Target (NYSE: TGT) 2025 sales slip 1.7% but plans growth in 2026

Rhea-AI Filing Summary

Target Corporation reported softer results for fourth quarter and full-year 2025 but outlined plans for a return to growth in 2026. Fourth quarter net sales were $30.5 billion, down 1.5%, with comparable sales down 2.5% as store traffic declined but digital comparable sales grew 1.9%.

Fourth quarter GAAP EPS was $2.30, including $0.15 of business transformation costs, and Adjusted EPS was $2.44 versus $2.41 last year. For 2025, net sales fell 1.7% to $104.8 billion, GAAP EPS declined to $8.13 from $8.86, and Adjusted EPS was $7.57, lower than $8.86 in 2024, reflecting prior-year interchange fee settlement gains and current-year transformation costs.

Gross margin improved modestly in Q4 to 26.6% on lower inventory shrink and fulfillment costs, while full-year gross margin eased to 27.9%. Operating income for 2025 fell 8.1% to $5.1 billion, and after-tax ROIC was 13.8% versus 15.4% a year earlier. Operating cash flow remained strong at $6.6 billion, funding $3.7 billion of capital spending and $2.1 billion in dividends; the company did not repurchase shares in Q4 and has $8.3 billion remaining under its authorization.

For 2026, Target expects net sales growth around 2%, an operating income margin about 20 basis points above the 4.6% Adjusted operating income margin rate in 2025, and GAAP and Adjusted EPS of $7.50–$8.50, with first-quarter EPS expected to be flat to slightly above last year’s Adjusted EPS of $1.30.

Insights

Equity research analyst

Target posts modest sales decline, margin stability, and cautiously optimistic 2026 guidance.

Target delivered slightly lower 2025 revenue and earnings, but profitability metrics held relatively firm. Net sales declined 1.7% to $104.8B, with comparable sales down 2.6%, driven by fewer store transactions, while digital comparable sales still grew 3.1% for the year.

Operating income fell 8.1% to $5.1B and ROIC slipped to 13.8%, yet gross margin remained resilient at 27.9% despite higher markdowns and merchandising pressures. Cost discipline is evident: adjusted SG&A dollars declined versus the prior year, even as SG&A rate deleveraged on lower sales.

Management’s 2026 outlook targets net sales growth around 2%, a roughly 20-basis-point uplift from the 4.6% 2025 Adjusted operating margin, and EPS of $7.50–$8.50. Execution on merchandising, traffic recovery, and non-merchandise revenue growth will be critical to achieving this guidance, with progress most visible in quarterly sales and margin trends through 2026.

0000027419false00000274192026-03-032026-03-03

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 3, 2026

Target Corporation

(Exact name of registrant as specified in its charter)

Minnesota

1-6049

41-0215170

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

1000 Nicollet Mall,

Minneapolis,

Minnesota

55403

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (612) 304-6073

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.0833 per share

TGT

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company   ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o 

Item 2.02             Results of Operations and Financial Condition.

On March 3, 2026, Target Corporation issued a News Release containing its financial results for the three and twelve months ended January 31, 2026. The News Release is attached hereto as Exhibit 99.

Item 9.01             Financial Statements and Exhibits.

(d)                                 Exhibits.

99						Target Corporation’s News Release dated March 3, 2026, containing its financial results for the three and twelve months ended January 31, 2026
104						Cover Page Interactive Data File (formatted as inline XBRL).

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

			TARGET CORPORATION
Date: March 3, 2026			/s/ Jim Lee
			Jim Lee
			Executive Vice President and Chief Financial Officer

3

Exhibit 99

FOR IMMEDIATE RELEASE

Contacts:			John Hulbert, Investors, (612) 761-6627
			Joe Poulos, Media, (612) 696-3400

Target Corporation Reports Fourth Quarter and Full-Year 2025 Earnings

•Fourth quarter net sales of $30.5 billion were in line with company expectations.

◦Food & Beverage, Beauty and Toys delivered net sales growth in the quarter, with stronger trends in Essentials and Home compared to the third quarter.

