Target Corporation 8-K

PositiveEarningsGuidance raised

Tariff refunds boosted profit as higher traffic drove comparable-sales growth; FY2026 sales and EPS outlooks rose.

Filed 2026-08-19 07:51 ET

Summary

Q2 2026 results with updated FY2026 guidance. Net sales grew 5.3% and comparable sales rose 3.8%; $994M of tariff refunds lifted Q2 operating income and diluted EPS. Target raised its full-year net sales growth outlook by 1 percentage point and increased its EPS guidance, including the Q2 refund benefit.

Key Figures

Metric Q2 2026 Q2 2025 Y/Y
Net sales $26.5B $25.2B 5.3%
Operating income $2.56B $1.32B 94.4%
Net earnings $1.88B $935M 100.8%
Diluted EPS, GAAP $4.11 $2.05 100.3%
Diluted EPS, non-GAAP adjusted $4.11 $2.05 100.3%
Comparable sales 3.8% (1.9)% +570bp
  • Comparable sales growth was driven by 3.6% higher traffic; store comparable sales grew 2.7% and digital comparable sales 8.7%.
  • Tariff refunds contributed $994M pretax to gross margin and operating income, $752M to net earnings, and $1.65 to diluted EPS.
  • Capital expenditures were $1.4B, up 27% Y/Y, primarily for store remodels and new stores. Target paid $518M in dividends and repurchased no stock during the quarter.

Guidance

Metric Period Guidance Prior Direction
Net sales growth FY2026 ≈5% — Raised by 1 percentage point
Operating income margin rate FY2026 Range around 6%; includes ≈90bp benefit from Q2 tariff refunds — —
GAAP and adjusted diluted EPS FY2026 $9.90-$10.90; includes ≈$1.65 from Q2 tariff refunds $7.50-$8.50 Raised; excluding refunds, midpoint is $0.75 higher

Excluding tariff refunds, FY2026 operating income margin rate is expected to be around 50bp above FY2025 adjusted operating income margin rate of 4.6%. Guidance excludes potential future tariff refunds.

Investor Takeaways

  • Watch progress against the updated FY2026 sales growth, operating margin and EPS outlook; the EPS range includes the Q2 refund benefit.

The summary is written by an AI model reading the filing.

Model 005 · prompt 01d34d48e3

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