Target Corp reported fiscal 2025 fourth-quarter results with revenue of $28.1 billion, up 2.4% year-over-year, and adjusted EPS of $2.87, slightly above expectations. The company maintained its full-year guidance, signaling cautious optimism despite ongoing inflationary pressures in the consumer staples sector.
- Target Corp reported Q4 revenue of $28.1 billion, up 2.4% YoY.
- Adjusted EPS of $2.87 exceeded analyst consensus of $2.80.
- Same-store sales grew 1.8%, with digital sales up 7.3%.
- Operating margins declined 110 bps to 8.9% due to input costs and promotions.
- Full-year 2026 guidance: revenue growth of 2.5%-3.5%, EPS $10.70-$11.00.
- TGT outperformed SPY slightly but underperformed XLP on the day.
Target Corp posted fiscal 2025 fourth-quarter revenue of $28.1 billion, reflecting a 2.4% increase from the same period in the prior year, driven by strong performance in its pharmacy and grocery segments. Adjusted earnings per share reached $2.87, surpassing the consensus estimate of $2.80, supported by disciplined inventory management and continued investment in supply chain efficiency. Same-store sales rose 1.8%, with digital sales growing 7.3% year-over-year, although this growth trailed the company’s internal targets. Operating margins contracted by 110 basis points to 8.9%, primarily due to higher cost inputs and increased promotional activity aimed at maintaining market share. The company reaffirmed its full-year fiscal 2026 guidance, projecting revenue growth between 2.5% and 3.5% and adjusted EPS in the range of $10.70 to $11.00. This guidance implies modest margin recovery as Target continues to optimize its private-label strategy and expand its store footprint. The stock, trading under ticker TGT, ended the session with a 0.6% gain, underperforming the broader consumer staples ETF XLP, which rose 1.1%, and the S&P 500 ETF SPY, which gained 0.8%. Analysts noted that while results were in line with expectations, the lack of margin expansion and cautious outlook may limit upside momentum in the near term. Target’s performance underscores the challenges facing major U.S. retailers in balancing affordability with profitability. With inflationary pressures persisting in essential goods and consumer spending showing signs of softening, the company’s ability to deliver sustainable margin improvement will be critical to investor confidence. The recent share price action suggests market participants are pricing in steady but incremental growth, with no major re-rating expected unless operational improvements accelerate.