Overview

• Adjusted earnings were $2.05 per share versus $2.01 expected, with comparable sales down 1.9% and gross margin slipping to 29% from 30% a year ago.
• Net sales fell 0.9% to $25.2 billion, and the stock dropped about 9% in premarket trading.
• Target maintained full-year guidance for adjusted EPS of $7 to $9 and forecast a low-single-digit decline in comparable sales.
• Store comps fell 3.2% as digital comparable sales rose 4.3%, with transactions down 1.3% and average ticket down 0.6%.
• Management cited persistent headwinds including higher tariffs and softer traffic, and the company flagged operational fixes, a planned CEO transition to Michael Fiddelke on Feb. 1, 2026, and the Ulta in-store partnership ending in August 2026.