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Target (NYSE: TGT) nearly doubles Q2 EPS as tariff refunds hit

Filing Impact
(Moderate)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Target Corporation (TGT) reported strong second quarter 2026 results, with net sales of $26.5 billion, up 5.3% year over year, driven by 3.8% comparable sales growth and a 3.6% increase in traffic. Both channels contributed, as store comparable sales rose 2.7% and digital comparable sales grew 8.7%, led by more than 25% growth in same-day delivery. All six core merchandising categories posted higher sales, including double-digit growth in Fun 101 and high single-digit growth in Food & Beverage and Beauty, while non‑merchandise sales grew over 20%.

Second quarter GAAP and Adjusted EPS were $4.11, up about 100% from $2.05 a year ago, aided by $994 million of pretax tariff refunds that added $752 million to net earnings and $1.65 to EPS; excluding these refunds, EPS increased about 20%. Operating income nearly doubled to $2.56 billion with a 9.6% margin versus 5.2% last year, and gross margin improved to 33.7%. Management raised full‑year 2026 guidance to around 5% net sales growth, an operating income margin rate around 6%, and GAAP and Adjusted EPS of $9.90–$10.90, including the $1.65 tariff benefit.

Positive

  • EPS doubled to $4.11 in Q2 2026 from $2.05, including a $994 million tariff refund benefit contributing $1.65 per share.
  • Operating income rose 94.4% to $2.56 billion, with margin expanding from 5.2% to 9.6%, supported by higher gross margins.
  • Comparable sales grew 3.8% with traffic up 3.6%, reversing last year’s 1.9% decline and indicating broad-based demand strength.
  • Full-year EPS guidance increased to $9.90–$10.90, with the midpoint up $0.75 versus the prior $7.50–$8.50 range excluding tariff refunds.
  • Cash from operations for the first six months rose to $4.52 billion from $2.36 billion, significantly strengthening internal funding capacity.
  • After-tax ROIC improved to 15.4% over the trailing twelve months from 14.3%, even after isolating discrete items.

Negative

  • None.

Filing Explained

Target reported no second-quarter stock repurchases, leaving $8.3 billion of buyback capacity rather than completed repurchase spending.

As a Form 8-K, this filing reports Target’s financial results for the three months ended August 1, 2026; the results are presented as completed second-quarter reporting. For existing common holders, Target reported no stock repurchases during the quarter, while approximately $8.3 billion of repurchase-program capacity remained available rather than being reported as spent.

The release separately reports second-quarter capital expenditures of $1.4 billion and dividends paid of $518 million, identifying those amounts as completed capital deployment during the quarter.

Common shares issued and outstanding were 454,291,461, compared with 452,840,187 at January 31, 2026.

