Target Reports Q2 2025 Net Sales Decline, Eyes Recovery Amid Challenging Retail Environment

Target reports Q2 2025 net sales of $25.2bn, a 0.9% YoY decline, attributed to a 1.2% decline in merchandise sales and a 14.2% rise in non-merchandise sales. Net earnings for Q2 2025 stood at $935m, a 21.5% decline YoY, and operating income was $1.3bn, a 19.4% reduction from the previous year. The company maintains its forecast of a low-single digit decline in sales for fiscal 2025 and anticipates GAAP EPS between $8 and $10.

US retailer Target Corporation (NYSE: TGT) has released its second-quarter (Q2) 2025 financial results, showcasing a mixed performance with net sales of $25.2 billion, marking a 0.9% year-over-year (YoY) decline. The company attributed the sales drop to a 1.2% decrease in merchandise sales, partially offset by a 14.2% increase in non-merchandise sales [1].

Net earnings for Q2 2025 stood at $935 million, a 21.5% YoY decline, while operating income fell to $1.3 billion, a 19.4% reduction from the previous year. The gross margin rate decreased to 29% from 30% in Q2 2024, reflecting higher markdown rates, purchase order cancellation costs, and category mix pressures [2].

Target's adjusted earnings per share (EPS) for the quarter were $2.05, down from $2.57 in 2024, as the company managed to offset cost pressures through strong expense management and efficiency gains [1]. The company maintained its forecast of a low-single-digit sales decline for fiscal 2025, with GAAP EPS anticipated to be between $8 and $10 [2].

Significant highlights include a 4.3% growth in digital comparable sales, driven by a 25% increase in same-day delivery services, and a 14.2% rise in non-merchandise sales. These higher-margin businesses partially offset pressure in the core retail operation [3].

Target's board of directors unanimously appointed Michael Fiddelke, the company's chief operating officer, to succeed Brian Cornell as CEO, effective February 1, 2026. Cornell will transition to the role of executive chair of the board of directors [1]. This internal promotion signals continuity in strategy, with Fiddelke's financial background suggesting a continued focus on cost discipline and operational excellence [3].

References:
[1] https://www.retail-insight-network.com/news/target-q2-2025/
[2] https://www.investing.com/analysis/target-q2-earnings-cost-discipline-keeps-margins-intact-amid-tariff-headwinds-200665607
[3] https://www.stocktitan.net/news/TGT/target-corporation-reports-second-quarter-7cds3c7x9k55.html