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- **Strategic Reinvestment**: 2026 CapEx increases 25% to $5B, focusing on new stores (+$1B), remodels, and tech. Q3 same-day delivery grew 35%, digital GMV up 50%.
- **Operational Progress**: In-stock rate improved 150bps in key items, but Q3 sales down 2.7% due to soft discretionary spending. 20,000 new holiday items aim to drive differentiation.
- **Financial Discipline**: Adjusted EPS $1.78 (down 4% YoY), with 2025 EPS range narrowed to $7-8. Inventory shrink improvements to add 80-90bps to GM.
- **Holiday Focus**: Thanksgiving meal deals under $20, 20,000 new items, and Gen AI-powered gift finder to enhance holiday shopping experience.

**【CEO Summary Section】**
- Brian Cornell concluded his tenure, highlighting Target's revenue growth from $30B to over $60B and EPS doubling since 2014. He emphasized Michael Fiddelke's leadership in driving the next phase of growth.
- Michael Fiddelke outlined three priorities: design-led merchandising authority, elevated guest experience, and technology-driven efficiency. He announced a 25% increase in 2026 CapEx to $5B, focusing on new stores, remodels, and tech investments.

**【CFO Financial Commentary】**
- Q3 net sales declined 1.5% YoY, with digital sales growing 2.4% (35% growth in same-day delivery). Adjusted EPS was $1.78, down 4% YoY due to top-line pressure.
- Gross margin rate of 28.2% reflected 100bps pressure from higher markdowns, offset by 70bps from lower shrink. SG&A rate was 21.9%, stable ex-transformation costs.
- 2026 CapEx planned at $5B (up $1B), supporting store expansion, remodels, and digital fulfillment. Inventory shrink improvements expected to add 80-90bps to 2025 GM.

**【Q&A Key Highlights】**
- **Investment Strategy**: Michael Fiddelke emphasized returns-driven CapEx, with new stores outperforming expectations and remodels delivering sales lifts. Tech investments in AI tools (e.g., Target Trend Brain) accelerate product development and personalization.
- **In-Stock Progress**: Q3 saw 150bps improvement in top 5,000 items (30% of sales), but guests remain cautious amid macro uncertainty. Thanksgiving meal deals and 20,000 new holiday items aim to drive engagement.
- **Holiday Outlook**: Q4 comp sales expected to decline low single digits, with volatility in discretionary categories. Gross margin rate stable, but EPS range narrowed to $7-8 due to macro risks.
- **Loyalty Program**: Target Circle 360 growth fueled same-day delivery, but card penetration lags. Plans to better align Circle data with card onboarding to improve engagement.


Target Corporation (TGT) Q3 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

TGT

TGT fundamentals

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