Item 2.02 Results of Operations and Financial Condition Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Net sales Q2 2026 $26,539 million Three months ended August 1, 2026; up 5.3% from $25,211 million in Q2 2025
Diluted EPS Q2 2026 $4.11 Three months ended August 1, 2026; versus $2.05 a year earlier, including $1.65 from tariff refunds
Tariff refunds Q2 2026 $994 million Pretax benefit recognized as reduction of Cost of Sales; added $752 million to net earnings
Operating income Q2 2026 $2,560 million Up 94.4% from $1,317 million; margin 9.6% versus 5.2% in prior-year quarter
Comparable sales change Q2 2026 3.8% Three months ended August 1, 2026; driven by 3.6% traffic and 0.2% ticket growth
Cash from operations 6M 2026 $4,519 million Six months ended August 1, 2026; compared with $2,358 million for six months 2025
Capital expenditures Q2 2026 $1,400 million Second quarter 2026 capex; 27% higher than the prior-year quarter
After-tax ROIC 15.4% Trailing twelve months through Q2 2026; up from 14.3% a year earlier
tariff refunds financial
"recognized $994 million related to International Emergency Economic Powers Act (IEEPA) tariff refunds"
comparable sales financial
"Comparable sales grew 3.8 percent in the second quarter"
"Comparable sales" are the total sales from stores or products that have been open for a certain period, usually the same time last year or last quarter. They help show whether a business is growing by comparing similar locations or products over time, much like checking if your favorite store's sales are going up compared to previous years.
Adjusted EPS financial
"Second quarter GAAP and Adjusted EPS1 was $4.11"
Adjusted earnings per share (adjusted eps) is a measure of a company's profit per share that has been modified to exclude certain one-time or unusual items, such as costs from restructuring or asset sales. It provides a clearer picture of the company’s core performance by removing events that may distort the usual earnings. Investors use adjusted eps to better understand a company's ongoing profitability and compare it more accurately over time.
operating income margin rate financial
"Full-year 2026 operating income margin rate in a range around 6 percent"
Operating income margin rate is the percentage of revenue a company keeps as profit from its regular business activities after paying the costs of making and selling its products or services. It tells investors how efficiently a company turns sales into core profit—like measuring how much of every dollar of household income is left after paying recurring bills—so rising or falling margins signal changes in pricing power, cost control, or business health.
return on invested capital (ROIC) financial
"after-tax return on invested capital (ROIC) was 15.4 percent"
Return on invested capital (ROIC) measures how much profit a company generates from the money put into its business, including debt and equity. Think of it like the harvest you get from seeds you planted: higher ROIC means the company uses its resources more efficiently to grow earnings. Investors care because ROIC shows whether a business is creating value above its cost of financing and helps compare operational effectiveness across companies.
Net sales Q2 2026 $26,539 million Up 5.3% from $25,211 million in Q2 2025
Diluted EPS Q2 2026 $4.11 Up about 100% from $2.05 in Q2 2025, including $1.65 from tariff refunds
Operating income Q2 2026 $2,560 million Up 94.4% from $1,317 million a year earlier
Gross margin rate Q2 2026 33.7% Up from 29.0%, including 3.7 percentage points from tariff refunds
Comparable sales change Q2 2026 3.8% Improved from a 1.9% decline in Q2 2025
Guidance

For full-year 2026, the company expects net sales growth around 5%, operating income margin rate around 6% (including about 90 basis points from Q2 tariff refunds), and GAAP and Adjusted EPS of $9.90–$10.90, including the $1.65 per-share Q2 tariff benefit.

FAQ

How did Target (TGT) perform financially in Q2 2026?
Target reported Q2 2026 net sales of $26.5 billion, up 5.3% year over year, and diluted EPS of $4.11, about 100% higher than $2.05 last year, including $1.65 per share from tariff refunds.

What drove Target (TGT) comparable sales growth in Q2 2026?
Comparable sales increased 3.8%, driven by a 3.6% rise in traffic and a modestly higher ticket. Store comps grew 2.7% and digital comps 8.7%, with same-day delivery growing more than 25% and all six core categories posting sales gains.

How significant were the tariff refunds to Target’s (TGT) Q2 2026 results?
Target recognized $994 million in pretax tariff refunds, adding $752 million to net earnings and $1.65 to EPS. These refunds contributed 3.7 percentage points to both gross margin and operating margin rates in the quarter.

What full-year 2026 guidance did Target (TGT) provide?
Target now expects around 5% full-year net sales growth, an operating income margin rate around 6%, and GAAP and Adjusted EPS of $9.90–$10.90, which includes the Q2 $1.65 per-share tariff refund benefit.

What is Target’s (TGT) current capital return and leverage profile?
In Q2 2026 Target paid $518 million in dividends, a 1.8% increase per share, and did not repurchase stock, leaving $8.3 billion capacity under its buyback authorization. Long‑term debt and other borrowings totaled $15.36 billion including current portions.

How much is Target (TGT) investing in growth initiatives in 2026?
Second quarter 2026 capital expenditures were $1.4 billion, up 27% year over year, mainly for store remodels and new stores. For the first six months, property and equipment spending totaled $2.40 billion, reflecting continued investment in the store base and infrastructure.

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Understanding 8-K Material Events →
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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): August 19, 2026

Target Corporation
(Exact name of registrant as specified in its charter)
Minnesota1-604941-0215170
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
1000 Nicollet Mall,Minneapolis,Minnesota55403
(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 classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.0833 per shareTGTNew 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 August 19, 2026, Target Corporation issued a News Release containing its financial results for the three months ended August 1, 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 August 19, 2026, containing its financial results for the three months ended August 1, 2026.
104Cover 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: August 19, 2026By:/s/ Jim Lee
Name: Jim Lee
Title: Executive Vice President and Chief Financial Officer

