| Imagery Source: Target Corporation |
| Information Source: Target Corporation |
| Target's Board of Directors unanimously appoints Michael Fiddelke to serve as Target's next CEO. |
- Second quarter net sales were $25.2 billion, (0.9) per cent lower than 2024, representing a nearly 2 percentage point improvement versus the first quarter.
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- Traffic and sales trends improved meaningfully compared with the first quarter, particularly in stores.
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- All six core merchandising categories saw comparable sales improvements compared with the first quarter.
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- Digital comparable sales grew 4.3 per cent, reflecting more than 25% growth in same-day delivery powered by Target Circle 360 and continued growth in Drive Up.
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- Non-merchandise sales grew 14.2% with Roundel, membership and marketplace revenues all growing double digits.
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- Second quarter GAAP and Adjusted EPS1 were $2.05, reflecting strong expense management and efficiency gains, helping to offset continued tariff-related and other cost pressures throughout the business.
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| Target Corporation (NYSE: TGT) today announced its second quarter 2025 financial results. The Company reported second quarter GAAP and Adjusted earnings per share1 (EPS) of $2.05 compared with GAAP and Adjusted EPS of $2.57 in 2024. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS. |
| "With the board's unanimous decision to appoint Michael Fiddelke as Target's next CEO, I want to express my full confidence in his leadership and focus on driving improved results and sustainable growth. He's contributed meaningfully during times of change and played a critical role in establishing the differentiated capabilities that will continue to drive Target forward. Michael brings a deep understanding of our business and a genuine commitment to accelerating our progress," said Brian Cornell, chair and chief executive officer of Target Corporation. "Today, we also reported our second quarter earnings, which showed encouraging signs of recovery, including improved traffic and sales trends — particularly in our stores — and disciplined cost management in a challenging retail environment. As we enter the critical back-to-school and holiday seasons, our team remains focused on consistent execution and building momentum as we look ahead to the new year." |
| Guidance |
| For fiscal 2025, the Company is maintaining its expectation of a low-single digit decline in sales, and GAAP EPS of $8.00 to $10.00. Adjusted EPS, which excludes the gains from litigation settlements in the first quarter, is expected to be approximately $7.00 to $9.00. |
| Operating Results |
| Net Sales of $25.2 billion in the second quarter were 0.9 per cent lower than last year, reflecting a merchandise sales decrease of 1.2 per cent, partially offset by a 14.2 per cent increase in non-merchandise sales. Comparable sales decreased 1.9 per cent in the second quarter, reflecting a comparable store sales decline of 3.2 per cent, partially offset by comparable digital sales growth of 4 per cent. Second quarter operating income of $1.3 billion was 19 per cent lower than last year. |
| Second quarter operating income margin rate was per cent in 2025, compared with 6.4 per cent in 2024. Second quarter gross margin rate was 29.0 per cent, compared with 30.0 per cent in 2024, reflecting the net impact of merchandising activities, including higher markdown rates, purchase order cancellation costs, and pressure from category mix, partially offset by lower inventory shrink and growth in advertising and non-merchandise sales. Second quarter SG&A expenses were 0 per cent lower than in 2024, as increased investments in store remodels and general cost increases across the business were offset by disciplined cost management. Second quarter SG&A expense rate was 21.3 per cent, compared with 21.1 per cent in 2024, reflecting the deleveraging effect of lower sales. |
| Interest Expense and Taxes |
| The Company's second quarter 2025 net interest expense was $116 million, compared with $110 million last year, reflecting higher average debt levels in the current year. |
| The second quarter 2025 effective income tax rate was 23.2 per cent, compared with the prior year rate of 22.9 per cent, reflecting the impact of higher global minimum taxes. |
| Capital Deployment and Return on Invested Capital |
| The Company paid dividends of $509 million in the second quarter, compared with $509 million last year, reflecting a 1.8 per cent increase in the dividend per share, offset by the impact of a lower average share count. |
| The Company did not repurchase any stock in the second quarter. As of the end of the quarter, the Company had approximately $8.4 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 2025, after-tax return on invested capital (ROIC) was 14.3 per cent, compared with 16.6 per cent for the trailing twelve months through second quarter 2024. The tables in this release provide additional information about the Company's ROIC calculation. |
| For the full document, click the link below |
| Target Corporation |
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