TLDR
- Target raised its full-year sales forecast to ~5% growth, up from 4% in May
- Q2 adjusted EPS came in at $4.11, crushing the $2.34 Wall Street estimate
- Total Q2 sales hit $26.54 billion, beating the $26.13 billion consensus
- Hardlines (toys, electronics) led category growth, up more than 10% year-over-year
- TGT stock fell roughly 2% in premarket despite the strong results
Target posted a strong fiscal second quarter on Wednesday, beating on both the top and bottom lines. Total sales rose 5.3% to $26.54 billion, ahead of the $26.13 billion analysts expected. Adjusted EPS landed at $4.11, well above the $2.34 forecast.
The stock dropped about 2% in premarket trading anyway. Sometimes that’s just how Wall Street works.
The retailer raised its full-year sales outlook for the second time this year. Target now expects roughly 5% sales growth, up from the 4% forecast issued in May and the 2% projection at the start of the year. Full-year EPS guidance was lifted to a range of $9.90 to $10.90, compared with the prior range of $7.50 to $8.50.
TARGET $TGT Q2’26 EARNINGS HIGHLIGHTS
🔹 Revenue: $26.54B (Est. $25.5B) 🟢; +5.3% YoY
🔹 Adj. EPS: $4.11 (Est. $2.30) 🟢; +100% YoY
🔹 Comparable Sales: 3.8%
🔹 Gross Margin: 33.7%; +470 bps YoYRaises FY26 Guide:
🔹 EPS: $9.90-$10.90; (Prior: $7.5 to $8.5) 🟢🔹 Net Sales: 5%… pic.twitter.com/XMLtfQDnMs
— Wall St Engine (@wallstengine) August 19, 2026
That EPS range includes a $1.65 per share benefit from tariff refunds received in the second quarter. Excluding that benefit, the mid-point of the EPS forecast would still be $0.75 higher than the prior guidance mid-point.
What Drove the Quarter
Hardlines, which covers toys and electronics, was the standout category, growing more than 10% year-over-year. Sales growth was recorded across all six of Target’s core merchandising categories, though apparel and home furnishings barely moved, each rising just a fraction of a percentage point.
Comparable sales rose 3.8%, topping estimates. Target said it cut prices on more than 10,000 items, with many of the reductions focused on back-to-school supplies. Average transaction size grew 0.2%, short of the 0.9% estimate.
Gross margin came in at 33.7%, up from 29% in the first quarter. A big chunk of that improvement came from the $1 billion tariff refund.
CEO Michael Fiddelke, who took over in February, said consumers have shown a “strong response” to merchandise refreshes and price cuts. He added there is “a lot more to come” and that the company still needs to “execute well.”
Where the Stock Stands
TGT has surged more than 51% so far in 2026, even after Wednesday’s premarket dip. That run reflects the better-than-expected fiscal first quarter and renewed confidence in Fiddelke’s turnaround plan, which includes stocking more health, wellness, and baby care products to attract younger families.
Analyst sentiment remains cautious. Only 12 of the 42 analysts covering the stock carry a Buy rating or equivalent. The average price target sits slightly below the current stock price.
Analysts at Vital Knowledge called it “a solid beat-and-raise report even excluding the large benefit from tariff refunds” and noted that “management initiatives are bearing fruit.” They also flagged that elevated expectations going into the print may explain why investors were not more impressed.
Target stock was trading at $150.11, down $2.37 in premarket Wednesday.
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