Target Corporation

Walmart, Target and Dollar General each booked tariff refunds as a second-quarter earnings tailwind, using the proceeds to fund price investments and customer-focused initiatives. Walmart received substantially all of its eligible tariff refunds, totaling approximately $2.9 billion, or about 0.5% of annual U.S. net sales, helping lift its second-quarter consolidated gross profit rate 96 basis points to 25.4% and contributing an approximately 750-basis-point benefit to operating income growth. Target recognized $994 million in International Emergency Economic Powers Act tariff refunds as a reduction in the cost of sales, a benefit of 3.7 percentage points to its gross margin of 33.7% and $1.65 to adjusted earnings per share, and it expects fiscal 2026 operating margin to include about 90 basis points of benefit from the second-quarter refunds. Dollar General said gross profit as a percentage of sales rose 127 basis points year over year to 32.6%, with tariff refunds contributing approximately 81 basis points after related reinvestments, while operating profit rose 29.2% to $769.2 million and adjusted earnings per share increased 33% to $2.48, including an estimated 25 cents from refunds. Dollar General received the majority of expected tariff refunds during the quarter and does not expect a material impact from refunds after reinvestments in the second half of fiscal 2026.

HSBC analyst Joe Thomas upgraded Target to Buy and raised his price target on the stock to $190 from $125 per share, citing a traffic-driven recovery. In a note Wednesday, Thomas said Target's second-quarter results support the view that a turnaround is gaining momentum, with comparable sales rising 3.8%, including a 2.7% rise in store-originated sales, while underlying profits and EPS came in around 5% ahead of consensus. He said growth was driven primarily by footfall rather than higher ticket values, indicating Target is rebuilding customer traffic without material cannibalisation of its store base. HSBC sees potential for earnings forecasts to be exceeded in the short and medium term, noting year-to-date two-year comparable sales growth of 1.7% and that its estimates require only 0.5% two-year growth in the second half to deliver full-year assumptions. The bank's valuation is based on an 18x multiple applied to its revised FY27e EPS estimate of $10.61, in line with Target's five-year average historical PE multiple.

Costco Wholesale Corporation reported U.S. comparable sales growth of 10.7% year over year in the fourth quarter of fiscal 2026, outpacing its overall comparable sales growth of 9.4%. Adjusted U.S. comparable sales, excluding gasoline prices and foreign exchange, rose 7.2%, with U.S. comparable traffic up 3.2% and the average ticket up 7.3%; on an adjusted basis, traffic growth held at 3.2% while adjusted ticket growth was 3.9%. Management said member spending remained resilient, with adjusted comparable sales excluding gas and foreign exchange consistently running in the 6%-7% range, and named nonfood as the strongest-performing category. The company also implemented price reductions on select everyday items as part of efforts to return value to members following tariff refunds. Separately, Walmart U.S. comp sales rose 2.6% in the second quarter of fiscal 2027 on a 1.5% increase in transactions and a 1.1% rise in average ticket, with U.S. e-commerce sales up 24%, while Target posted comparable sales growth of 3.8% in the second quarter of fiscal 2026 on a 3.6% increase in comparable traffic and an 8.7% rise in digital comparable sales.

Costco Wholesale Corporation received $184 million related to International Emergency Economic Powers Act tariffs in the fourth quarter of fiscal 2026, comprising $174 million of refunds and $10 million of interest, which management said represented a little more than one-third of the total refunds expected. The tariff refunds, net of partial reinvestment in member value, contributed a nonrecurring benefit of 15 cents per share in the quarter; excluding that benefit, net income and earnings per share rose 12.3% and 12.4%, respectively, while refunds and related reinvestment added nine basis points to gross margin. Costco intends to reinvest the majority of future refunds in increased member value, primarily through lower prices, after directing fourth-quarter investments into produce, meat, beverages, home furnishings and hardware. Walmart Inc. said tariff refunds lifted gross profit and operating income in the second quarter of fiscal 2027, with operating income receiving an approximately 750-basis-point net benefit after price investments, while Target Corporation recognized $994 million of pretax tariff refunds in its second-quarter fiscal 2026, adding $752 million to net earnings and $1.65 to earnings per share and contributing 3.7 percentage points to both gross margin and operating margin. Costco's forward 12-month price-to-earnings ratio stands at 40.59 versus the industry's 27.39, and the Zacks Consensus Estimate for current fiscal-year earnings has risen 7 cents to $22.57 per share, with next fiscal year up 25 cents to $24.71 per share.

