Target delivered its strongest quarterly sales growth in four years. Comparable sales climbed 5.6 percent in the first quarter ended May 2. The figure marked the first positive reading after three straight quarters of declines. Net sales rose 6.7 percent to $25.44 billion. Earnings came in at $781 million, or $1.71 per share.
Analysts had expected $1.47 per share on revenue of about $24.7 billion, according to FactSet data cited by Fortune. The results beat those marks. Shares rose 1.6 percent in premarket trading.
Every one of the retailer’s six core merchandising categories posted gains. Shoppers responded to new collaborations such as Roller Rabbit, whose whimsical apparel and home goods lines found favor. An expanded assortment of toys priced under $10 also drove traffic. Traffic itself increased 4.4 percent, a broad lift across regions and customer types. Digital comparable sales grew 8.9 percent.
The performance arrives three months after Michael Fiddelke took over as chief executive. The 20-year Target veteran inherited a business that had lost ground to Walmart and suffered from complaints about cluttered stores and inconsistent stocking. Target Corporation outlined a $6 billion multiyear plan in March. It called for an incremental $1 billion in operating expenses this year and roughly $5 billion in capital spending focused on store remodels, technology, and supply-chain fixes.
Fiddelke has already reshuffled leadership, hired a former Walmart executive to run supply chain, boosted store payroll and training, and trimmed costs at distribution centers and regional offices. Seventy-five percent of decorative home accessories, including pillows and candles, are now new. The company aims to reclaim its reputation for stylish yet affordable goods that once earned it the nickname “Tarzhay.”
“We’re encouraged to see a strong guest response so far,” Fiddelke said, per Fortune. But he struck a measured tone. “We’re maintaining a cautious outlook given the work we know we have in front of us and ongoing uncertainty in the macroeconomic environment.” On the earnings call he added that the consumer remains resilient despite mixed headwinds, according to a CNBC report published the same day.
Even with this early progress, we know our work is just beginning. These are areas where we bring style, design, and value to not only the products we sell, but how we sell them, creating a distinctly Target experience. The CEO’s comments reflect both satisfaction and realism.
Target raised its full-year guidance. It now projects net sales growth around 4 percent, up from the 2 percent forecast issued in March. That would push annual revenue near $109 billion. Earnings per share should land near the high end of the $7.50 to $8.50 range provided earlier. Analysts had modeled roughly $8.12 per share and $107.15 billion in sales.
The retailer also expects operating margin to expand more than 20 basis points from last year’s level. Non-merchandise revenue, which includes advertising through Roundel and membership programs like Target Circle, jumped nearly 25 percent. Same-day delivery services grew more than 27 percent.
Yet challenges linger. The company acknowledged that boycotts tied to its rollback of diversity initiatives weighed on sales in prior periods. Political tensions around its Minneapolis headquarters added another layer of scrutiny. Fiddelke signed an open letter with other Minnesota CEOs calling for de-escalation after protester deaths linked to immigration enforcement.
Bigger-picture retail data shows consumers are selective. U.S. retail sales rose 0.5 percent in April, according to the Census Bureau, with gains partly driven by higher gasoline prices. Core retail excluding autos, gas, and restaurants grew modestly. Value-oriented retailers such as TJX Companies reported strong results the same week, underscoring a consumer tilt toward deals and affordable discretionary items. X posts reacting to the earnings noted that consumers appear bruised but not broken when price, product, and experience align.
Target’s own history underscores the stakes. Full-year 2025 comparable sales fell 2.6 percent. The chain lost market share in apparel and home goods. Executives no longer describe the store as an everything retailer. Instead they emphasize differentiation through trend-right assortments, faster checkout, and cleaner presentation. Remodels planned for 130 locations this year represent the largest store refresh in a decade. More than 30 new stores will open, including the company’s 2,000th location.
Supply-chain reliability remains a priority. Out-of-stocks frustrated shoppers in recent years. The new supply-chain leader from Walmart is expected to address that weakness. Technology investments aim to speed personalization and inventory accuracy. Training dollars target better in-store execution.
Investors appear willing to give the new team time. Shares have climbed nearly 20 percent so far this year after falling almost 30 percent in 2025. The quarterly dividend remains intact at $1.14 per share. Return on invested capital over the trailing 12 months stood at 12.4 percent.
Fiddelke has avoided bold predictions. The first-quarter beat does not erase years of pressure. But the breadth of improvement, from traffic to digital to every merchandise category, suggests the initial moves are landing. Shoppers are noticing the fresher assortments and friendlier stores. Whether that translates into sustained gains will depend on execution through the rest of the year and the consumer’s willingness to spend on items beyond pure necessities.
Competitive intensity has not eased. Walmart continues to press on price and assortment. Off-price chains capture value seekers. Amazon looms in digital. Target’s bet is that a sharper focus on style at accessible price points, paired with operational improvements, can carve out distinct ground. Early evidence from the quarter supports that thesis. The coming quarters will test its durability.
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