Target delivered its second straight quarter of encouraging results on Wednesday, sending shares up 4% as investors warmed to signs that the retailer’s turnaround plan is finally taking hold. Net sales climbed 5.3% year-over-year, while comparable sales jumped 3.8% — blowing past Wall Street’s 2.4% estimate. The company also raised its full-year guidance, a signal that management believes the momentum is more than a one-quarter blip.
The numbers get more interesting under the hood. Target’s net income hit $1.88 billion, or $4.11 per share, roughly double the $935 million it posted a year earlier. Part of that jump came from a one-time $752 million net earnings boost tied to tariff refunds. Strip that out, and Target still raised its EPS outlook to a range of $8.25 to $9.25 for the year, up from a prior $7.50 to $8.50. Digital sales grew 8.7%, with same-day delivery up more than 25%, and food and beauty categories posted broad-based strength across all six major merchandise lines. Apparel and home remain the laggards — CEO Michael Fiddelke said the company overhauled 75% of its decorative accessories assortment and is pushing for similar changes elsewhere. Target also cut prices on more than 10,000 items and opened 17 new stores in the quarter.
For investors, the takeaway is cautious optimism rather than an all-clear signal. Two consecutive quarters of positive comparable sales after five quarters of declines is a real inflection point, but management itself is downplaying the victory lap. “Two strong quarters is not the goal,” Fiddelke told reporters, framing sustained growth as the real test ahead. Retail investors watching TGT should track whether apparel and home categories start contributing rather than dragging, since that’s where the next leg of the turnaround thesis will be proven — or disproven. With the stock still working through a multiyear rebuild, this quarter is a data point supporting patience, not a reason to chase.
