US retailer Target has revised its full-year net sales growth outlook upward following a 6.7% year-on-year (YoY) rise in first quarter net sales to $25.44bn.
The company now projects net sales growth of around 4% for 2026 against 2025 levels – two percentage points higher than its previous guidance range.
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Full-year operating income margin is expected to finish more than 20 basis points above the adjusted operating income margin rate of 4.6% recorded in 2025.
Target CEO Michael Fiddelke said: “As we look ahead, we are focused on staying disciplined and flexible in an uncertain operating environment and continuing to invest boldly in our team, capabilities, and an elevated guest experience to unlock our full potential over time.”
Quarterly operating income came in at $1.13bn, a 22.9% decline from the prior-year figure but a 29.1% improvement on a prior-year-adjusted basis.
Net earnings fell 24.6% to $781m during the period.
Comparable sales rose 5.6%, with comparable store sales up 4.7% and comparable digital sales increasing 8.9%.
Same-day delivery services, powered by Target Circle 360, expanded by more than 27%, driving digital sales performance.
Non-merchandise revenues climbed 24.6%, supported by growth across Roundel advertising, Target Circle 360 membership fees, and the Target+ marketplace.
Gross margin widened to 29% from 28.2% a year earlier, supported by stronger supply chain productivity, advertising and non-merchandise revenue growth, and lower markdown rates, although higher product costs partially offset these gains.
Diluted earnings per share (EPS) and adjusted diluted EPS for the quarter each stood at $1.71, compared with a prior-year EPS of $2.27 and an adjusted EPS of $1.30.
Capital expenditure rose 31% YoY to $1bn, reflecting increased investment in new store openings and store remodels.
Fiddelke added: “First quarter financial results were stronger than expected, providing encouraging early signs that our clarified strategy is resonating with our guests and driving broad-based growth across our business.”
