Target posts stronger-than-expected Q1, returns to same-store sales growth
Target’s first same-store sales gain in five quarters came with higher traffic, faster digital growth and a lifted outlook that could reshape store expectations.
Target’s spring rebound looks less like a Wall Street blip and more like a floor-level shift: more guests came in, digital orders kept growing and management is now guiding the business toward a bigger year. The company said net sales rose 6.7% to $25.4 billion in the quarter, comparable sales increased 5.6% and comparable traffic climbed 4.4% from a year earlier. Comparable digital sales grew 8.9%, helped by more than 27% growth in same-day delivery through Target Circle 360.
For Target team members, the more meaningful detail is that this was the first positive same-store sales quarter in five quarters. Gains showed up across all six core merchandising categories, with especially strong response in health and wellness, toys and baby. That kind of broad-based lift suggests guests were buying across the store, not just chasing discounts, which can give leaders a little more room on inventory planning and assortment. Non-merchandise sales rose nearly 25%, lifted by Roundel ad revenue, Target Circle 360 membership revenue and Target+ marketplace sales.
Chief executive Michael Fiddelke, who took over in February after serving as chief operating officer, said the quarter showed "encouraging early signs" that Target’s clarified strategy was resonating with guests and driving broad-based growth across the business. He also said the first quarter "represents the start of our journey." The company raised its full-year 2026 net sales growth outlook to around 4%, two percentage points above its prior range, and said earnings should land near the high end of its $7.50 to $8.50 forecast. Target also said its operating income margin rate should be more than 20 basis points above the 4.6% adjusted margin rate in 2025.
That stronger outlook does not just change the numbers in Minneapolis. It changes the pressure in stores. Target said it is backing its turnaround with an incremental $2 billion investment in 2026, including more than $1 billion in capital spending and $1 billion in operating investment for store layouts, payroll, training, technology and assortment. More than 100 remodels were underway, seven new stores opened in the quarter, and the company plans to open more than 30 stores in 2026, including its 2,000th location in Fuquay-Varina, North Carolina. For workers, that can mean better tools and more support on the floor, but it can also mean a higher bar as leadership tries to turn one strong quarter into a sustained run.
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