Overview
- Target reported fiscal second-quarter revenue of $26.5 billion and adjusted EPS of $4.11, beating expectations and prompting management to raise full-year sales and earnings guidance.
- A $994 million pretax tariff refund materially lifted gross margin and accounted for roughly $1.65 of the quarter's EPS boost, complicating assessment of underlying profit trends.
- Operational moves drove real customer gains with store traffic up 3.6%, comparable sales up 3.8%, digital sales up 8.7% and same-day fulfillment growing by more than 25%.
- The company completed its largest recent wave of store resets—reshaping grocery, toys and value-focused areas—and reported strong early category lifts such as snacks and LEGO.
- Costs are rising as SG&A climbed to 21.6% of sales and management said store-execution work will continue into 2027, leaving investors cautiously hopeful and focused on whether margin gains persist once the refund fades.