Target Q1 Sales Rise 6.7% to $25.4B, EPS Jumps 32%, Raises 4% Guidance
Target reported Q1 net sales of $25.4 billion, up 6.7%, with a 5.6% comparable-sales gain driven by 4.7% store and 8.9% digital growth, delivering adjusted EPS of $1.71, a 32% increase. Robust margins and nearly 25% growth in advertising and membership revenue underpinned a full-year sales growth raise to around 4%.
1. Q1 Financial Highlights
Target’s Q1 net sales reached $25.4 billion, up 6.7% year-over-year, driven by a 5.6% comparable-sales increase. Store-originated sales rose 4.7% while digital comps grew 8.9%, bolstered by same-day delivery; customer traffic climbed 4.4%, and adjusted EPS jumped 32% to $1.71.
2. Margin Improvement and Revenue Diversification
Gross margin expanded to 29%, up from 28.2%, thanks to improved supply-chain productivity, higher advertising revenue, and reduced markdowns, partially offset by elevated product costs. Revenue outside merchandise, including advertising, membership fees, and the marketplace, surged nearly 25%, with same-day delivery revenue up over 27%.
3. Guidance Raise and Store Investments
Following the strong quarter, Target raised its full-year net sales growth target to approximately 4% and now expects full-year EPS toward the upper end of the $7.50-$8.50 range. Capital investments totaled $1 billion, up 31%, funding seven new store openings, over 100 renovations, and upcoming food and beauty format rollouts.