◦Non-merchandise sales grew over 25 percent with membership revenue more than doubling from a year ago, double-digit growth from Roundel and over 30 percent growth in marketplace.

◦Same-day delivery powered by Target Circle 360 grew over 30 percent.

◦Sales and traffic trends accelerated in the last two months of the quarter.

•Fourth quarter GAAP EPS was $2.30, including 15 cents of non-recurring business transformation costs. Adjusted EPS1 of $2.44 was favorable to last year and in line with company expectations.

•Full-year GAAP EPS was $8.13 compared with $8.86 last year. Adjusted EPS, which excludes non-recurring legal settlement gains and business transformation costs, was $7.57 and in line with company expectations.

MINNEAPOLIS (March 3, 2026) – Target Corporation (NYSE: TGT) today announced its fourth-quarter and full-year 2025 results. The Company reported fourth-quarter GAAP earnings per share (EPS) of $2.30 and Adjusted EPS of $2.44, compared with GAAP and Adjusted EPS of $2.41 in 2024. GAAP EPS was $8.13 and Adjusted EPS was $7.57 for full-year 2025, compared with GAAP and Adjusted EPS of $8.86 in the prior year. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures are calculated on a diluted basis.

1 Adjusted EPS, Adjusted selling, general and administrative (SG&A) expenses, Adjusted SG&A expense rate, Adjusted operating income, and Adjusted operating income margin rate, non-GAAP financial measures, exclude the impact of certain discretely managed items, when applicable. See the tables of this release for additional information.

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Target Corporation Reports Fourth Quarter and Full-Year 2025 Earnings — Page 2 of 14

“I’m incredibly proud of how our team navigated through a challenging year in 2025, as they focused on serving our guests while positioning our business for profitable growth in 2026 and beyond,” said Michael Fiddelke, chief executive officer of Target Corporation. “Our team is firmly focused on writing Target’s next chapter of growth, rooted in strengthening our merchandising authority, delivering an elevated and differentiated shopping experience, advancing our use of technology, and continuing to serve and invest in our team and communities. Target saw a healthy, positive sales increase in February, serving as an important milestone on our path back to growth this year, and reinforcing my confidence in the momentum we’re building and the future we’re creating together.”

Guidance

The Company has the following expectations for 2026:

•Net sales growth in a range around 2 percent compared with 2025. This expectation reflects a small increase in comparable sales, with new store and non-merchandise sales contributing more than one percentage point of growth. The company expects to grow net sales in every quarter of the year.

•Full-year 2026 operating income margin rate approximately 20 basis points higher than the 4.6 percent Adjusted operating income margin rate in 2025.

•GAAP and Adjusted EPS of $7.50 to $8.50. Based on the expected timing of certain costs, the company expects Q1 GAAP and Adjusted EPS will be flat to up slightly from last year’s Adjusted EPS of $1.30, with stronger year-over-year EPS growth expected through the balance of the year.

Operating Results

Fourth quarter 2025 net sales of $30.5 billion were 1.5 percent lower than Q4 2024. Fourth quarter comparable sales decreased 2.5 percent, reflecting a comparable store sales decline of 3.9 percent and a comparable digital sales increase of 1.9 percent. Operating income, which includes the impact of non-recurring items, was $1.4 billion in fourth quarter 2025, a decrease of 5.9 percent from $1.5 billion in 2024. Excluding those non-recurring items, Adjusted operating income was $1.5 billion, slightly above last year.

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Target Corporation Reports Fourth Quarter and Full-Year 2025 Earnings — Page 3 of 14

Full-year net sales decreased 1.7 percent to $104.8 billion from $106.6 billion last year, reflecting a 2.6 percent decrease in comparable sales partially offset by sales from new stores and growth in non-merchandise sales.

Fourth quarter operating income margin rate, which includes the impact of non-recurring items, was 4.5 percent in 2025 compared with 4.7 percent in 2024. Excluding those non-recurring items, Adjusted operating income margin rate was 4.8 percent in 2025. Fourth quarter gross margin rate was 26.6 percent, compared with 26.2 percent in 2024, reflecting lower inventory shrink, lower supply chain and digital fulfillment costs, and growth in advertising and other revenues, partially offset by the net impact of merchandising activities, including higher product and import costs.

