Target Same-Day Delivery Surges 30% in Q4, Powered by Store Fulfillment

Target's same-day delivery grew more than 30% in the fourth quarter of 2025, the retailer's strongest digital performance metric in an otherwise uneven earnings report, and the gains came not from new infrastructure alone but from the stores team members work in every day.

The growth, highlighted in Target's latest earnings report, was powered primarily by the Target Circle 360 paid membership program, which bundles unlimited same-day delivery with loyalty perks and makes same-day delivery free on orders above $35 for members. The program has effectively turned delivery speed into a retention tool, tying faster fulfillment to membership economics rather than one-off transactions.

The numbers tell a more complicated story behind that headline figure. Fourth-quarter sales fell 3.1% to $30.9 billion, though that comparison was up against a prior-year period that included an extra week. Comparable sales grew 1.5%. Net income dropped 20.2% to $1.1 billion, or $2.41 per diluted share, down from $1.4 billion, or $2.98 per share, in the prior holiday period. Looking ahead, Target is projecting net sales growth of just 1% with same-store sales growth expected to come in "around flat," and earnings per share guidance sits in a range of $8.80 to $9.80.

What's keeping that outlook from being worse is partly the fulfillment infrastructure that store teams have been building toward for years. Target invested $100 million starting in 2023 to scale its sortation center network, which now includes 11 U.S. facilities after opening a Detroit location late last summer. Packages delivered from those sortation centers by Shipt drivers increased 30% in 2024, according to chief operating officer Michael Fiddelke. "That just means a lot more packages delivered in a more cost-efficient manner," Fiddelke said.

The store-as-hub model also reached markets where sortation centers don't yet exist. In a pilot program, Shipt drivers work delivery routes directly from stores, dropping off packages to multiple consumers on a single route. That expansion of store-based fulfillment, combined with easing digital fulfillment costs, helped margins even as top-line growth remained modest.

The infrastructure investments extend beyond sortation. Target acquired a 96-acre distribution center near Denver for $231 million, a deal that closed just before another supply chain milestone in what the company described as continued progress on shortening the last mile.

The same-day growth momentum had already shown up in the third quarter of fiscal 2025, when digital comparable sales grew 2.4%, fueled by more than 35% same-day delivery growth, according to a Zacks analysis of Target's results. That makes Q4's 30%-plus figure part of a sustained trend, not a one-quarter spike.

The competitive pressure to maintain that pace is real. Walmart fulfilled 35% of U.S. digital orders in under three hours in its most recent reported quarter, with expedited delivery sales surging nearly 70%. Best Buy expanded two-hour delivery window scheduling to all markets and logged its fastest shipping fulfillment speeds and highest on-time rate on record. Fast delivery has shifted from a differentiator to a baseline expectation, which means Target's store-based fulfillment strategy needs to keep scaling to hold its position rather than extend it.