Target (TGT) started the day on a high note, with shares rising 1.8% in pre-market trading after the retail giant delivered a strong financial report for the first quarter of 2026. After a period of challenging consumer sentiment and traffic struggles, the latest numbers signal that Target’s strategy to reset its operating model and refresh its merchandise is finally paying off.
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Target reported first-quarter net sales of $25.4 billion, a 6.7% increase compared to the same period last year. Adjusted earnings per share (EPS) hit $1.71, a 31.6% jump from the adjusted EPS of $1.30 reported in the first quarter of 2025 and a clear beat of the $1.47 consensus estimate.
Target Recovers its Momentum
The core of the positive news lies in the company’s ability to drive traffic back into its stores and online platforms. After four consecutive periods of declining traffic, Target saw a 4.4% increase in customer visits this quarter. This traffic boost helped drive 5.6% growth in comparable sales, a significant turnaround from the decline seen a year ago.
Management pointed to broad strength across all six of Target’s core merchandise categories. Furthermore, the digital side of the business remained a major contributor, with digital comparable sales growing 8.9%. This growth was powered by a 27% surge in same-day delivery services, highlighting the success of the new Target Circle 360 membership program in keeping customers engaged and buying.
Management Raises Expectations for 2026
Given the strong start to the year, Target’s leadership team has boosted its outlook for the remainder of 2026. The company now expects net sales growth to land around 4%, which is two percentage points higher than its previous forecast. Additionally, management expects full-year adjusted EPS to finish near the high end of its prior range of $7.50 to $8.50.
While the company is still navigating a tough macro environment, the improvement in operating margins, which expanded from 3.7% to 4.5%, suggests that Target is becoming more efficient at converting sales into actual profit.
Executives noted that growth in high-margin areas, such as advertising revenue through Roundel and the Target+ marketplace, played a key role in protecting the company’s bottom line even as they continued to invest in store remodels and customer experience.
Risks Still Exist for Target
Despite the upbeat earnings report, the company remains cautious. While traffic and sales are up, consumer confidence and uncertainty regarding future tariffs continue to be points of concern. Investors are watching closely to see if Target can maintain this momentum throughout the rest of the year as the company continues its heavy investment in its long-term growth plan.
Either way, right now the market is rewarding the company for showing that its turnaround efforts are finally producing the results that shareholders have been waiting to see.
Is Target a Good Stock to Buy Right Now?
Analysts remain cautiously optimistic on Target’s long-term outlook. On TipRanks, TGT has a Moderate Buy consensus rating based on 11 Buys, 12 Holds, and two Sell ratings. The average 12-month TGT price target of $130.71 implies 2.7% upside potential from current levels.
