Companies · TGT
Target
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Latest analysis
Updated Aug 28, 2026
Target Q2 2026: 5.3% sales growth, 94% operating income jump boosted by $994M tariff refunds and Roundel ads scaling.
Target delivered 5.3% net sales growth to $26.5 billion in Q2 2026, driven by 3.8% comparable sales (3.6% traffic, 0.2% average transaction amount) and 20.1% non-merchandise revenue growth led by Roundel advertising. Operating income surged 94.4% to $2.6 billion, but $994 million of that—representing 3.7 percentage points of gross margin benefit—came from tariff refunds received during the period; excluding tariff refunds, operating income growth was approximately 19%. The company opened 17 stores in the quarter, bringing the total to 2,019 locations with 253.8 million retail square feet. Gross margin expanded 480 basis points year-over-year to 33.7% (470 bps excluding tariff benefits), supported by lower merchandise cancellation costs, markdown rates, and supply-chain productivity. After-tax ROIC improved to 15.4% from 14.3%, but this included a 2.4 percentage-point boost from tariff refunds. The company faces ongoing uncertainty around tariff refunds, with additional claims under review subject to legal and regulatory developments.
Tone: bullishRevenue
$104.8B
TGT 10-K · FY 2026
Employees
415,000
Revenue growth YoY
-1.7%
Founded
1902
Profile
TGT 10-K Item 1 · Mar 11, 2026Target Corporation is a large-format omnichannel retailer operating nearly 2,000 stores across the United States, offering a curated assortment of general merchandise and groceries at discounted prices. The company differentiates through owned and exclusive brands, design partnerships, and a store-as-fulfillment-hub model that supports same-day delivery, Order Pickup, and Drive Up. Revenue is supplemented by advertising services through Roundel, credit card profit-sharing, and its Target Plus third-party digital marketplace.
Read filing description ↓ Collapse description ↑
Target Corporation was incorporated in Minnesota in 1902. Our corporate purpose is to help all families discover the joy of everyday life. We offer our customers, referred to as 'guests,' fashionable, differentiated merchandise and everyday essentials at discounted prices. We operate as a single segment designed to enable guests to purchase products seamlessly in stores or through our digital channels. Since 1946, we have given 5 percent of our profit to communities. The vast majority of our Net Sales are generated by the sale of merchandise to customers. Our strategy continues to leverage stores as fulfillment hubs, with stores fulfilling more than 97 percent of total Merchandise Sales in each of the last three years, which provides convenience for our guests at a reduced fulfillment cost. In addition to Merchandise Sales, we generate revenue from other sources, most notably advertising revenue and credit card profit-sharing income. We generate revenue through a variety of other sources, including Roundel, which provides advertising services to vendors and other third parties, including marketplace sellers; credit card profit sharing related to our Target Circle Card program; our third-party digital marketplace, Target Plus; membership fees; and others. Approximately thirty percent of our Merchandise Sales come from our owned and exclusive brands. We also sell merchandise through periodic exclusive design and creative partnerships, and shop-in-shop experiences, with partners such as Apple, Levi's, and Ulta Beauty, and generate revenue from in-store amenities such as Starbucks and Target Optical.
Primary products
- General merchandise
- Groceries
- Owned and exclusive brands
- Target Circle loyalty program
- Target Circle Card
- Target Circle 360 membership
Business segments
End markets
Geographies
“Our ability to positively differentiate ourselves from other retailers and provide compelling value to our guests largely determines our competitive position within the retail industry.” Competitive position, as stated in the filing
Revenue commentary · FY 2026
Net Sales decreased $1.8 billion, or 1.7 percent, from the prior year, driven by a 2.6 percent decline in comparable sales reflecting a 2.2 percent decrease in traffic and a 0.4 percent decrease in average transaction amount.
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