Full-year operating income, which includes the impact of non-recurring items, of $5.1 billion in 2025 declined 8.1 percent from $5.6 billion last year. Full-year gross margin rate was 27.9 percent, compared with 28.2 percent in 2024, reflecting pressures from merchandising activities, driven primarily by higher markdowns and purchase order cancellation costs, and pressure from category mix, partially offset by lower inventory shrink and growth in advertising and other revenues.

Fourth quarter SG&A expense rate, which includes the impact of non-recurring items, was 19.9 percent in 2025, compared with 19.4 percent in 2024. Excluding those non-recurring items, Adjusted SG&A expense rate was 19.6 percent in Q4 2025. Full-year SG&A expense rate, which includes the impact of non-recurring items, was 20.6 percent in 2025, compared with 20.6 percent in 2024. Excluding those non-recurring items, Adjusted SG&A expense rate was 20.9 percent in 2025. Both periods reflect the deleveraging impact of lower sales partially offset by disciplined cost management, as adjusted SG&A expense dollars in both periods were lower than in 2024.

Interest Expense and Taxes

The Company’s fourth quarter 2025 net interest expense was $99 million, compared with $90 million last year. Full-year 2025 net interest expense was $445 million, compared with $411 million in 2024. For both the fourth quarter and the full-year, the increased expense reflects higher average debt levels in the current year.

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Target Corporation Reports Fourth Quarter and Full-Year 2025 Earnings — Page 4 of 14

Fourth quarter 2025 effective income tax rate was 20.1 percent, compared with 21.5 percent last year, reflecting the benefit of additional tax credits in the current year. The Company’s full-year 2025 effective income tax rate was 22.3 percent compared with 22.2 percent in 2024, reflecting higher discrete tax expenses and higher global tax minimums, primarily offset by the benefit of additional tax credits in the current year.

Capital Deployment and Return on Invested Capital

The Company paid dividends of $516 million in the fourth quarter, compared with $513 million last year, reflecting a 1.8 percent increase in the dividend per share, partially offset by the impact of a lower average share count.

The Company did not repurchase any shares in the fourth quarter. As of the end of the fourth quarter, the Company had approximately $8.3 billion of remaining capacity under the repurchase program approved by Target’s Board of Directors in August 2021.

For the trailing twelve months through fourth quarter 2025, after-tax return on invested capital (ROIC) was 13.8 percent, compared with 15.4 percent for the twelve months through fourth quarter 2024. The tables in this release provide additional information about the Company’s ROIC calculation.

Webcast Details

Target will webcast its financial community meeting, including a Q&A session, beginning at 10.30 a.m. CST today. Investors and the media are invited to listen to the meeting at Corporate.Target.com/Investors (click on “2026 Financial Community Meeting, including Fourth Quarter and Full-Year 2025 Earnings” under “Events & Presentations”). A replay of the webcast will be provided when available.

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Target Corporation Reports Fourth Quarter and Full-Year 2025 Earnings — Page 5 of 14

Miscellaneous

Statements in this release regarding the Company’s future financial performance, including its fiscal 2026 full-year guidance, near-term sales and profit expectations, and long-term growth expectations, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties which could cause the Company’s results to differ materially. The most important risks and uncertainties are described in Item 1A of the Company’s Form 10-K for the fiscal year ended February 1, 2025. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update any forward-looking statement.

About Target

Minneapolis-based Target Corporation (NYSE: TGT) serves guests at nearly 2,000 stores and at Target.com, with the purpose of helping all families discover the joy of everyday life. Since 1946, Target has given 5% of its profit to communities, which today equals millions of dollars a week. Additional company information can be found by visiting the corporate website (corporate.target.com) and press center.

