Target Corp (NYSE:TGT) has raised its full-year outlook after reporting stronger-than-expected second quarter results.
For the quarter, sales were up 5.3% year-over-year at $26.54 billion, ahead of Wall Street estimates of $26.13 billion. Comparable sales increased 3.8% year over year, while comparable traffic rose 3.6%.
GAAP and adjusted earnings per share came in at $4.11, compared with $2.05 a year earlier and above the consensus estimate of $2.33. The results included $1.65 per share from tariff refund benefits. Excluding those refunds, adjusted EPS was $2.46, representing a 20% year-over-year increase.
Comparable sales at Target stores grew 2.7%, while digital comparable sales increased 8.7%, led by more than 25% growth in same-day delivery.
Sales increased across all six of the company's core merchandise categories, including double-digit growth in Fun 101 and high-single-digit growth in Food & Beverage and Beauty.
Non-merchandise sales grew more than 20%, driven by higher revenue from Roundel advertising, Target Circle 360 memberships and the Target+ marketplace.
Target also highlighted its pricing efforts, noting that it has lowered prices on more than 10,000 items over the past year while continuing to invest in merchandise selection, convenience and its shopping experience.
"Second quarter results build on the encouraging momentum we saw in the first quarter, giving us increasing confidence that our strategy is resonating with our guests and strengthening our leadership position in style, design, and value," Target CEO Michael Fiddelke said in the company's earnings release.
For 2026, Target now expects full-year net sales growth of around 5%, an increase of one percentage point from its previous guidance range.
The company expects a full-year operating income margin rate of around 6%, including approximately 90 basis points of benefit from the second-quarter tariff refunds. Excluding the refunds, Target expects its operating margin rate to be around 50 basis points above last year's adjusted rate of 4.6%.
Target also raised its full-year GAAP and adjusted EPS guidance to $9.90 to $10.90, including approximately $1.65 per share from the second-quarter tariff refunds. Excluding those benefits, the midpoint of the updated range is $0.75 above the midpoint of its previous $7.50 to $8.50 guidance.
Shares of Target were set to open flat at about $152.
