WS News
19 Aug 2026, 14:22
Target Stock Jumps 5.2% as Sales Momentum Strengthens and 2026 Outlook Rises
Target (NYSE: TGT) shares climbed about 5.2% on Wednesday after the retailer reported strong second-quarter 2026 results, including accelerating comparable sales, robust digital growth and a significant improvement in earnings. The company also raised its full-year sales and earnings outlook.
While tariff refunds provided a substantial boost to reported profits, Target’s underlying results were also strong, with earnings growing even when that benefit is excluded.
Comparable Sales Rise 3.8% as Traffic Improves
Second-quarter net sales increased 5.3% year over year to $26.5 billion, while comparable sales rose 3.8%. Importantly, comparable traffic increased 3.6%, indicating that growth was driven largely by more customers rather than simply higher prices.
Digital comparable sales increased 8.7%, led by more than 25% growth in same-day delivery, while store comparable sales rose 2.7%.
Performance was also broad-based across Target’s merchandise portfolio. All six core categories recorded year-over-year sales growth, while Food & Beverage and Beauty delivered high-single-digit growth. Non-merchandise sales jumped 20.1%, supported by Target’s Roundel advertising business, Target Circle 360 memberships and the Target+ marketplace.
Earnings Double, Though Tariff Refunds Provide a Major Boost
Target reported EPS of $4.11, double the $2.05 recorded a year earlier. However, the headline increase included a substantial $1.65-per-share benefit from tariff refunds.
Even excluding that benefit, EPS increased approximately 20% year over year, providing a stronger indication of improvement in Target’s underlying profitability.
Gross margin also improved. Excluding tariff refunds, the gross margin rate expanded approximately 100 basis points from last year’s 29.0%, helped by lower markdown and purchase-order cancellation costs as well as growth in advertising and other non-merchandise businesses.
Target Raises 2026 Guidance
The upgraded outlook is likely one of the strongest catalysts behind the 5.2% stock gain.
Target now expects full-year net sales growth of around 5%, one percentage point above its previous guidance range. The company also raised GAAP and adjusted EPS guidance to $9.90-$10.90.
Even after removing the tariff-refund benefit, the midpoint of Target’s new earnings forecast is $0.75 above the midpoint of its previous $7.50-$8.50 guidance.
The combination of improving customer traffic, accelerating digital sales, broader category growth and higher underlying earnings expectations suggests Target’s operating recovery is gaining traction. For investors, maintaining this sales momentum without relying heavily on promotional activity will be an important factor to watch through the second half of 2026.
Target (NYSE: TGT) shares climbed about 5.2% on Wednesday after the retailer reported strong second-quarter 2026 results, including accelerating comparable sales, robust digital growth and a significant improvement in earnings. The company also raised its full-year sales and earnings outlook.
While tariff refunds provided a substantial boost to reported profits, Target’s underlying results were also strong, with earnings growing even when that benefit is excluded.
Comparable Sales Rise 3.8% as Traffic Improves
Second-quarter net sales increased 5.3% year over year to $26.5 billion, while comparable sales rose 3.8%. Importantly, comparable traffic increased 3.6%, indicating that growth was driven largely by more customers rather than simply higher prices.
Digital comparable sales increased 8.7%, led by more than 25% growth in same-day delivery, while store comparable sales rose 2.7%.
Performance was also broad-based across Target’s merchandise portfolio. All six core categories recorded year-over-year sales growth, while Food & Beverage and Beauty delivered high-single-digit growth. Non-merchandise sales jumped 20.1%, supported by Target’s Roundel advertising business, Target Circle 360 memberships and the Target+ marketplace.
Earnings Double, Though Tariff Refunds Provide a Major Boost
Target reported EPS of $4.11, double the $2.05 recorded a year earlier. However, the headline increase included a substantial $1.65-per-share benefit from tariff refunds.
Even excluding that benefit, EPS increased approximately 20% year over year, providing a stronger indication of improvement in Target’s underlying profitability.
Gross margin also improved. Excluding tariff refunds, the gross margin rate expanded approximately 100 basis points from last year’s 29.0%, helped by lower markdown and purchase-order cancellation costs as well as growth in advertising and other non-merchandise businesses.
Target Raises 2026 Guidance
The upgraded outlook is likely one of the strongest catalysts behind the 5.2% stock gain.
Target now expects full-year net sales growth of around 5%, one percentage point above its previous guidance range. The company also raised GAAP and adjusted EPS guidance to $9.90-$10.90.
Even after removing the tariff-refund benefit, the midpoint of Target’s new earnings forecast is $0.75 above the midpoint of its previous $7.50-$8.50 guidance.
The combination of improving customer traffic, accelerating digital sales, broader category growth and higher underlying earnings expectations suggests Target’s operating recovery is gaining traction. For investors, maintaining this sales momentum without relying heavily on promotional activity will be an important factor to watch through the second half of 2026.