3

Exhibit 99
releasebullseyeq419.gif
FOR IMMEDIATE RELEASE
Contacts:John Hulbert, Investors, (612) 761-6627
Joe Poulos, Media, (612) 696-3400

Target Corporation Reports Second Quarter Earnings

•Second quarter net sales grew 5.3 percent over last year, with comparable sales growth of 3.8 percent driven by a 3.6 percent increase in comparable traffic.
◦On a two-year basis, second quarter Net Sales compounded annual growth rate was 2.1%, a 30 basis point acceleration to prior quarter.
◦Topline strength was broad-based across sales channels, demographics, merchandise categories, and across the quarter.
▪Store comparable sales grew 2.7 percent, and Digital comparable sales grew 8.7 percent, led by more than 25 percent growth in same-day delivery.
▪Net sales in all six core merchandising categories grew versus a year ago with double-digit growth in Fun 101 and high single-digit growth in Food & Beverage and Beauty.
▪The company continues to focus on a differentiated retail experience, investing in style, design, newness, and in value, having lowered prices on more than 10,000 items over the past year.
◦Non-merchandise sales grew over 20 percent, reflecting strong growth in Roundel ad revenue, Target Circle 360 membership revenue, and the Target+ marketplace.
•Second quarter GAAP and Adjusted EPS1 was $4.11, compared with prior-year GAAP and Adjusted EPS of $2.05, an increase of 100 percent, which included tariff refund2 benefits of $1.65 for Q2 2026. GAAP and Adjusted EPS increased 20 percent year-over-year, excluding tariff refunds.

For additional media materials, please visit:
https://corporate.target.com/news-features/article/2026/08/q2-2026-earnings


MINNEAPOLIS (August 19, 2026) – Target Corporation (NYSE: TGT) today announced its second quarter 2026 financial results.


– more –
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.
2 During the three and six months ended August 1, 2026, we recognized $994 million related to International Emergency Economic Powers Act (IEEPA) tariff refunds ("tariff refunds") received during the second quarter of 2026 as a reduction of Cost of Sales. Note (a) to the Operating Metrics table provides additional information about the impact of tariff refunds.
Target Corporation Reports Second Quarter Earnings — Page 2 of 13
The Company reported second quarter GAAP and Adjusted earnings per share (EPS) of $4.11, compared with prior-year GAAP and Adjusted EPS of $2.05. Second quarter 2026 results include $994 million of pretax tariff refund benefits within gross margin and operating income. These gains contributed $752 million to net earnings and $1.65 to both GAAP and Adjusted EPS. The attached tables provide reconciliations of non-GAAP to GAAP measures. All earnings per share figures are calculated on a diluted basis.

“Second quarter results build on the encouraging momentum we saw in the first quarter, giving us increasing confidence that our strategy is resonating with our guests and strengthening our leadership position in style, design, and value,” said Michael Fiddelke, Chief Executive Officer of Target. “Over the past year, we've reduced prices on more than 10,000 frequently purchased items as part of our commitment to delivering outstanding value every day, while continuing to invest in newness, convenience, and an elevated shopping experience. While there's still meaningful work ahead, we're encouraged by the progress we're making and remain focused on executing with discipline, staying agile in a dynamic operating environment, and investing in our team and capabilities to drive sustainable, profitable growth over the long term.”

Guidance3

Given our performance through the first half of the year, the Company has the following updated expectations for 2026:
•Full-year net sales growth in a range around 5 percent, one percentage point higher than the prior guidance range.
•Full-year 2026 operating income margin rate in a range around 6 percent, including approximately 90 basis points of benefit from Q2 tariff refunds. Excluding tariff refunds, full-year operating income margin rate is expected to be in a range around 50 basis points higher than last year's Adjusted operating income margin rate of 4.6 percent.
•An updated GAAP and Adjusted EPS guidance range of $9.90 to $10.90, which includes second quarter tariff refund benefits of approximately $1.65. Excluding tariff refunds, the midpoint of the guidance range reflects a $0.75 increase versus prior guidance of $7.50 to $8.50.