Walmart, Target and Dollar General are each expanding their retail media operations, combining digital advertising, customer data, e-commerce and physical stores, though each is taking a different route to scale these higher-margin businesses. Walmart's global advertising business grew 38% in the second quarter of fiscal 2027, with Walmart U.S. advertising, including VIZIO, also up 38%, while Walmart Connect rose 43%; the company is widening its addressable market through the acquisition of Vibe, which offers self-service tools for advertisers of different sizes. Target is leaning on Roundel, where gross billings increased nearly 20% in the second quarter of 2026, and reported $279 million in quarterly advertising revenues, up from $217 million a year earlier, with first-half advertising revenues rising to $525 million from $379 million as non-merchandise sales grew 20.1%. Dollar General is broadening DG Media Network across on-site, off-site and in-store channels; the network had reached about $170 million in annual volume at the end of last year, and management expects it to grow meaningfully, with planned subscription and loyalty pilots supporting deeper digital engagement. The common thread is deeper customer engagement, creating more touchpoints through which advertisers can reach shoppers.

Target has launched its national Beauty Studio concept, bringing hundreds of new prestige and global beauty brands into more than 600 stores and Target.com. The rollout adds U.S. exclusive beauty partnerships and pulls in labels including dpHUE, VT Cosmetics, Hair Syrup, Diane Perfect Beauty, SUNGBOON EDITOR and Milk Touch, pushing the retailer further into premium beauty and Korean and Japanese skincare. Alongside the beauty push, Target expanded its food assortment with Coast to Coast Kitchen, Wild Alaskan Company and Amylu Foods, and added home-care brand The Laundress. The company said the moves are aimed at younger and more premium shoppers, fitting a broader effort to keep customers engaged across multiple trips and categories. Investors will watch whether Target discloses sustained strength in beauty, food and home care contribution in upcoming quarterly updates, including traffic from Millennials and younger shoppers.

Target Corporation now expects its underlying operating profitability for fiscal 2026 to finish above last year's level, guiding to a full-year operating income margin rate, excluding tariff refunds, around 50 basis points above the 2025 adjusted operating margin rate of 4.6%, an upgrade from its earlier guidance of more than 20 basis points above the year-ago level. Including the approximately 90-basis-point benefit from second-quarter tariff refunds, Target foresees a fiscal 2026 operating margin rate in a range around 6%. The company booked $994 million in pretax tariff refunds during the quarter, which lifted its second-quarter operating margin rate to 9.6% from 5.2% a year earlier; tariff refunds added 3.7 percentage points to that quarterly margin, but even without the benefit the operating margin rate was approximately 70 basis points higher year over year. Gross margin also strengthened, with the second-quarter gross margin rate expanding about 100 basis points from the prior-year rate of 29% excluding tariff refunds, helped by a comparison against last year's elevated markdowns and purchase-order cancellation costs and by continued growth in advertising and other non-merchandise revenues. The improvement came despite expense pressure, as Target's SG&A rate rose about 30 basis points to 21.6% on higher compensation costs and planned spending tied to capital projects.

Target confirmed on Sept. 15 that it will hold its latest Target Circle Deal Days on Oct. 6-7, a two-day sale rewarding members of the free Target Circle loyalty program. The event offers 40% off thousands of items spanning apparel, kitchen gadgets, home decor, toys, beauty and tech, with early access beginning Oct. 5 for members of the paid Target Circle 360 tier. Highlights include 40% off select family clothing from brands like Cat & Jack and Goodfellow, up to 40% off Dyson vacuums and holiday decor, 30% off Threshold furniture, up to 65% off Vera Bradley, and 30% off select skincare, haircare and cosmetics. New members who join between Sept. 27 and Oct. 5 get 15% off their first purchase, those who sign up for an annual Circle 360 membership between Sept. 27 and Oct. 10 receive $50 in Target Circle Rewards, and shoppers approved for a Target Circle Card in that window can earn $75 in rewards. The push follows second-quarter results showing net sales up 5.3% year over year to $26.5 billion and comparable sales up 3.8%, though Bank of America analyst Christopher Nardone said he remains wary about the durability of the comp-sales trend.

