Target Q4 Earnings Meet Street Expectations – Retailer Points To Momentum In Select Categories

• Adjusted EPS stood at $2.44 in the quarter, beating the consensus estimate of $2.16, according to Fiscal AI data. 
• The operating income for the quarter decreased 5.9% year-on-year to $1.38 billion. 
• Revenue outside traditional merchandise climbed sharply by 25% year-on-year, helped by membership income.

Target Corp. (TGT) posted fourth-quarter (Q4) and full-year 2025 results that met Wall Street’s expectations, even as annual sales and profits declined from the prior year. 

The retailer pointed to momentum in select categories and digital services while outlining modest growth expectations for 2026.

Quarterly Performance Snapshot

The Minneapolis-based company generated $30.5 billion in revenue during Q4, meeting the analysts’ consensus estimate of $30.47 billion despite a 1.5% year-over-year (YoY) dip. Adjusted EPS reached $2.44 in the quarter, beating the consensus estimate of $2.16, according to Fiscal AI data. 

Comparable sales declined 2.5% YoY. Fourth-quarter gross margin increased by 40 basis points to 26.6%. The operating income for the quarter decreased 5.9% YoY to $1.38 billion. 

Target stock traded over 3% higher in Tuesday’s premarket. On Stocktwits, retail sentiment around the stock jumpedt o ‘bullish’ from ‘neutral’ territory the previous day. Message volume shifted to ‘high’ from ‘low’ levels in 24 hours. 

Revenue outside traditional merchandise climbed sharply by 25% YoY, helped by membership income that more than doubled from a year earlier, double-digit advertising growth through Roundel, and marketplace expansion exceeding 30%.

Return on Invested Capital And Outlook 

Over the 12-month period ending in Q4, the company’s after-tax return on invested capital was 13.8%, down from 15.4% in the same period a year earlier.

For 2026, Target projects approximately 2% revenue growth, with comparable sales inching higher and new stores plus non-merchandise initiatives adding more than a percentage point of expansion. The company expects operating margin to improve modestly and forecasts adjusted EPS between $7.50 and $8.50.

TGT stock has declined by over 6% in the last 12 months. 

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