– more –
3 The Company's guidance excludes any potential future tariff refunds.
Target Corporation Reports Second Quarter Earnings — Page 3 of 13
Operating Results
Net Sales of $26.5 billion in the second quarter were 5.3 percent higher than last year, reflecting a 5.0 percent increase in merchandise sales and a 20.1 percent increase in non-merchandise sales. Comparable sales grew 3.8 percent in the second quarter, reflecting a comparable store sales increase of 2.7 percent and comparable digital sales increase of 8.7 percent. Second quarter operating income, which included a $994 million benefit from tariff refunds, was $2.6 billion, compared with prior-year operating income of $1.3 billion. Operating income margin rate of 9.6 percent, which included 3.7 percentage points of benefit from the tariff refunds, increased from the prior-year operating income margin rate of 5.2 percent. Second quarter gross margin rate was 33.7 percent, reflecting 3.7 percentage points of benefit from tariff refunds. Excluding tariff refunds, second quarter gross margin rate expanded approximately 100 basis points over prior year margin rate of 29.0 percent, reflecting the comparison over last year's elevated markdowns and purchase order cancellation costs, as well as continued growth in advertising and non-merchandise sales. Second quarter SG&A expense rate was 21.6 percent, compared with prior-year SG&A expense rate of 21.3 percent. This increase reflects the impact of higher compensation costs, including additional hours for field teams and higher incentive compensation, as well as planned spending related to capital projects, partially offset by the leverage benefit of strong topline growth.

Interest Expense and Taxes
The Company’s second quarter 2026 net interest expense was $98 million, compared with $116 million last year, reflecting higher interest income in the current year.

Second quarter 2026 effective income tax rate was 23.7 percent, compared with the prior year rate of 23.2 percent reflecting higher pretax earnings partially offset by additional tax credit benefits in the current year.

Capital Deployment and Return on Invested Capital
Second quarter capital expenditures of $1.4 billion were 27 percent higher than last year, driven primarily by increased investments in store remodels and new stores.

The Company paid dividends of $518 million in the second quarter, compared with $509 million last year, reflecting a 1.8 percent increase in the dividend per share.

– more –
Target Corporation Reports Second Quarter Earnings — Page 4 of 13
The Company did not repurchase any stock in the second quarter. As of the end of the 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 second quarter 2026, after-tax return on invested capital (ROIC) was 15.4 percent, compared with 14.3 percent for the trailing twelve months through second quarter 2025. The tables in this release provide additional information about the Company’s ROIC calculation.

Webcast Details
Target will webcast its second quarter earnings conference call at 7:00 a.m. CT today. Investors and the media are invited to listen to the meeting at Corporate.Target.com/Investors (click on “Q2 2026 Target Corporation Earnings Conference Call” under “Events & Presentations”). A replay of the webcast will be provided when available. The replay number is 1-800-365-2419.

Miscellaneous
Statements in this release regarding the Company’s future financial performance, including its fiscal 2026 full-year guidance and strategic plans, 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 January 31, 2026. 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
Target Corporation (NYSE: TGT) brings together style, design and value to offer a distinct assortment and elevated shopping experience across more than 2,000 U.S. stores and online. Powered by more than 400,000 team members, Target serves millions of families each week and invests in the communities where they live and work to support growth and opportunity for all.


###

Target Corporation Reports Second Quarter Earnings — Page 5 of 13
TARGET CORPORATION
 
Consolidated Statements of Operations
Three Months EndedSix Months Ended
(millions, except per share data) (unaudited)August 1, 2026August 2, 2025ChangeAugust 1, 2026August 2, 2025Change
Net sales$26,539 $25,211 5.3 %$51,982 $49,057 6.0 %
Cost of sales17,603 17,903 (1.7)35,664 35,031 1.8 
Selling, general, and administrative expenses
5,725 5,359 6.8 11,286 9,950 13.4 
Depreciation and amortization (exclusive of depreciation included in cost of sales)
651 632 3.2 1,337 1,287 3.9 
Operating income
2,560 1,317 94.4 3,695 2,789 32.5 
Net interest expense98 116 (16.1)215 232 (7.4)
Net other expense / (income)3 (17)(114.9)(13)(43)(72.0)
Earnings before income taxes
2,459 1,218 101.9 3,493 2,600 34.3 
Provision for income taxes582 283 105.8 835 629 32.7 
Net earnings $1,877 $935 100.8 %$2,658 $1,971 34.9 %
Basic earnings per share
$4.13 $2.06 100.8 %$5.85 $4.33 35.1 %
Diluted earnings per share
$4.11 $2.05 100.3 %$5.83 $4.32 34.8 %
Weighted average common shares outstanding
Basic454.4 454.6 0.0 %454.1 454.8 (0.1)%
Diluted456.6 455.6 0.2 %456.2 456.1 0.0 %
Antidilutive shares0.7 5.0 0.9 2.3 
Dividends declared per share$1.16 $1.14 1.8 %$2.30 $2.26 1.8 %