Target is rated Zacks Rank #2 (Buy), with the consensus estimate for the current quarter rising 8.5% over the last 30 days to $2.05 per share, a year-over-year change of +15.2%. The consensus earnings estimate of $10.43 for the current fiscal year indicates a year-over-year change of +37.8% and has changed +5% over the last 30 days, while the next fiscal year's consensus estimate of $9.38 indicates a change of -10% and has changed +4.2% over the past month. For the current quarter, the consensus sales estimate of $26.32 billion indicates a year-over-year change of +4.2%, and for the current and next fiscal years, $109.81 billion and $113.24 billion estimates indicate +4.8% and +3.1% changes, respectively. Target reported revenues of $26.54 billion in the last reported quarter, a year-over-year change of +5.3%, with EPS of $2.46 versus $2.05 a year ago, beating the Zacks Consensus Estimate of $26.13 billion by a revenue surprise of +1.57% and an EPS surprise of +6.96%. The company beat consensus EPS estimates in each of the trailing four quarters and topped consensus revenue estimates two times over this period, and it is graded B on the Zacks Value Style Score, indicating it is trading at a discount to its peers.

Analysts raised their fair value estimate for Target from about US$133.84 to roughly US$162.76, an increase of around 22%, following a wave of higher price targets across Wall Street after Q2 results. Wells Fargo, UBS, Guggenheim, DA Davidson, and Gordon Haskett lifted their price targets into the US$175 to US$200 range, citing improved comps and a turnaround in store traffic and merchandising, while RBC Capital, Telsey Advisory, and Jefferies pointed to Target's merchandising reset and category strength in Food, Beauty, and Baby. Oppenheimer, Mizuho, and Wolfe Research emphasized management changes, a cultural shift toward faster execution, and store remodels as signs the recovery is gaining traction beyond a single quarter. On the cautious side, BofA, Barclays, and Deutsche Bank kept more conservative ratings even after raising targets, flagging apparel and home as execution risks, and Roth Capital and Piper Sandler cited decelerating trends in some categories, slower high-margin ad revenue, and lagging digital growth versus Amazon and Walmart. The revised fair value estimate assumes revenue growth of roughly 3.37%, up from about 2.97%, a profit margin of about 3.83% versus roughly 3.59%, a future P/E multiple of roughly 20.0x versus about 18.0x, and a discount rate of roughly 7.38% versus about 7.34%.

Target Corporation announced that Mark Weinstein has joined the company as chief marketing and guest experience officer, effective immediately. Weinstein reports directly to Target chief executive officer Michael Fiddelke and will help lead the company's growth strategy by elevating how consumers experience and connect with the Target brand. He joins Target from Hilton, where he served as global chief marketing officer for all 28 brands and Hilton Honors, as well as head of luxury brands. At Target, Weinstein will shape a more connected experience across all the ways people engage with the brand, from discovery and shopping to how Target shows up in culture and communities, and he will oversee Roundel, Target's retail media network, and Target+, its highly curated marketplace. Target operates more than 2,000 U.S. stores and online, powered by more than 400,000 team members.

Target Corporation's stores handled fulfillment for 97.6% of merchandise sales in its second-quarter fiscal 2026 results, well above the 80.4% of merchandise sales that originated in stores. Digitally originated sales accounted for 19.6% of merchandise sales, up from 18.9% a year earlier, while comparable digital sales rose 8.7% and same-day delivery grew more than 25%. Target fulfilled nearly 30% more same-day and next-day units than in the prior-year period. The retailer opened 17 new stores in the second quarter, bringing its first-half fiscal 2026 total to 24 new locations, and advanced more than 100 store remodels. The Zacks Consensus Estimate for Target's earnings per share for the current and next fiscal year has increased by $2.01 and 41 cents to $10.43 and $9.36, respectively, over the past 30 days, and the company currently carries a Zacks Rank #2 (Buy).

