Target 2026 Q3 Earnings Net Income Drops 19.3% Amid Revenue Decline

Target (TGT) reported its fiscal 2026 Q3 earnings on Nov 26th, 2025, with total revenue falling 1.6% to $25.27 billion, below the $25.67 billion recorded in the prior-year quarter. The company’s earnings per share (EPS) and net income both declined sharply, reflecting operational challenges despite sustained profitability over two decades.

Revenue

Total revenue for Target’s 2026 Q3 decreased by 1.6% to $25.27 billion, driven by a decline in sales across multiple segments. The core sales category generated $24.75 billion, while apparel and accessories contributed $3.84 billion. Food and beverage revenue stood at $6.01 billion, and home furnishings and décor added $3.91 billion. Additional streams included $3.23 billion in beauty sales, $3.19 billion in hardlines, and $4.54 billion in household essentials. Other revenue sources, such as advertising ($241 million) and credit card profit sharing ($119 million), totaled $518 million.

Earnings/Net Income

Target’s EPS fell 18.3% to $1.52, while net income dropped 19.3% to $689 million, marking a significant decline from the $1.86 EPS and $854 million net income in 2025 Q3. The EPS and net income decline highlights challenges, though the company has maintained profitability for over 20 years.

Price Action

The stock price of Target climbed 3.60% during the latest trading day, 4.32% in the most recent full week, but tumbled 8.15% month-to-date.

Post-Earnings Price Action Review

The strategy of buying TGT when earnings beat and holding for 30 days resulted in significant underperformance, with a total return of -40.44% compared to a benchmark return of 84.71%. The strategy had a maximum drawdown of 0.00%, indicating no losses during the backtest period, but a low Sharpe ratio of -0.28 suggested poor risk-adjusted returns.

CEO Commentary

Target’s CEO emphasized resilience amid headwinds, stating, “Our team delivered strong results in Q3, maintaining profitability despite a challenging retail environment.” The CEO highlighted strategic priorities, including cost optimization and digital innovation, while expressing cautious optimism about long-term growth.

Guidance

The company did not provide specific guidance for future periods but reiterated confidence in its ability to adapt to market dynamics.

Additional News

1. Corporate Workforce Reductions: Target announced significant corporate staff cuts, incurring $115 million in severance costs and $46 million in partnership-related impairments.

2. XTX Topco Investment: XTX Topco Ltd increased its holdings in Target, reflecting institutional confidence in the retailer’s long-term prospects.

3. Dividend Boost: Target raised its quarterly dividend to $1.14 per share, up from $1.12, signaling continued commitment to shareholder returns.