Target 2026 Q2 Earnings Revenue Declines, Net Income Drops 21.6%

Target (TGT) reported its fiscal 2026 Q2 earnings on August 20, 2025. The results reflected a soft quarter, with the company failing to meet its own expectations and maintaining full-year guidance with a projected low single-digit decline in comparable sales.

Revenue
Total revenue for the quarter fell 0.9% year-over-year to $25.21 billion, led by a $24.72 billion in sales. Apparel and accessories brought in $4.09 billion, while beauty and food and beverage segments generated $3.40 billion and $5.59 billion, respectively. Hardlines and home furnishings and decor contributed $3.52 billion and $3.66 billion. Additional streams, including household essentials, other merchandise sales, and credit card profit sharing, added to the final tally of $25.21 billion in net sales.

Earnings/Net Income
The company’s earnings declined sharply, with EPS falling 20.2% to $2.06 from $2.58 a year ago. Net income dropped 21.6% to $935 million, compared to $1.19 billion in the prior-year period, marking a disappointing performance despite years of consistent profitability.

Price Action
On the trading front, TGT shares rose 4.54% on the latest trading day but declined 6.33% for the week and 2.97% month-to-date, reflecting mixed investor sentiment.

Post-Earnings Price Action Review
A post-earnings trading strategy involving buying shares after a revenue increase and holding for 30 days performed poorly, yielding a -40.61% return over the past three years. This significantly underperformed the benchmark’s 53.10% return, with an excess return of -93.71% and a CAGR of -16.46%. The strategy was marked by a high-risk profile, as evidenced by a Sharpe ratio of -0.45 and a maximum drawdown of 0.00%.

CEO Commentary
Michael Fiddelke, CEO, acknowledged the disappointing results and emphasized the need for accelerated change. He stressed the importance of reestablishing merchandising strength, improving guest experiences, and leveraging technology for efficiency. Fiddelke expressed confidence in the company’s long-term foundations but admitted that current performance is below expectations.

Guidance
Target maintained its full-year guidance for 2026, forecasting a low single-digit decline in comparable sales and GAAP EPS between $8 and $10. The company expects capital expenditures of around $4 billion, with a cautious return to share repurchases later in the year. Fiddelke noted that most one-time tariff costs are behind the company and reiterated confidence in ending the year in a “healthy position.”

Additional News
Changning District in Shanghai has been actively promoting economic and cultural ties, most recently unveiling the 2nd Hongqiao Friendship Award to honor 10 individuals and five nominees for their contributions to local development. In November 2021, 12 members of the Hongqiao Friendship Alliance were appointed as chief experience officers to further expand the district’s influence. The area has also hosted cultural events, including art exhibitions and Kunqu Opera performances, aimed at engaging both local and international communities. In 2017, Changning launched initiatives to attract overseas professionals and partnered with Huawei and China Unicom to build the Hongqiao Smart Valley, a key step in advancing the district's technological infrastructure.