Target raises sales outlook as turnaround investments continue

Target lifted its full-year sales outlook after reporting first-quarter net sales of $25.4 billion, up 6.7 percent from a year earlier. For store teams, the practical question is what that investment push looks like on the floor: schedules, training, remodel work and tighter scrutiny on whether shelves, promos and fulfillment are running cleanly.

Comparable sales rose 5.6 percent and comparable traffic increased 4.4 percent, showing the rebound was not limited to one channel. Digital comparable sales also grew, which keeps store labor, pickup work and merchandising tied together. Target has been making that case since its March 3 strategy update under CEO Michael Fiddelke, when it said it would accelerate growth by spending more on the business while pushing for better operating performance.

That plan includes about $5 billion in 2026 capital investment, more than $1 billion in additional capital spending and $1 billion in additional operating investments. Target also said the extra spending would support more than 130 remodels, 30 new stores, technology upgrades, supply chain work and hundreds of millions of dollars in payroll and training. In a store, that usually shows up as more floor moves, more reset work, more coordination around guests and fulfillment, and more pressure on ETLs and team leads to keep execution tight while the layout keeps changing.

First-quarter capital expenditures were $1.0 billion, up 31 percent from a year earlier, driven mainly by new stores and remodels. Target now expects full-year 2026 net sales growth of around 4 percent, about two percentage points above its prior range, and said operating income margin should finish more than 20 basis points above the 4.6 percent adjusted margin it posted in 2025. Adjusted earnings per share are expected near the high end of the $7.50 to $8.50 range.

The quarter mattered because it marked the first comparable-sales increase in five quarters, a sign that the turnaround is finally getting traction after a long slump. But the market reaction was cautious, with the stock falling in premarket trading despite the beat, a reminder that investors want proof the spending plan can produce cleaner stores, better in-stocks and a steadier margin profile. Target is scheduled to report second-quarter results on Aug. 19.