- 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.
- 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.
- 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.
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.
"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."
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.
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.
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.
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.
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.
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.
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.
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.
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.
(millions, except per share data) (unaudited)
Depreciation and amortization (exclusive of depreciation included in cost of sales)
Current portion of long-term debt and other borrowings
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.
Adjustments to reconcile net earnings to cash provided by operations:
Noncash (gains) / losses and other, net
Shares withheld for taxes on share-based compensation
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
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.
Note: Gross margin is calculated as Net Sales less Cost of Sales. All rates are calculated by dividing the applicable amount by Net Sales.
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.
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.
Drivers of change in comparable sales:
Note: Sales fulfilled by stores include in-store purchases and digitally originated sales fulfilled by shippingmerchandise from stores to guests, Order Pickup, Drive Up, and Same Day Delivery.
Number of Stores and Retail Square Feet
(a) In thousands, reflects total square feet less office, supply chain facility, and vacant space.
