Target (TGT) · Retail
Target Q1 FY2026 earnings: summary, key numbers & outlook
Results filed 20 May 2026 · Quarter ended 2 May 2026
Press release ↗Investor relations ↗
Summaries and transcripts are machine-generated and can contain errors.
In brief
First quarter net sales grew 6.7 percent over last year, with GAAP and Adjusted EPS of $1.71, 24 percent lower than prior-year GAAP EPS and 32 percent higher than prior-year Adjusted EPS.
Target's first quarter net sales were $25.4 billion, 6.7 percent higher than last year, with comparable sales up 5.6 percent. Traffic grew 4.4 percent, digital comparable sales rose 8.9 percent, and all six core merchandise categories grew. GAAP and Adjusted EPS were both $1.71. That is below last year's GAAP $2.27, which included legal settlement gains, but above last year's Adjusted $1.30.
Management raised its full-year net sales growth outlook to a range around 4 percent, two points higher than before, and expects EPS near the high end of $7.50 to $8.50. The tension is cost: SG&A rose to 21.9 percent of sales on higher pay, training and marketing, and capital spending was up 31 percent. Management calls the operating environment uncertain.
Key numbers
- Net sales · GAAP
- $25.4 billion
- Net earnings · GAAP
- $781.0M
- Diluted EPS · GAAP
- $1.71
- Adjusted diluted EPS · non-GAAP
- $1.71
- Gross margin rate · GAAP
- 29.0 percent
- Operating income · GAAP
- $1.1 billion
- Operating income margin rate · GAAP
- 4.5 percent
- Cash provided by operating activities · GAAP
- $716.0M
6.7 percent higher than last year
(24.6)%
24 percent lower than prior-year GAAP EPS
32 percent higher than prior-year Adjusted EPS
compared with 28.2 percent in 2025
a 22.9 percent decrease from prior-year GAAP operating income
compared with prior-year GAAP rate of 6.2 percent and Adjusted rate of 3.7 percent
| Segment or metric | Value | Change |
|---|---|---|
| Comparable traffic | 4.4 percent | compared with Q1 2025 |
| Digital comparable sales | 8.9 percent | |
| Food & beverage | $6,263 | vs $5,902 |
| Hardlines (Fun 101) | $3,522 | vs $3,074 |
| Household essentials | $4,570 | vs $4,357 |
| Beauty | $3,398 | vs $3,101 |
| Advertising revenue | $246 | vs $163 |
| Non-merchandise sales | 24.6 percent | increase |
Where each number comes from
- Net sales: “Net Sales of $25.4 billion in the first quarter were 6.7 percent higher than last year, reflecting a 6.4 percent increase in merchandise sales”
- Net earnings: “Provision for income taxes | 252 | 346 | (27.2) Net earnings | $781 | $1,036 | (24.6)% Basic earnings per share | $1.72 | $2.28”
- Diluted EPS: “The Company reported first quarter GAAP and Adjusted earnings per share (EPS) of $1.71, compared with prior-year GAAP EPS2 of $2.27 and Adjusted EPS of $1.30.”
- Adjusted diluted EPS: “First quarter GAAP and Adjusted EPS1 was $1.71, 24 percent lower than prior-year GAAP EPS (which included non-recurring legal settlement gains), and 32 percent higher than prior-year Adjusted EPS.”
- Gross margin rate: “First quarter gross margin rate was 29.0 percent, compared with 28.2 percent in 2025, reflecting improved productivity in supply chain facilities”
- Operating income: “First quarter operating income and Adjusted operating income3 were $1.1 billion, a 22.9 percent decrease from prior-year GAAP operating income and a 29.1 percent increase”
- Operating income margin rate: “First quarter operating income margin rate and Adjusted operating income margin rate3 were 4.5 percent in 2026, compared with the prior-year GAAP operating income margin rate of 6.2 percent”
- Cash provided by operating activities: “Accrued and other liabilities | (408) | (143) Cash provided by operating activities | 716 | 275 Investing activities Expenditures for property and equipment | (1,035) | (790)”
- Comparable traffic: “Topline strength was broad-based across merchandise categories, sales channels and across the quarter. ▪Comparable traffic grew 4.4 percent compared with Q1 2025.”
- Digital comparable sales: “Digital comparable sales grew 8.9 percent, led by more than 27% growth in same-day delivery powered by Target Circle 360.”
- Food & beverage: “Food & beverage | 6,263 | 5,902 Hardlines (Fun 101) | 3,522 | 3,074 Home furnishings & décor | 3,239 | 3,220”
- Hardlines (Fun 101): “Food & beverage | 6,263 | 5,902 Hardlines (Fun 101) | 3,522 | 3,074 Home furnishings & décor | 3,239 | 3,220”
- Household essentials: “Home furnishings & décor | 3,239 | 3,220 Household essentials | 4,570 | 4,357 Other merchandise sales | 56 | 40”
- Beauty: “Apparel & accessories | $3,846 | $3,711 Beauty | 3,398 | 3,101 Food & beverage | 6,263 | 5,902”
- Advertising revenue: “Merchandise sales | 24,894 | 23,405 Advertising revenue (a) | 246 | 163 Credit card profit sharing | 130 | 141 Other | 173 | 137”
- Non-merchandise sales: “reflecting a 6.4 percent increase in merchandise sales and a 24.6 percent increase in non-merchandise sales.”
