Target (TGT) Q2 2026 Earnings Call: Sales Growth and Raised Guidance
Source Tradingkey
Key Takeaways
- Target reported second-quarter 2026 net sales of $26.5 billion, up 5.3% year over year. Comparable sales increased 3.8%, driven by 3.6% traffic growth, while average ticket was approximately flat.
- Digital comparable sales rose 8.7%, supported by more than 25% growth in same-day delivery. Store comparable sales increased 2.7%.
- GAAP and adjusted EPS reached $4.11, versus $2.05 a year earlier. IEEPA tariff refunds contributed $1.65 per share; excluding that benefit, EPS increased approximately 20%.
- The company raised its full-year net sales growth outlook to around 5% and lifted its EPS guidance to $9.90-$10.90, including the tariff refund benefit recognized in Q2.
- Food and beverage, beauty, and Fun 101 led category growth. Management said apparel and home performance remained below its expectations, with further work extending into 2027 and beyond.
- Target continued investing in stores, supply chain and technology. Year-to-date capital expenditures reached approximately $2.4 billion, and full-year CapEx is still expected to be approximately $5 billion.
Key Financial Data
| Metric | Q2 2026 result | Year-over-year change / context |
|---|---|---|
| Net sales | $26.5 billion | +5.3% |
| Comparable sales | — | +3.8% |
| Traffic | — | +3.6% |
| Average ticket | — | Approximately flat |
| Store comparable sales | — | +2.7% |
| Digital comparable sales | — | +8.7% |
| Gross margin rate | 33.7% | +4.7 percentage points; included 3.7 points from tariff refunds |
| SG&A expense rate | 21.6% | +30 basis points |
| Operating margin rate | 9.6% | 5.2% a year earlier; approximately 70 basis points higher excluding tariff refunds |
| GAAP and adjusted EPS | $4.11 | $2.05 a year earlier; tariff refunds contributed $1.65 |
| Inventory | $13.2 billion | Approximately +3% |
| Trailing 12-month after-tax ROIC | 15.4% | 14.3% a year earlier |
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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