# # #

Target Corporation Reports Fourth Quarter and Full-Year 2025 Earnings — Page 6 of 14

TARGET CORPORATION

Consolidated Statements of Operations

						Three Months Ended																		Twelve Months Ended
(millions, except per share data) (unaudited)						January 31, 2026						February 1, 2025						Change						January 31, 2026						February 1, 2025						Change
Net sales						$	30,453					$	30,915					(1.5)		%				$	104,780					$	106,566					(1.7)		%
Cost of sales						22,343						22,802						(2.0)						75,511						76,502						(1.3)
Selling, general and administrative expenses						6,049						6,000						0.8						21,535						21,969						(2.0)
Depreciation and amortization (exclusive of depreciation included in cost of sales)						681						646						5.3						2,617						2,529						3.5
Operating income						1,380						1,467						(5.9)						5,117						5,566						(8.1)
Net interest expense						99						90						9.6						445						411						8.2
Net other income						(28)						(29)						(5.3)						(95)						(106)						(9.6)
Earnings before income taxes						1,309						1,406						(6.9)						4,767						5,261						(9.4)
Provision for income taxes						263						303						(13.0)						1,062						1,170						(9.2)
Net earnings						$	1,046					$	1,103					(5.2)		%				$	3,705					$	4,091					(9.4)		%
Basic earnings per share						$	2.31					$	2.42					(4.4)		%				$	8.16					$	8.89					(8.2)		%
Diluted earnings per share						$	2.30					$	2.41					(4.5)		%				$	8.13					$	8.86					(8.2)		%
Weighted average common shares outstanding
Basic						453.0						456.8						(0.8)		%				454.1						460.4						(1.4)		%
Diluted						455.1						458.4						(0.7)		%				455.6						461.8						(1.4)		%
Antidilutive shares						1.3						0.2												2.1						0.5
Dividends declared per share						$	1.14					$	1.12					1.8		%				$	4.54					$	4.46					1.8		%

Target Corporation Reports Fourth Quarter and Full-Year 2025 Earnings — Page 7 of 14

TARGET CORPORATION

Consolidated Statements of Financial Position

(millions, except footnotes) (unaudited)						January 31, 2026						February 1, 2025
Assets
Cash and cash equivalents						$	5,488					$	4,762
Inventory						12,304						12,740
Other current assets						2,213						1,952
Total current assets						20,005						19,454
Property and equipment, net						33,749						33,022
Operating lease assets						3,703						3,763
Other noncurrent assets						2,033						1,530
Total assets						$	59,490					$	57,769
Liabilities and shareholders’ investment
Accounts payable						$	12,622					$	13,053
Accrued and other current liabilities						6,478						6,110
Current portion of long-term debt and other borrowings						2,130						1,636
Total current liabilities						21,230						20,799
Long-term debt and other borrowings						14,326						14,304
Noncurrent operating lease liabilities						3,462						3,582
Deferred income taxes						2,265						2,303
Other noncurrent liabilities						2,042						2,115
Total noncurrent liabilities						22,095						22,304
Shareholders’ investment
Common stock						38						38
Additional paid-in capital						7,247						6,996
Retained earnings						9,297						8,090
Accumulated other comprehensive loss						(417)						(458)
Total shareholders’ investment						16,165						14,666
Total liabilities and shareholders’ investment						$	59,490					$	57,769

Common Stock Authorized 6,000,000,000 shares, $0.0833 par value; 452,840,187 and 455,566,995 shares issued and outstanding as of January 31, 2026, and February 1, 2025, respectively.

Preferred Stock Authorized 5,000,000 shares, $0.01 par value; no shares were issued or outstanding during any period presented.

Target Corporation Reports Fourth Quarter and Full-Year 2025 Earnings — Page 8 of 14