A year after moving production and sourcing out of China to avoid higher U.S. tariffs, some companies are bringing manufacturing back, finding that replicating China's factory ecosystem abroad is harder than expected. Heather Kuang, vice president of family-owned metal casting company Dawang Metals in Dandong, said a major U.S. agricultural machinery customer that shifted some orders to India has since returned with new orders after running into problems there, and Dawang abandoned its own plan to move production offshore. U.S. retailer Target has moved some orders back to Chinese suppliers, citing supply-chain disruptions and production constraints, according to two people familiar with the matter, while Chinese fast-fashion retailer Shein is scaling back some operations in Vietnam. Hangzhou outdoor furniture exporter Jin Chaofeng said he shut a workshop in Ho Chi Minh City that he opened in 2024 and moved production back to China this year after struggling to find equipment and basic items such as screws and moulds. The reversal comes as China faced an effective U.S. tariff rate of about 20%, compared with 6.1% for Vietnam, 13.4% for Indonesia and 4.5% for Thailand, according to Economist Intelligence Unit estimates in July, though that advantage has narrowed as Washington extended tariffs to a wider range of countries. The shifts are unfolding ahead of an expected meeting between President Donald Trump and Chinese President Xi Jinping this month, which businesses will watch for clarity on a proposed mechanism to lower barriers on some non-sensitive goods.

Jim Cramer said on CNBC's Squawk on the Street that rising diesel prices amount to a 25% surtax on everything Americans buy, one Congress never voted on. Walmart CFO John David Rainey told analysts on the August 20 call that the company now expects more than $2 billion of incremental fuel-related costs this year above and beyond its original guidance assumptions, and warned of a psychological impact once fuel prices rise above $4. McDonald's CFO Ian Borden cited continued inflationary pressures on food, paper and labor, and said the company pushed its 50,000-restaurant target from 2027 to 2028 as development costs climbed. McDonald's is down 15.58% year to date, Walmart is off 6.43% in the past month, and the XLY consumer discretionary ETF is down 6.11% in the past month, while Target is up 63.63% year to date on a Q2 that included a $994 million pretax IEEPA tariff refund contributing $1.65 to EPS. Cramer conceded the consumer has a job and wages are running slightly ahead of inflation, but treats that cushion as temporary, and the University of Michigan index sat at 55.2 in July, still below the 60 line flagged as recessionary.

Target declared a quarterly dividend of $1.16 per share, a 1.8% increase from the prior year that keeps its 50-year dividend streak intact. The raise matches the 1.8% pattern of the prior three quarters, a sharp step down from the increase from $0.68 to $0.90 in 2021 and from $0.90 to $1.08 in 2022. FY2026 operating cash flow fell to $6.562 billion, down 10.93%, while capital expenditure jumped 28.92% for remodels, and management said it is moving toward a 40% payout ratio over time. The company is a national general merchandiser contending with mass discounters and e-commerce on traffic, markdowns and inventory turns. Investors will watch the June 2027 announcement for either a mid-single-digit raise or another 1.8% token increase.

Wild Alaskan Company announced a nationwide retail partnership with Target, bringing a curated lineup of five wild-caught Alaskan seafood products to stores across the country starting today and rolling out over the coming weeks. The five-SKU lineup, drawn from the brand's more than 30 products, includes Pink Salmon, Sockeye Salmon with Lemon & Herb Butter, Wild Alaska Pollock Fillets, Wild Alaska Pollock Quick Cuts, and Sablefish, also known as Black Cod, with selection varying by location. Each item is 100 percent wild-caught, sustainably harvested in Alaska, frozen at peak freshness, and delivers 14 to 23 grams of protein per serving. The launch extends the company's direct-to-consumer subscription model and its existing presence on Target Plus, and coincides with Target's growing expansion into health and wellness. Founder and CEO Arron Kallenberg said the partnership gives the company another powerful way to make premium, wild-caught seafood more accessible as an everyday protein, while Emily Buckley, SVP of Brand and Innovation, said Target was the right retail partner to seize the opportunity.

