Target Corp. (TGT) delivered a stronger-than-expected first-quarter performance, marking an early milestone for new Chief Executive Michael Fiddelke’s turnaround strategy. The retailer on Wednesday raised its annual sales forecast after net sales rose 6.7% to $25.44 billion in the quarter ended May 2, snapping a three-year streak of declining revenue.
The company now projects full-year net sales growth of approximately 4%, two percentage points above its previous guidance. The upward revision is Target’s first in two years, according to Reuters, and signals that efforts to reverse a prolonged slump may be gaining traction.
Comparable sales—a key retail metric that includes stores and digital channels open at least a year—rose 5.6% in the quarter, driven by a 4.4% increase in customer traffic. Digital comparable sales climbed 8.9%, fueled by more than 27% growth in same-day delivery through Target Circle 360. The gains were broad-based, with sales rising across all six core merchandising categories. Non-merchandise revenue, which includes advertising, memberships, and its marketplace, surged nearly 25%.
Fiddelke, who succeeded Brian Cornell in February, has moved aggressively to revitalize the chain. In March, Target announced an incremental $2 billion investment for 2026, covering store payroll, training, new floor plans, improved displays, technology upgrades, and roughly $5 billion in capital spending. The company also cut prices on about 3,000 items in March, including toys, pantry staples, packaged foods, and apparel, aiming to close the value gap with Walmart (WMT) and Amazon (AMZN) while preserving its style and design appeal.
Despite the sales uptick, profitability was mixed. Net income fell to $781 million, or $1.71 per share, from $1.04 billion, or $2.27 per share, a year earlier, partly due to the absence of legal settlement gains that boosted the prior-year quarter. Adjusted earnings of $1.71 per share surpassed analysts’ consensus estimate of $1.47, while revenue exceeded the $24.7 billion expected by FactSet, as reported by the Associated Press.
Fiddelke described the results as “encouraging early signs” that Target’s refined strategy is resonating with shoppers, but he stopped short of declaring a full recovery. On a media call, he maintained “a cautious outlook,” citing ongoing work and an uncertain economic environment. Gross margin improved, helped by supply-chain productivity and lower markdowns, but higher product costs and increased selling, general, and administrative expenses—driven by compensation, training, capital projects, and marketing—weighed on the quarter.
Target now expects full-year earnings per share near the high end of its prior range of $7.50 to $8.50. Morningstar analyst Brett Husslein noted that Target occupies “a middle ground of retail”—neither the cheapest option nor a single-category destination—which Fiddelke aims to address through sharper merchandising, better-stocked shelves, and a more engaging store experience.
Shares of Target traded at $127.24 before the market opened, up $4.04 from the previous close, following a strong run earlier this year. The results come ahead of Walmart’s quarterly report on Thursday, keeping the retail spotlight on the competitive landscape. While the first-quarter rebound offers hope, the coming quarters will determine whether it marks a sustainable turnaround or merely a bounce from weak comparisons.