TARGET CORPORATION

Consolidated Statements of Cash Flows

						Twelve Months Ended
(millions) (unaudited)						January 31, 2026						February 1, 2025
Operating activities
Net earnings						$	3,705					$	4,091
Adjustments to reconcile net earnings to cash provided by operations:
Depreciation and amortization						3,134						2,981
Share-based compensation expense						281						304
Deferred income taxes						(55)						(180)
Noncash (gains) / losses and other, net						(100)						26
Changes in operating accounts:
Inventory						436						(854)
Other assets						(494)						(308)
Accounts payable						(501)						1,008
Accrued and other liabilities						156						299
Cash provided by operating activities						6,562						7,367
Investing activities
Expenditures for property and equipment						(3,727)						(2,891)
Other						78						31
Cash used in investing activities						(3,649)						(2,860)
Financing activities
Additions to long-term debt						1,984						741
Reductions of long-term debt						(1,643)						(1,139)
Dividends paid						(2,053)						(2,046)
Repurchase of stock						(408)						(1,007)
Shares withheld for taxes on share-based compensation						(67)						(99)
Cash used in financing activities						(2,187)						(3,550)
Net increase in cash and cash equivalents						726						957
Cash and cash equivalents at beginning of period						4,762						3,805
Cash and cash equivalents at end of period						$	5,488					$	4,762

Target Corporation Reports Fourth Quarter and Full-Year 2025 Earnings — Page 9 of 14

TARGET CORPORATION

Operating Results

Net Sales			Three Months Ended												Twelve Months Ended
(millions) (unaudited)			January 31, 2026						February 1, 2025						January 31, 2026						February 1, 2025
Apparel & accessories			$	4,100					$	4,344					$	15,737					$	16,505
Beauty			3,484						3,444						13,214						13,173
Food & beverage			6,638						6,520						24,136						23,828
Hardlines			6,016						6,150						15,800						15,784
Home furnishings & décor			4,819						5,087						15,608						16,699
Household essentials			4,695						4,786						18,017						18,614
Other merchandise sales			88						97						205						217
Merchandise sales			29,840						30,428						102,717						104,820
Advertising revenue (a)			295						190						915						649
Credit card profit sharing			127						142						522						576
Other			191						155						626						521
Net sales			$	30,453					$	30,915					$	104,780					$	106,566

(a)Primarily represents revenue related to advertising services provided via the Company's Roundel digital advertising business offering. Roundel services are classified as either Net Sales or as a reduction of Cost of Sales or SG&A Expenses, depending on the nature of the advertising arrangement.

Operating Metrics						Three Months Ended																		Twelve Months Ended
(dollars in millions) (unaudited)						January 31, 2026									February 1, 2025									January 31, 2026									February 1, 2025
						Dollars			Rate						Dollars			Rate						Dollars			Rate						Dollars			Rate
Gross margin						$	8,110		26.6		%				$	8,113		26.2		%				$	29,269		27.9		%				$	30,064		28.2		%
SG&A expenses						6,049			19.9						6,000			19.4						21,535			20.6						21,969			20.6
Adjusted SG&A expenses (a)						5,960			19.6						6,000			19.4						21,877			20.9						21,969			20.6
Depreciation and amortization (exclusive of depreciation included in cost of sales)						681			2.2						646			2.1						2,617			2.5						2,529			2.4
Operating income						1,380			4.5						1,467			4.7						5,117			4.9						5,566			5.2
Adjusted operating income (a)						1,470			4.8						1,467			4.7						4,775			4.6						5,566			5.2

Note: Gross margin is calculated as Net Sales less Cost of Sales. All rates are calculated by dividing the applicable amount by Net Sales.

(a)    Adjusted SG&A expenses, Adjusted SG&A expense rate, Adjusted operating income, and Adjusted operating income margin rate, which are non-GAAP measures, exclude the impact of certain items. Management believes that these measures are useful in providing period-to-period comparisons of the results of our operations. The Reconciliation of Non-GAAP Financial Measures tables provide additional information.

Target Corporation Reports Fourth Quarter and Full-Year 2025 Earnings — Page 10 of 14

Sales Metrics

Comparable sales include all Merchandise Sales, except sales from stores open less than 13 months or that have been closed. Digitally originated sales include all Merchandise Sales initiated through mobile/computer applications and the Company's websites.