Moderna's stock surged as much as 160% after the company announced positive Phase 3 trial results for its mRNA-based personalized cancer vaccine, which significantly reduced the risk of melanoma recurrence in over 1,100 patients when combined with Merck's Keytruda. The trial was stopped early because the efficacy was so high that standard medical ethics required allowing control-group patients access to the treatment. Despite the jump, shares remain below previous highs, and analysts caution that scaling and pricing questions remain. Meanwhile, Target reported a 5.3% sales increase and a 100% jump in earnings per share, though much of that came from a one-time $994 million tariff refund. The company's digital sales grew 8.7%, and same-day deliveries rose 25%, but analysts question whether the turnaround can sustain the stock's 60% year-to-date gain. In AI news, OpenAI's 18% quarterly growth disappointed investors, while Anthropic more than doubled revenue, and both companies are racing toward IPOs.

Target Corporation reported second-quarter fiscal 2026 results showing a 20.1% surge in non-merchandise sales, which outpaced a 5% gain in merchandise sales, as total net sales grew 5.3% year over year to $26,539 million. The growth was driven by expansion in Roundel advertising, Target Circle 360 membership revenues, and the Target+ marketplace, with Roundel gross billings rising nearly 20%, and both Target+ gross merchandise value and Target Circle 360 membership revenues climbing more than 40%. Advertising revenues jumped to $279 million from $217 million a year earlier, while other revenues increased to $174 million from $141 million, and credit card profit sharing edged up to $139 million from $134 million. Target's shares have rallied 32.7% over the past three months, outperforming the industry's 3.6% decline, and the company carries a Zacks Rank #2 (Buy).

Target has launched Target Beauty Studio, a new in-store and online specialty beauty destination featuring over 1,600 products from 90 brands, most of which are new to Target shoppers. The assortment includes prestige, emerging, and global beauty labels, and the studio offers curated experiences, personalized guidance from Beauty Advisors, and exclusive customer engagement programs. The launch expands Target's presence in beauty and positions the retailer as a specialty beauty destination. Target Beauty Studio will be available in more than 600 stores and online, deepening Target's reach into higher price point categories. Investors should watch upcoming quarterly results for disclosures on traffic, basket size, and attachment of Beauty Studio products to core categories, as well as store count and brand additions.

Target Corporation reported an 8.7% increase in comparable digital sales for the second quarter of fiscal 2026, with same-day delivery surging more than 25%. The retailer's stores now serve as fulfillment hubs for over 95% of sales, and it fulfilled nearly 30% more same-day and next-day units than a year earlier. Target's shares have rallied 30.6% over the past three months, outperforming the industry's 0.4% growth, while its forward price-to-earnings ratio stands at 17.15, below the industry's 29.99. The Zacks Consensus Estimate for current-year earnings per share has risen by 81 cents to $10.42 over the past week, and Target carries a Zacks Rank #2 (Buy).

Target Corporation reported its second straight quarter of comparable sales gains, with a $994 million tariff refund contributing meaningfully to a profit beat, after the US Supreme Court ruled that President Trump overstepped his authority in imposing the tariffs. Comparable sales grew 3.8%, beating the 2.5% estimate, driven by a 3.6% rise in store visits and an 8.7% jump in online sales. The company raised its yearly sales forecast for the second time this year to about 5% from 4%, and shares have jumped over 57% in 2026. However, the nearly $1 billion refund is a one-time boost that will make next year's comparisons harder, and growth in clothes and home goods remained weak. Walmart also booked nearly $2.9 billion in similar refunds this quarter, indicating a temporary sector-wide benefit.

Target Corporation reported that its grocery strategy is gaining traction, with food and beverage sales rising 7% in the quarter ended August 1, the fastest growth in three years, and store traffic up 3.6%. The company, under CEO Michael Fiddelke, plans to expand its private-label food lineup by about 600 products over the next two years, including 400 under its Good & Gather brand, aiming to generate over $2 billion in growth. Grocery is seen as a traffic driver to boost higher-margin categories like beauty, apparel, and home goods, with beauty sales up about 7% and comparable sales up 3.8%, prompting a raised full-year forecast. However, grocery remains a low-margin business, and Target's market share in U.S. grocery is about 5% versus Walmart's 27%, with apparel and home furnishings roughly flat, so the sustainability of the strategy is still being tested.

