Target posts falling sales, beats EPS expectations and vows growth

Target reported another quarter of declining sales and profits for the three months ended Jan. 31, 2026, recording $30.45 billion in net sales, down 1.5% year over year, and GAAP net income of $1.05 billion, or $2.30 a share. The results continue a pattern of weak same-store performance: comparable-store sales fell 2.5% in the November-to-January period, marking 11 of the past 13 quarters with declines or flat growth.

On the bottom line, Target presented adjusted earnings of $2.44 a share, outpacing the FactSet consensus of $2.16, while sales were essentially in line with analyst forecasts of $30.46 billion. The market reacted in the pre-market session, with shares jumping more than 4% after the release. For the full fiscal year, total sales slipped nearly 2% to $104.78 billion.

The results arrive as Michael Fiddelke, a 20-year Target veteran who succeeded longtime CEO Brian Cornell last month, prepares to outline a turnaround to investors. Fiddelke is expected to present details at the company’s annual meeting and to unveil an anticipated $1 billion investment plan focused on stores and merchandise. Management also said it believes net sales will grow in each quarter this year and reported that comparable-store sales rose to start the current quarter, language the company framed as early signs of improvement.

Beneath the headline numbers, category and traffic trends illustrate the challenge. Sales fell in apparel and home furnishings, sporting goods and appliances, while modest gains appeared in beauty and food and beverage. Foot traffic declined about 2.9% across the quarter, according to Placer.ai data, with weekend visits falling more sharply, a notable shift because weekend shopper visits tend to capture discretionary, browsing-driven purchases.

The competitive landscape is tightening. Walmart posted a 4.6% increase in same-store sales over the same period, driven largely by grocery strength and Walmart+ membership fees, and off-price chains such as TJ Maxx and Marshalls have drawn shoppers seeking lower-priced options. Industry observers noted Target has ceded some ground to these competitors as customers prioritize essentials and trade down amid persistent inflation and ongoing price sensitivity.

Investors have seized on the company’s forward guidance and the new CEO’s promises, but the underlying picture remains mixed. The quarter’s GAAP earnings and adjusted results offered relief against analyst estimates, and the pre-market rally signaled confidence in management’s plan. Yet the extended stretch of weak comparable sales underscores a longer-term demand problem that a $1 billion reinvestment may only partly address.

Target’s report highlights a familiar retail policy and governance tension: boards and executives must balance near-term investor expectations against structural shifts in consumer behavior. For workers, suppliers and local communities that rely on Target’s store footprint, the company’s strategic choices over pricing, inventory and store investment in the coming months will determine whether the “green shoots” management cites translate into sustained recovery or another quarter of constrained sales.