Comparable Sales						Three Months Ended												Twelve Months Ended
(unaudited)						January 31, 2026						February 1, 2025						January 31, 2026						February 1, 2025
Comparable sales change						(2.5)		%				1.5		%				(2.6)		%				0.1		%
Drivers of change in comparable sales:
Number of transactions						(2.9)						2.1						(2.2)						1.4
Average transaction amount						0.4						(0.6)						(0.4)						(1.3)

Comparable Sales by Channel						Three Months Ended												Twelve Months Ended
(unaudited)						January 31, 2026						February 1, 2025						January 31, 2026						February 1, 2025
Stores originated comparable sales change						(3.9)		%				(0.5)		%				(4.0)		%				(1.6)		%
Digitally originated comparable sales change						1.9						8.7						3.1						7.5

Merchandise Sales by Channel						Three Months Ended												Twelve Months Ended
(unaudited)						January 31, 2026						February 1, 2025						January 31, 2026						February 1, 2025
Stores originated						76.3		%				77.2		%				79.4		%				80.4		%
Digitally originated						23.7						22.8						20.6						19.6
Total						100		%				100		%				100		%				100		%

Merchandise Sales by Fulfillment Channel						Three Months Ended												Twelve Months Ended
(unaudited)						January 31, 2026						February 1, 2025						January 31, 2026						February 1, 2025
Stores						97.4		%				97.3		%				97.6		%				97.6		%
Other						2.6						2.7						2.4						2.4
Total						100		%				100		%				100		%				100		%

Note: Sales fulfilled by stores include in-store purchases and digitally originated sales fulfilled by shipping merchandise from stores to guests, Order Pickup, Drive Up, and Same Day Delivery.

Number of Stores and Retail Square Feet						Number of Stores												Retail Square Feet (a)
(unaudited)						January 31, 2026						February 1, 2025						January 31, 2026						February 1, 2025
170,000 or more sq. ft.						273						273						48,824						48,824
50,000 to 169,999 sq. ft.						1,576						1,559						197,274						195,050
49,999 or less sq. ft.						146						146						4,420						4,404
Total						1,995						1,978						250,518						248,278

(a)In thousands, reflects total square feet less office, supply chain facility, and vacant space.

Target Corporation Reports Fourth Quarter and Full-Year 2025 Earnings — Page 11 of 14

TARGET CORPORATION

Reconciliation of Non-GAAP Financial Measures

To provide additional transparency, the Company has disclosed non-GAAP adjusted diluted earnings per share (Adjusted EPS), adjusted SG&A expenses, adjusted SG&A expense rate, adjusted operating income, and adjusted operating income margin rate. When applicable, these measures exclude certain discretely managed items. Management believes this information is useful in providing period-to-period comparisons of the results of Target's operations. These measures are not in accordance with, or an alternative to, generally accepted accounting principles in the United States (GAAP). The most comparable GAAP measures are diluted earnings per share, SG&A expenses, SG&A expense rate, operating income, and operating income margin rate. Adjusted EPS, adjusted SG&A expenses, adjusted SG&A expense rate, adjusted operating income, and adjusted operating income margin rate should not be considered in isolation or as a substitution for analysis of Target's results as reported in accordance with GAAP. Other companies may calculate these measures differently, or not provide similar measures, limiting the usefulness of the measures for comparisons with other companies.

Reconciliation of Non-GAAP Adjusted EPS						Three Months Ended
						January 31, 2026																		February 1, 2025
(millions, except per share data) (unaudited)						Pretax						Net of Tax						Per Share						Pretax						Net of Tax						Per Share						Change
GAAP diluted EPS																		$	2.30																	$	2.41					(4.5)		%
Adjustments
Business transformation costs (a)						$	89					$	66					$	0.15					$	—					$	—					$	—
Adjusted EPS																		$	2.44																	$	2.41					1.5		%

Reconciliation of Non-GAAP Adjusted EPS						Twelve Months Ended
						January 31, 2026																		February 1, 2025
(millions, except per share data) (unaudited)						Pretax						Net of Tax						Per Share						Pretax						Net of Tax						Per Share						Change
GAAP diluted EPS																		$	8.13																	$	8.86					(8.2)		%
Adjustments
Business transformation costs (a)						$	250					$	187					$	0.41					$	—					$	—					$	—
Interchange fee settlements (b)						(593)						(441)						(0.97)						—						—						—
Adjusted EPS																		$	7.57																	$	8.86					(14.5)		%

Note: Amounts may not foot due to rounding.

