Target Posts First Positive Same-Store Sales in Five Quarters

CNBC reported Wednesday that Target posted first-quarter results well above analyst forecasts and raised its full-year revenue guidance, marking an early sign of recovery for the embattled retailer. Target same-store sales climbed 5.6%, the company’s first positive reading on that metric in five quarters.

Revenue and Earnings Surpass Expectations

Target recorded net sales of $25.44 billion for the quarter ending May 2, topping the $24.64 billion consensus. Earnings per share came in at $1.71, beating the $1.46 Wall Street had anticipated. The revenue outperformance was the largest the company had delivered since November 2021. Total store and digital traffic rose 4.4% year over year. Digital comparable sales climbed 8.9%, driven largely by same-day delivery under the Target Circle 360 membership programme. Non-merchandise revenue surged nearly 25%, reflecting growth in both membership fees and the Target+ third-party marketplace.

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A Struggling Retailer Looks for a Turnaround

Target has spent the past year battling declining foot traffic, eroding brand loyalty, and a cautious consumer pulling back on discretionary spending. CEO Michael Fiddelke, who assumed the top role earlier this year, has centred his strategy on style, value, and what he described as a distinctly Target shopping experience. He told reporters that progress is visible where the company has leaned in, but acknowledged the turnaround effort is only beginning. The quarter’s net income of $781 million still fell well short of the $1.04 billion reported in the same period a year ago.

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Outlook Raised Despite Macro Caution

Target lifted its full-year net sales growth forecast to approximately 4%, up two percentage points from prior guidance. Management indicated earnings per share would land near the upper end of the existing $7.50 to $8.50 range, above the $8.14 analyst consensus. Fiddelke cautioned that the updated guidance still reflects a conservative stance given unresolved macroeconomic pressures, including elevated energy costs and broader consumer uncertainty. The company opened seven new stores in the quarter and has more than 100 remodel projects underway. Strength was broad-based across all six core merchandise categories, with health and wellness and the baby and kids segment performing particularly well. Gross margin of 29% also edged past the 28.7% estimate. Shares nudged higher in premarket trading following the announcement.

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