Target reported a stronger-than-expected fiscal second quarter, with revenue of $26.5 billion, up 5.3% year over year, and comparable sales growth of 3.8%, driven by a 3.6% rise in store traffic and an 8.7% increase in digital sales. The company's quiet operational changes, including a major overhaul of its grocery layout and a reimagined Fun101 department, have boosted sales in key categories: snacks are up over 15%, LEGO sales climbed more than 30%, and its $10 Heyday headphones saw a 35% jump. Target has also lowered prices on more than 10,000 items over the past year, and its inventory reliability has reached a multiyear high, helping to fulfill nearly 30% more same-day and next-day online orders. As a result, the company raised its full-year outlook, now expecting net sales growth of around 5% and adjusted earnings per share of $9.90 to $10.90, including a one-time tariff refund benefit. Target stock has surged over 70% in the last 12 months, trading at 17.7 times forward earnings, with analysts' average price target at $166.

Target Corp. reported second-quarter adjusted earnings per share of $4.11, double the year-ago figure, but a one-time tariff refund accounted for $1.65 of that amount. Comparable sales rose 3.8% on a 3.6% increase in foot traffic, while digital sales climbed 8.7% and net sales reached $26.5 billion. Management raised full-year sales guidance to about 5% growth and lifted its earnings per share outlook to a range of $9.90 to $10.90. However, excluding the refund, adjusted earnings per share grew only about 20%, and SG&A expenses rose to 21.6% of sales from 21.3%. Executives acknowledged that home and apparel sales still lag and that store-level execution will require years of work.

Target reported second quarter GAAP and adjusted EPS of $4.11, up from $2.05 last year, with tariff refunds contributing $1.65 to EPS; excluding these refunds, both GAAP and adjusted earnings per share were approximately 20% higher than a year ago. Net sales rose 5.3% to $26.5 billion, with comparable sales up 3.8% and traffic up 3.6%. The company raised its full-year net sales growth guidance to around 5% and its EPS range to $9.90 to $10.90, up from $7.50 to $8.50, excluding any potential additional tariff refunds. Target also reported a gross margin rate of 33.7%, including a 3.7 percentage point benefit from IEEPA tariff refunds, and an operating margin rate of 9.6% versus 5.2% last year. The company plans to resume share repurchases in the back half of the year and continues to expect approximately $5 billion in capital expenditures for the full year.

AI assistants are becoming a new gateway to retail, changing how consumers discover, compare, and buy products, according to a report from Retail Insight Network. McKinsey research cited in the report found that 38% of surveyed consumers in France, Germany, and the UK use AI to research products or inform purchase decisions. Major platforms are moving in this direction: Amazon renamed its Rufus assistant to Alexa for Shopping in May 2026, and OpenAI launched shopping research in ChatGPT in November 2025, with retailers like Target, Sephora, and Nordstrom integrating via its Agentic Commerce Protocol. McKinsey estimates agentic commerce could mediate between $3 trillion and $5 trillion of global consumer commerce by 2030. The report advises retailers to audit product data, monitor AI visibility, prepare for AI integration, and protect direct customer relationships as AI becomes another front door to retail.

Target shares have climbed 74% in 2026 as new CEO Michael Fiddelke's turnaround plan begins to deliver results. Fiddelke, who took over in February, has focused on merchandising authority, elevating the shopping experience, stepping up technology, and investing in teams and communities, backed by $2 billion in incremental spending on operational improvements and store renovations. Negative store-level sales have turned positive in the first two fiscal quarters under his leadership, and Fiddelke doubled his sales growth target from 2% to 4% following encouraging initial results. The company also extended its dividend increase streak to 55 consecutive years, though the dividend yield has fallen below 3% as the stock has rallied. Target is now taking market share from Walmart and other competitors, and the stock still trades at steep earnings and dividend yield discounts relative to Walmart.

Analysts have raised their earnings estimates for Target, pushing the stock to a Zacks Rank #2, or Buy. For the current quarter, the consensus estimate is now $1.98 per share, up 5.4% over the last 30 days, with six estimates moving higher and two lower. For the full year, the consensus estimate is $10.22 per share, up 5.81% over the past month, with 12 estimates raised and none lowered. Target shares have gained 21% over the past four weeks.