Minneapolis-based Target announcing Wednesday that first quarter fiscal earnings and revenue topped expectations, with reported net sales growing more than 6% year-over-year.
The retail giant posted its best sales growth in 4 years. Shares rose 1.6% before the opening bell Wednesday.
"Today we're reporting first quarter results that are stronger than expected, early proof points that give us confidence we're on the right path," Target CEO Michael Fiddelke explained to investors on a Wednesday morning call. "But, to be clear, a single good quarter has never been our goal. Our goal is consistent long-term growth."
Same-stores sales jumped 5.6%, the first positive same-store sales number in five quarters.
Beauty, hardlines, and food led the overall increased sales across all merchandise departments.
“We’re encouraged to see a strong guest response so far,” Fiddelke told reporters Tuesday, adding: “We’re maintaining a cautious outlook given the work we know we have in front of us and ongoing uncertainty in the macroeconomic environment.”
Target has been struggling to revive its business, and this shows that it's making progress. The company has been freshening up its merchandise and stores and also integrating more technology into its operations.
He and other Target executives presented investors in early March with a $6 billion plan to reverse three straight years of sales declines by remodeling stores, reclaiming the chain’s reputation for stocking stylish clothing for shoppers on a budget, and improving store staffing and worker training.
New collaborations with labels like Roller Rabbit, an apparel and home goods brand known for its whimsical, block-print designs, resonated with shoppers, company executives said. An expanded selection of toys costing under $10 also was popular, Fiddelke said.
Later this year, Target will roll out its biggest revamp in food and beverage and up new items by 50%.
And this fall, the Target beauty studio section will launch in more than 600 stores.
Beyond its stores, Target also took a hit to its reputation in the last two years. The company’s decision to roll back diversity, equity and inclusion initiatives led to protests and boycotts.
Target became a flashpoint again this year when Minneapolis, the city where the retailer has its headquarters, became the center of an immigration crackdown. Local activists wanted the company to take a public stand against the Trump administration surging federal agents into the city, especially after two residents participating in protests were killed.
Fiddelke was one of 60 CEOs of Minnesota-based companies who, in the wake of a protester's death, signed an open letter in January “calling for an immediate de-escalation of tensions and for state, local and federal officials to work together to find real solutions.”
In early March, Fiddelke acknowledged in an interview with The Associated Press that boycotts impacted Target’s sales. He said Tuesday that the increased store traffic during the first quarter was broad-based across regions and types of customers.
The Company has the following updated expectations for 2026:
- Net sales growth in a range around 4 percent compared with 2025 - two percentage points higher than the prior range. The Company continues to expect to grow net sales in every quarter of the year.
- Full-year 2026 operating income margin rate more than 20 basis points higher than the 4.6 percent Adjusted operating income margin rate in 2025.
- GAAP and Adjusted EPS near the high end of the prior guidance range of $7.50 to $8.50.