(a)    For the three months ended January 31, 2026, primarily represents exit costs related to excess office space. For full-year 2025, also includes employee severance and related costs, as well as asset impairments and other charges related to the termination of a commercial partnership.

(b)    Includes gains, net of legal fees, related to settlements during the first quarter of 2025 of credit card interchange fee litigation matters in which the Company was a plaintiff.

Target Corporation Reports Fourth Quarter and Full-Year 2025 Earnings — Page 12 of 14

Reconciliation of Non-GAAP Adjusted SG&A Expenses and Adjusted Operating Income			Three Months Ended
			January 31, 2026															February 1, 2025
			SG&A Expenses						Operating Income									SG&A Expenses						Operating Income
(dollars in millions) (unaudited)			Dollars			Rate			Dollars			Rate						Dollars			Rate			Dollars			Rate
Reported, GAAP measure			$	6,049		19.9		%	$	1,380		4.5		%				$6,000			19.4		%	$1,467			4.7		%
Adjustments affecting comparability
Business transformation costs			(89)			(0.3)			89			0.3						—			—			—			—
Adjusted, Non-GAAP measure			$	5,960		19.6		%	$	1,470		4.8		%				$6,000			19.4		%	$1,467			4.7		%

Reconciliation of Non-GAAP Adjusted SG&A Expenses and Adjusted Operating Income			Twelve Months Ended
			January 31, 2026															February 1, 2025
			SG&A Expenses						Operating Income									SG&A Expenses						Operating Income
(dollars in millions) (unaudited)			Dollars			Rate			Dollars			Rate						Dollars			Rate			Dollars			Rate
Reported, GAAP measure			$	21,535		20.6		%	$	5,117		4.9		%				$21,969			20.6		%	$5,566			5.2		%
Adjustments affecting comparability
Business transformation costs			(250)			(0.2)			250			0.2						—			—			—			—
Interchange fee settlements			593			0.6			(593)			(0.6)						—			—			—			—
Adjusted, Non-GAAP measure			$	21,877		20.9		%	$	4,775		4.6		%				$21,969			20.6		%	$5,566			5.2		%

Note: Amounts may not foot due to rounding. The nature of the adjustments within this table are described below the Reconciliation of Non-GAAP Adjusted EPS tables above.

Target Corporation Reports Fourth Quarter and Full-Year 2025 Earnings — Page 13 of 14

The Company has also disclosed after-tax ROIC, which is a ratio based on GAAP information, with the exception of the add-back of operating lease interest to operating income. Management believes this metric is useful in assessing the effectiveness of Target's capital allocation over time. Other companies may calculate ROIC differently, limiting the usefulness of the measure for comparisons with other companies.

After-Tax Return on Invested Capital
(dollars in millions) (unaudited)
												Trailing Twelve Months
Numerator												January 31, 2026						February 1, 2025
Operating income												$	5,117					$	5,566
+ Net other income												95						106
EBIT												5,212						5,672
+ Operating lease interest (a)												172						159
- Income taxes (b)												1,199						1,297
Net operating profit after taxes												$	4,185					$	4,534

Denominator						January 31, 2026						February 1, 2025						February 3, 2024
Current portion of long-term debt and other borrowings						$	2,130					$	1,636					$	1,116
+ Noncurrent portion of long-term debt						14,326						14,304						14,922
+ Shareholders' investment						16,165						14,666						13,432
+ Operating lease liabilities (c)						3,834						3,935						3,608
- Cash and cash equivalents						5,488						4,762						3,805
Invested capital						$	30,967					$	29,779					$	29,273
Average invested capital (d)						$	30,373					$	29,526

After-tax return on invested capital (e) 13.8 % 15.4 %

(a)Represents the add-back to operating income driven by the hypothetical interest expense the Company would incur if the property under its operating leases were owned or accounted for as finance leases. Calculated using the discount rate for each lease and recorded as a component of rent expense within Operating Income. Operating lease interest is added back to Operating Income in the ROIC calculation to control for differences in capital structure between Target and its competitors.