Target Corporation Reports Second Quarter Earnings — Page 6 of 13
TARGET CORPORATION
 
Consolidated Statements of Financial Position
(millions, except footnotes) (unaudited)August 1, 2026January 31, 2026August 2, 2025
Assets
Cash and cash equivalents$5,411 $5,488 $4,341 
Inventory13,249 12,304 12,881 
Other current assets2,268 2,213 1,812 
Total current assets20,928 20,005 19,034 
Property and equipment, net34,767 33,749 33,568 
Operating lease assets3,587 3,703 3,694 
Other noncurrent assets1,953 2,033 1,555 
Total assets$61,235 $59,490 $57,851 
Liabilities and shareholders’ investment
Accounts payable$13,306 $12,622 $12,019 
Accrued and other current liabilities6,738 6,478 6,068 
Current portion of long-term debt and other borrowings1,136 2,130 1,136 
Total current liabilities21,180 21,230 19,223 
Long-term debt and other borrowings14,221 14,326 15,320 
Noncurrent operating lease liabilities3,332 3,462 3,514 
Deferred income taxes2,504 2,265 2,413 
Other noncurrent liabilities2,155 2,042 1,961 
Total noncurrent liabilities22,212 22,095 23,208 
Shareholders’ investment
Common stock38 38 38 
Additional paid-in capital7,329 7,247 7,084 
Retained earnings10,890 9,297 8,766 
Accumulated other comprehensive loss(414)(417)(468)
Total shareholders’ investment17,843 16,165 15,420 
Total liabilities and shareholders’ investment$61,235 $59,490 $57,851 
Common Stock Authorized 6,000,000,000 shares, $0.0833 par value; 454,291,461, 452,840,187, and 454,396,092 shares issued and outstanding as of August 1, 2026, January 31, 2026, and August 2, 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 Second Quarter Earnings — Page 7 of 13
TARGET CORPORATION
 
Consolidated Statements of Cash Flows
Six Months Ended
(millions) (unaudited)August 1, 2026August 2, 2025
Operating activities
Net earnings $2,658 $1,971 
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization1,597 1,558 
Share-based compensation expense154 133 
Deferred income taxes238 112 
Noncash (gains) / losses and other, net (4)1 
Changes in operating accounts:
Inventory(945)(141)
Other assets22 151 
Accounts payable612 (1,125)
Accrued and other liabilities187 (302)
Cash provided by operating activities4,519 2,358 
Investing activities
Expenditures for property and equipment(2,404)(1,864)
Other7 11 
Cash used in investing activities(2,397)(1,853)
Financing activities
Additions to long-term debt— 1,984 
Reductions of long-term debt(1,070)(1,571)
Dividends paid(1,034)(1,019)
Repurchase of stock(3)(258)
Shares withheld for taxes on share-based compensation(92)(62)
Cash used in financing activities(2,199)(926)
Net decrease in cash and cash equivalents(77)(421)
Cash and cash equivalents at beginning of period5,488 4,762 
Cash and cash equivalents at end of period$5,411 $4,341 


Target Corporation Reports Second Quarter Earnings — Page 8 of 13
TARGET CORPORATION
 
Operating Results

Net SalesThree Months EndedSix Months Ended

(millions) (unaudited)
August 1, 2026August 2, 2025August 1, 2026August 2, 2025
Apparel & accessories$4,090 $4,086 $7,937 $7,797 
Beauty3,639 3,396 7,037 6,498 
Food & beverage5,991 5,588 12,255 11,490 
Hardlines (Fun 101)3,894 3,522 7,415 6,597 
Home furnishings & décor3,668 3,662 6,906 6,880 
Household essentials4,617 4,422 9,187 8,779 
Other merchandise sales48 43 104 83 
Merchandise sales25,947 24,719 50,841 48,124 
Advertising revenue (a)
279 217 525 379 
Credit card profit sharing 139 134 269 275 
Other174 141 347 279 
Net sales$26,539 $25,211 $51,982 $49,057 
(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 Selling, General, and Administrative (SG&A) Expenses, depending on the nature of the advertising arrangement.


