Target Q1 revenue $25.44B beats Wall Street as sales strengthen

Target reported first-quarter revenue of $25.44 billion on May 20, topping Wall Street estimates and prompting the retailer to raise its annual sales growth forecast for the first time in two years. Adjusted earnings were $1.71 per share for the quarter ended May 2, ahead of analyst expectations of $1.46, according to CNBC and the company’s earnings release. Comparable sales rose 5.6%, and customer traffic increased 4.4%, as Target said growth was broad-based across all six core merchandise categories. The results gave an early test of Chief Executive Michael Fiddelke’s turnaround plan after several quarters of weak demand and market-share pressure. ### Which numbers stood out most in the quarter? Target said net sales increased 6.7% from a year earlier, while net income was $781 million, down from $1.04 billion in the year-ago period. The company said adjusted earnings per share rose from $1.30 a year earlier to $1.71. CNBC reported analysts surveyed by LSEG had expected revenue of $24.64 billion and earnings per share of $1.46. (cnbc.com) The company’s earnings release said comparable sales were driven by a 4.7% increase in store-originated comparable sales and an 8.9% rise in digital comparable sales. Same-day delivery through Target Circle 360 was one contributor to digital growth, according to reports summarizing the company’s call and release. ### Where did shoppers spend more? Target said sales increased in all six of its core merchandising categories in the quarter. (corporate.target.com) CNBC reported the strongest customer response came in health and wellness, toys and baby, while Reuters reported food and beverages rose 6% and toy sales grew at a double-digit rate after the company priced more items below $10. Reuters reported Target’s management said the sales gains reflected investments in lower prices, new merchandise and store improvements. (corporate.target.com) The company opened seven new stores in the quarter and had more than 100 remodel projects in progress, CNBC reported. ### What did Target change in its outlook? Target said it now expects fiscal 2026 net sales growth of about 4%, up from prior guidance of about 2%. (cnbc.com) The company reaffirmed full-year GAAP and adjusted earnings per share guidance of $7.50 to $8.50, according to its earnings release. Reuters said it was the first time in two years that Target had raised its annual sales growth forecast. (streetinsider.com) Bloomberg reported the company’s comparable-sales gain was the biggest since the end of 2021. Reuters said management still warned that the broader economic backdrop remained difficult and consumers remained stretched. ### Why did investors still react cautiously? Bloomberg reported investors focused on management’s cautious tone for the coming months even after the stronger quarter. (corporate.target.com) Reuters cited Morningstar analyst Brett Husslein saying Target still sits in a middle ground in retail and needs strong execution to win back share against Walmart’s price advantage. CNBC reported the quarter covered the three months ended May 2. (bloomberg.com) Target’s updated sales outlook and reaffirmed earnings guidance are set out in the company’s May 20 earnings release, and executives discussed the results on the quarterly earnings call the same day. (cnbc.com)