Copied from the press release ↗ and other documents in the SEC filing ↗. A figure is published only if its sentence is in the filing.
| From the filing | Q1 FY2026 | vs year ago | vs last quarter |
|---|---|---|---|
| Revenue | $25.4B | +6.7% | −16.5% |
| Operating income | $1.1B | −22.9% | −17.8% |
| Net income | $781.0M | −24.6% | −25.3% |
| Diluted EPS | $1.71 | −24.7% | — |
| Free cash flow | -$319.0M | +38.1% | — |
| Operating margin | 4.5% | −1.7 pts | +0.0 pts |
Calculated by code from XBRL, not by the model.
Outlook
| Metric | Period | Outlook |
|---|---|---|
| Net sales growth | 2026 | a range around 4 percent |
| Operating income margin rate | 2026 | more than 20 basis points higher than the 4.6 percent Adjusted operating income margin rate in 2025 |
| GAAP and Adjusted EPS | 2026 | $7.50 to $8.50 |
Key takeaways
Sales growth was broad-based across categories and channels
Net sales in all six core merchandising categories were higher than a year ago, and comparable traffic grew 4.4 percent. Digital comparable sales grew 8.9 percent.
EPS fell year over year only because of settlements
GAAP EPS of $1.71 compares with $2.27 last year, which included $441 million of after-tax net gains on interchange fee settlements. Against prior-year Adjusted EPS of $1.30 it was 32 percent higher.
Gross margin improved but SG&A absorbed the gain
Gross margin rate rose to 29.0 percent from 28.2 percent. The SG&A expense rate was 21.9 percent versus an Adjusted 21.7 percent, on higher compensation, capital project and marketing costs.
Full-year sales outlook raised by two points
Net sales growth is now expected in a range around 4 percent, two percentage points higher than the prior range. EPS is expected near the high end of $7.50 to $8.50.
Capex surged while buybacks paused
Capital expenditures of $1.0 billion were 31 percent higher than last year, driven by new stores and remodels. The Company did not repurchase any stock, and ROIC was 12.4 percent versus 15.1 percent.
Charts
Fourth quarter worked out from the annual figure.
Data
| Q3 FY24 | $25.7B |
| Q4 FY24 | $30.9B * |
| Q1 FY25 | $23.8B |
| Q2 FY25 | $25.2B |
| Q3 FY25 | $25.3B |
| Q4 FY25 | $30.5B * |
| Q1 FY26 | $25.4B |
| Q2 FY26 | $26.5B |
Data
| Q3 FY24 | $1.85 |
| Q1 FY25 | $2.27 |
| Q2 FY25 | $2.05 |
| Q3 FY25 | $1.51 |
| Q1 FY26 | $1.71 |
| Q2 FY26 | $4.11 |
Fourth-quarter EPS appears once the press release is read; filings report it only for the full year.
Data
| Q3 FY24 | 4.6% |
| Q4 FY24 | 4.7% |
| Q1 FY25 | 6.2% |
| Q2 FY25 | 5.2% |
| Q3 FY25 | 3.8% |
| Q4 FY25 | 4.5% |
| Q1 FY26 | 4.5% |
| Q2 FY26 | 9.6% |
Data
| Q3 FY24 | $84.0M |
| Q4 FY24 | $2.4B |
| Q1 FY25 | -$515.0M |
| Q2 FY25 | $1.0B |
| Q3 FY25 | $149.0M |
| Q4 FY25 | $2.2B |
| Q1 FY26 | -$319.0M |
| Q2 FY26 | $2.4B |
Operating cash flow minus capital expenditure, from cash flow statements.
Questions
What were Target's first quarter 2026 results?
Net sales were $25.4 billion, up 6.7 percent, with comparable sales up 5.6 percent. GAAP and Adjusted EPS were both $1.71.
Why did Target's EPS fall from last year?
Prior-year GAAP EPS of $2.27 included $441 million of after-tax net gains on interchange fee settlements. Versus prior-year Adjusted EPS of $1.30, this year's $1.71 was 32 percent higher.
What is Target's updated 2026 guidance?
Net sales growth is expected in a range around 4 percent, two points above the prior range. Operating income margin rate is expected more than 20 basis points above 2025's 4.6 percent Adjusted rate, and EPS near the high end of $7.50 to $8.50.
How did Target's margins change in the quarter?
Gross margin rate rose to 29.0 percent from 28.2 percent. Operating income margin rate was 4.5 percent, versus 3.7 percent Adjusted a year ago.
How is Target using its cash?
Capital expenditures were $1.0 billion, up 31 percent, and dividends paid were $516 million. Target did not repurchase stock and had about $8.3 billion of repurchase capacity remaining.
Documents
SEC filing