Target Corporation Reports Second Quarter Earnings — Page 9 of 13

Operating MetricsThree Months Ended
(dollars in millions) (unaudited)August 1, 2026August 2, 2025
DollarsRateDollarsRate
Gross margin (a)
$8,936 33.7 %$7,308 29.0 %
SG&A expenses5,725 21.6 5,359 21.3 
Adjusted SG&A expenses (b)
5,725 21.6 5,359 21.3 
Depreciation and amortization (exclusive of depreciation included in cost of sales)
651 2.5 632 2.5 
Operating income (a)
2,560 9.6 1,317 5.2 
Adjusted operating income (a)(b)
2,560 9.6 1,317 5.2 
Operating MetricsSix Months Ended
(dollars in millions) (unaudited)August 1, 2026August 2, 2025
DollarsRateDollarsRate
Gross margin (a)
$16,319 31.4 %$14,026 28.6 %
SG&A expenses11,286 21.7 9,950 20.3 
Adjusted SG&A expenses (b)
11,286 21.7 10,543 21.5 
Depreciation and amortization (exclusive of depreciation included in cost of sales)
1,337 2.6 1,287 2.6 
Operating income (a)
3,695 7.1 2,789 5.7 
Adjusted operating income (a)(b)
3,695 7.1 2,196 4.5 
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)    For the three and six months ended August 1, 2026, gross margin, Operating income, and Adjusted operating income include a $994 million benefit from tariff refunds received during the second quarter of 2026, which are classified as a reduction of Cost of Sales. Tariff refunds provided 3.7 and 1.9 percentage points of benefit to Gross margin rate, Operating income margin rate, and Adjusted operating income margin rate for the three and six month periods, respectively.
(b)    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 Second Quarter Earnings — Page 10 of 13
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 applications and the Company's websites.

Comparable SalesThree Months EndedSix Months Ended
(unaudited)August 1, 2026August 2, 2025August 1, 2026August 2, 2025
Comparable sales change3.8 %(1.9)%4.7 %(2.8)%
Drivers of change in comparable sales
Number of transactions (traffic)3.6 (1.3)4.0 (1.8)
Average transaction amount0.2 (0.6)0.7 (1.0)

Comparable Sales by ChannelThree Months EndedSix Months Ended
(unaudited)August 1, 2026August 2, 2025August 1, 2026August 2, 2025
Stores originated comparable sales change2.7 %(3.2)%3.7 %(4.4)%
Digitally originated comparable sales change8.7 4.3 8.8 4.5 
 
Merchandise Sales by ChannelThree Months EndedSix Months Ended
(unaudited)August 1, 2026August 2, 2025August 1, 2026August 2, 2025
Stores originated80.4 %81.1 %80.1 %80.7 %
Digitally originated19.6 18.9 19.9 19.3 
Total100 %100 %100 %100 %

Merchandise Sales by Fulfillment ChannelThree Months EndedSix Months Ended
(unaudited)August 1, 2026August 2, 2025August 1, 2026August 2, 2025
Stores 97.6 %97.7 %97.6 %97.7 %
Other2.4 2.3 2.4 2.3 
Total100 %100 %100 %100 %
Note: Merchandise 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 FeetNumber of Stores
Retail Square Feet (a)
(unaudited)August 1,
2026		January 31,
2026		August 2,
2025		August 1,
2026		January 31,
2026		August 2,
2025
170,000 or more sq. ft.274 273 273 49,045 48,824 48,824 
50,000 to 169,999 sq. ft.1,598 1,576 1,562 200,321 197,274 195,436 
49,999 or less sq. ft.147 146 147 4,460 4,420 4,445 
Total2,019 1,995 1,982 253,826 250,518 248,705 
(a)In thousands; reflects total square feet less office, supply chain facility, and vacant space.


