Target Q1 2026 Earnings Beat

CNBC reported Wednesday that Target posted a stronger-than-expected first quarter, lifting its annual sales forecast as shoppers began returning to its stores and digital channels.

Target Clears the Bar on Revenue and Profit

The retailer generated net sales of $25.44 billion for the quarter ending May 2. That compared to analyst expectations of $24.64 billion, according to LSEG survey data. Earnings came in at $1.71 per share, comfortably above the $1.46 consensus estimate. Net income fell to $781 million from just over $1 billion a year earlier. The revenue beat was the largest Target had recorded since November 2021.

Target same-store sales rose 5.6%, snapping a four-quarter losing streak in that closely watched metric. Overall store and digital traffic climbed 4.4% year over year. Digital comparable sales jumped 8.9%, a gain the company tied to same-day delivery through its Target Circle 360 membership program.

Background: A Retailer Fighting to Win Back Shoppers

Target has spent the past year trying to reverse a prolonged slump in foot traffic and brand loyalty. CEO Michael Fiddelke, who stepped into the top role earlier this year, has made rebuilding consumer trust and refreshing the product assortment his central priorities. The company has also leaned into higher-margin revenue streams, including its third-party Target+ marketplace and membership offerings, mirroring a strategy deployed by Walmart and Amazon.

Non-merchandise revenue surged nearly 25% in the quarter, driven by membership and marketplace growth. Gross margin reached 29%, edging past the 28.7% Wall Street had penciled in.

Outlook Raised, Caution Maintained

Target lifted its full-year net sales growth forecast to 4%, up two percentage points from its previous guidance. The company now expects earnings per share toward the upper end of its $7.50 to $8.50 guidance range. Analysts had forecast $8.14.

Fiddelke described consumer interest as resilient despite persistent macroeconomic pressures, including elevated gas prices and cautious discretionary spending. He noted particularly strong momentum in health and wellness, toys, and baby categories, with the latter accelerating sharply in the back half of the quarter.

Target opened seven new locations during the period and said more than 100 store remodel projects were underway. The company added assortment across all six core merchandise categories, recording gains in each one.

Shares ticked higher in premarket trading following the results.

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