 5,524
+ Operating
lease 172 166
interest(a)
-Income 1,402 1,305
taxes(b)
Net operating
profit after $ 4,858 $ 4,385
taxes
August 1, August 2, August 3,
Denominator 2026 2025 2024
──────────────────────────────────────────────────────────────────────────────
Current
portion of
long-term $ 1,136 $ 1,136 $ 1,640
debt and
other
borrowings
+
Noncurrent
portion of 14,221 15,320 13,654
long-term
debt
+
Sharehold… 17,843 15,420 14,429
investment
+
Operating 3,733 3,883 3,786
lease
liabiliti…
-Cash and
cash 5,411 4,341 3,497
equivalen…
Invested $ 31,522 $ 31,418 $ 30,012
capital
Average
invested $ 31,470 $ 30,715
capital(d)
After-tax return on invested capital(e) 15.4 % 14.3 %
(a) Represents the add-back to operating income driven by the hypothetical
interest expense we would incur if the property under our operating leases was
owned or accounted for under finance leases. Calculated using the discount rate
for each lease and recorded as a component of rent expense within Operating
Income. Operating lease interest is added back to Operating Income in the ROIC
calculation to control for differences in capital structure between us and our
competitors.
(b) Calculated using the effective tax rates, which were 22.4 percent and 22.9
percent for the trailing twelve months ended August 1, 2026, and August 2, 2025,
respectively. For the twelve months ended August 1, 2026, and August 2, 2025,
includes tax effect of $1.4 billion and $1.3 billion, respectively, related to
EBIT, and $39 million and $38 million, respectively, related to operating lease
interest.
(c) Total short-term and long-term operating lease liabilities included within
Accrued and Other Current Liabilities and Noncurrent Operating Lease
Liabilities, respectively.
(d) Average based on the invested capital at the end of the current period and
the invested capital at the end of the comparable prior period.
(e) For the trailing twelve months ended August 1, 2026, includes the impact of
tariff refunds, which increased after-tax ROIC by 2.4 percentage points, and
business transformation costs incurred in the trailing twelve-month period,
which decreased after-tax ROIC by 0.6 percentage points. For the trailing twelve
months ended August 2, 2025, includes the impact of after-tax net gains on
interchange fee settlements, which increased after-tax ROIC by 1.4 percentage
points.
Target Corporation Reports Second Quarter Earnings — Page 13 of 13
2026 GAAP EPS, SG&A expenses, SG&A expense rate, operating income, and operating
(income) margin rate may include the impact of certain discrete items, which may
be excluded in calculating Adjusted EPS, Adjusted SG&A expenses, Adjusted SG&A
expense rate, Adjusted operating income, and Adjusted operating income margin
rate. The guidance does not currently reflect any such discrete items, which are
subject to variability and therefore cannot be reconciled without unreasonable
efforts. In the past, these items have included both gains and losses, including
certain asset impairments, severance, and other items that are discretely
managed.
Reconciliation of Non-GAAP
Adjusted EPS Guidance
(per share) (unaudited) Full Year 2026
GAAP diluted earnings per share guidance $9.90 - $10.90
Estimated adjustments
Other
Adjusted diluted earnings per share $9.90 - $10.90
guidance
Note: The guidance includes second quarter tariff refund benefits of
approximately $1.65, but excludes any potential future refunds.