Target Corporation Reports Second Quarter Earnings — Page 11 of 13
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
August 1, 2026August 2, 2025
(millions, except per share data) (unaudited)PretaxNet of TaxPer SharePretaxNet of TaxPer ShareChange
GAAP and Adjusted EPS
$4.11 $2.05 100.3 %
Reconciliation of Non-GAAP
Adjusted EPS		Six Months Ended
August 1, 2026August 2, 2025
(millions, except per share data) (unaudited)PretaxNet of TaxPer SharePretaxNet of TaxPer ShareChange
GAAP diluted EPS
$5.83 $4.32 34.8 %
Adjustments
Interchange fee settlements (a)
$— $— $— $(593)$(441)$(0.97)
Adjusted EPS
$5.83 $3.35 73.7 %

Reconciliation of Non-GAAP Adjusted SG&A Expenses and Adjusted Operating IncomeThree Months Ended
August 1, 2026August 2, 2025
SG&A Expenses
Operating Income (b)
SG&A ExpensesOperating Income
(dollars in millions) (unaudited)DollarsRateDollarsRateDollarsRateDollarsRate
GAAP and Adjusted measures$5,725 21.6 %$2,560 9.6 %$5,359 21.3 %$1,317 5.2 %
Reconciliation of Non-GAAP Adjusted SG&A Expenses and Adjusted Operating IncomeSix Months Ended
August 1, 2026August 2, 2025
SG&A Expenses
Operating Income (b)
SG&A ExpensesOperating Income
(dollars in millions) (unaudited)DollarsRateDollarsRateDollarsRateDollarsRate
Reported, GAAP measure$11,286 21.7 %$3,695 7.1 %$9,950 20.3 %$2,789 5.7 %
Adjustments
Interchange fee settlements (a)
— — — — $593 1.2 %$(593)(1.2)%
Adjusted, Non-GAAP measure$11,286 21.7 %$3,695 7.1 %$10,543 21.5 %$2,196 4.5 %

Note: Amounts may not foot due to rounding.
(a)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. The adjustment removes the favorable impact of the settlement gains from prior-year EPS, SG&A expenses and Operating income.
(b)Note (a) to the Operating Metrics tables provides information about the impact of tariff refunds on Operating income and Operating income margin rate.

Target Corporation Reports Second Quarter Earnings — Page 12 of 13
We have 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. We believe this metric is useful in assessing the effectiveness of our 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
August 1, 2026August 2, 2025
Operating income
$6,024 $5,425 
 + Net other income
64 99 
EBIT
6,088 5,524 
 + Operating lease interest (a)
172 166 
  - Income taxes (b)
1,402 1,305 
Net operating profit after taxes$4,858 $4,385 

Denominator
August 1, 2026August 2, 2025August 3, 2024
Current portion of long-term debt and other borrowings$1,136 $1,136 $1,640 
 + Noncurrent portion of long-term debt14,221 15,320 13,654 
 + Shareholders' investment17,843 15,420 14,429 
 + Operating lease liabilities (c)
3,733 3,883 3,786 
  - Cash and cash equivalents
5,411 4,341 3,497 
Invested capital$31,522 $31,418 $30,012 
Average invested capital (d)
$31,470 $30,715 
After-tax return on invested capital (e)
15.4 %14.3 %
(a)Represents the add-back to operating income driven by the hypothetical interest expense we would incur if the property under our operating leases was owned or accounted for under 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 us and our competitors.
(b)Calculated using the effective tax rates, which were 22.4 percent and 22.9 percent for the trailing twelve months ended August 1, 2026, and August 2, 2025, respectively. For the twelve months ended August 1, 2026, and August 2, 2025, includes tax effect of $1.4 billion and $1.3 billion, respectively, related to EBIT, and $39 million and $38 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, respectively.
(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 August 1, 2026, includes the impact of tariff refunds, which increased after-tax ROIC by 2.4 percentage points, and business transformation costs incurred in the trailing twelve-month period, which decreased after-tax ROIC by 0.6 percentage points. For the trailing twelve months ended August 2, 2025, includes the impact of after-tax net gains on interchange fee settlements, which increased after-tax ROIC by 1.4 percentage points.

Target Corporation Reports Second Quarter Earnings — Page 13 of 13
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)
Full Year 2026
GAAP diluted earnings per share guidance
$9.90 - $10.90
Estimated adjustments
Other
Adjusted diluted earnings per share guidance
$9.90 - $10.90
Note:    The guidance includes second quarter tariff refund benefits of approximately $1.65, but excludes any potential future refunds.


Source: View Original Filing on SEC EDGAR

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