General merchandise retailer Target (NYSE: TGT) reported revenue ahead of Wall Street’s expectations in Q1 CY2026, with sales up 6.7% year on year to $25.44 billion. Its non-GAAP profit of $1.71 per share was 17.3% above analysts’ consensus estimates.
Is now the time to buy Target? Find out by accessing our full research report, it’s free.
Target (TGT) Q1 CY2026 Highlights:
- Revenue: $25.44 billion vs analyst estimates of $24.6 billion (6.7% year-on-year growth, 3.4% beat)
- Adjusted EPS: $1.71 vs analyst estimates of $1.46 (17.3% beat)
- Expects net sales growth of 4% compared to 2025, an increase of 2 percentage points from its prior outlook
- Operating Margin: 4.5%, down from 6.2% in the same quarter last year
- Free Cash Flow was -$319 million compared to -$515 million in the same quarter last year
- Locations: 2,002 at quarter end, up from 1,981 in the same quarter last year
- Same-Store Sales rose 5.6% year on year (-3.8% in the same quarter last year)
- Market Capitalization: $57.79 billion
"First quarter financial results were stronger than expected, providing encouraging early signs that our clarified strategy is resonating with our guests and driving broad-based growth across our business," said Michael Fiddelke, Chief Executive Officer of Target.
Company Overview
With a higher focus on style and aesthetics compared to other large general merchandise retailers, Target (NYSE: TGT) serves the suburban consumer who is looking for a wide range of products under one roof.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
With $106.4 billion in revenue over the past 12 months, Target is a behemoth in the consumer retail sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices. However, its scale is a double-edged sword because it’s harder to find incremental growth when you’ve penetrated most of the market. To expand meaningfully, Target likely needs to tweak its prices or enter new markets.
As you can see below, Target struggled to increase demand as its $106.4 billion of sales for the trailing 12 months was close to its revenue three years ago. This was mainly because it didn’t open many new stores.
This quarter, Target reported year-on-year revenue growth of 6.7%, and its $25.44 billion of revenue exceeded Wall Street’s estimates by 3.4%.
Looking ahead, sell-side analysts expect revenue to grow 1.4% over the next 12 months. While this projection implies its newer products will catalyze better top-line performance, it is still below average for the sector.
ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you’re unstoppable.
These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE.
Store Performance
Number of Stores
A retailer’s store count often determines how much revenue it can generate.
Target listed 2,002 locations in the latest quarter and has kept its store count flat over the last two years while other consumer retail businesses have opted for growth.
When a retailer keeps its store footprint steady, it usually means demand is stable and it’s focusing on operational efficiency to increase profitability.
Same-Store Sales
The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth for a retailer's e-commerce platform and brick-and-mortar shops that have existed for at least a year.
Target’s demand within its existing locations has barely increased over the last two years as its same-store sales were flat. This performance isn’t ideal, and we’d be skeptical if Target starts opening new stores to artificially boost revenue growth.
In the latest quarter, Target’s same-store sales rose 5.6% year on year. This growth was a well-appreciated turnaround from its historical levels, showing the business is regaining momentum.
Key Takeaways from Target’s Q1 Results
Same-store sales was positive for the first time since Q4'24. Revenue and EPS beat, and the company raised full-year revenue growth guidance. Zooming out, we think this quarter featured some important positives. The stock traded up 2% to $129.00 immediately following the results.
Indeed, Target had a rock-solid quarterly earnings result, but is this stock a good investment here? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