(b)Calculated using the effective tax rates, which were 22.3 percent and 22.2 percent for the trailing twelve months ended January 31, 2026, and February 1, 2025, respectively. For the twelve months ended January 31, 2026, and February 1, 2025, includes tax effect of $1.2 billion and $1.3 billion, respectively, related to EBIT, and $38 million and $35 million, respectively, related to operating lease interest.

(c)Total short-term and long-term operating lease liabilities included within Accrued and Other Current Liabilities and Noncurrent Operating Lease Liabilities.

(d)Average based on the invested capital at the end of the current period and the invested capital at the end of the comparable prior period.

(e)For the trailing twelve months ended January 31, 2026, includes the impact of after-tax net gains on interchange fee settlements and business transformation costs, which had a net favorable impact on after-tax ROIC of 0.8 percentage points. Notes (a) and (b) to the Reconciliation of Non-GAAP Adjusted EPS tables provide additional information.

Target Corporation Reports Fourth Quarter and Full-Year 2025 Earnings — Page 14 of 14

2026 GAAP EPS, SG&A expenses, SG&A expense rate, operating income, and operating (income) margin rate may include the impact of certain discrete items, which may be excluded in calculating Adjusted EPS, Adjusted SG&A expenses, Adjusted SG&A expense rate, Adjusted operating income, and Adjusted operating income margin rate. The guidance does not currently reflect any such discrete items, which are subject to variability and therefore cannot be reconciled without unreasonable efforts. In the past, these items have included both gains and losses, including certain asset impairments, severance, and other items that are discretely managed

Reconciliation of Non-GAAP Adjusted EPS Guidance

(per share) (unaudited)

Q1 2026

Full Year 2026

GAAP diluted earnings per share guidance

$1.30+(a)

$7.50 - $8.50

Estimated adjustments

Other (b)

$

—

$

—

Adjusted diluted earnings per share guidance

$1.30+(a)

$7.50 - $8.50

(a)The company expects Q1 2026 GAAP and Adjusted EPS will be flat to up slightly from last year’s Adjusted EPS of $1.30. A reconciliation of Q1 2025 Adjusted EPS to Q1 2025 GAAP EPS is included in the Company's Q1 2025 financial press release, financial presentations and SEC filings, which are posted on the Company's investor relations website.

(b)The guidance does not currently reflect any discrete items.

FAQ

How did Target (TGT) perform in the fourth quarter of 2025?

Target’s fourth quarter 2025 net sales were $30.5 billion, down 1.5% from 2024. Comparable sales fell 2.5%, as store comps declined 3.9% while digital comparable sales grew 1.9%. GAAP EPS was $2.30 and Adjusted EPS was $2.44.

What were Target’s full-year 2025 sales and earnings results?

For 2025, Target generated net sales of $104.8 billion, a 1.7% decline from $106.6 billion in 2024. GAAP EPS fell to $8.13 from $8.86, and Adjusted EPS was $7.57, lower than the prior year’s $8.86, reflecting legal settlement gains and transformation costs.

What guidance did Target (TGT) provide for fiscal 2026?

Target expects 2026 net sales growth around 2% versus 2025, with every quarter growing. It targets a full-year operating income margin about 20 basis points above the 2025 Adjusted margin of 4.6%, and projects GAAP and Adjusted EPS in a range of $7.50 to $8.50.

How are Target’s margins and profitability trending?

Fourth quarter 2025 gross margin improved to 26.6% from 26.2%, helped by lower shrink and fulfillment costs. Full-year gross margin eased to 27.9%. Operating income declined 8.1% to $5.1 billion, and after-tax ROIC decreased to 13.8% from 15.4%.

What did Target (TGT) report about cash flow, dividends, and buybacks?

In 2025, Target generated $6.6 billion in cash from operations and spent $3.7 billion on capital expenditures. It paid $2.1 billion in dividends and did not repurchase shares in the fourth quarter, leaving about $8.3 billion authorized for future repurchases.

How did Target’s comparable sales and channels perform in 2025?

Full-year 2025 comparable sales declined 2.6%, driven by a 4.0% drop in stores-originated comps, while digitally originated comparable sales increased 3.1%. Stores still accounted for roughly 79.4% of merchandise sales, with digital representing 20.6% for the year.

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