Target Q1 Net Sales Rise 6.7% to $25.4B, Digital Sales Up 8.9%
First quarter net sales rose 6.7% year-over-year to $25.4 billion while comparable traffic increased 4.4% and digital sales grew 8.9%, including 27% same-day delivery gains. Adjusted EPS of $1.71 beat prior-year’s $1.30 by 32%, and full-year guidance was raised to ~4% net sales growth with higher operating margin.
1. Strong Q1 Sales Growth
Target reported first quarter net sales of $25.4 billion, a 6.7% increase over 2025, driven by a 6.4% merchandise sales rise and a 24.6% jump in non-merchandise revenue. Comparable sales increased 5.6%, including a 4.7% gain in-store and an 8.9% lift in digital, while comparable traffic rose 4.4%.
2. Profitability and EPS Performance
First quarter operating income was $1.1 billion, down 22.9% on a GAAP basis but up 29.1% on an adjusted basis, reflecting higher productivity and lower markdown rates. Adjusted EPS reached $1.71, 32% above last year’s adjusted $1.30, despite a 24% decline versus prior-year GAAP EPS that included nonrecurring legal gains.
3. Digital and Non-Merchandise Gains
Digital comparable sales grew 8.9%, led by a more than 27% increase in same-day delivery volumes, and non-merchandise sales rose nearly 25%, supported by Roundel ad revenue and Target Circle 360 memberships. Supply chain productivity improvements and lower markdown rates underpinned a 29.0% gross margin, up from 28.2% last year.
4. Updated Full-Year 2026 Guidance
Full-year guidance was raised, with net sales now expected to grow around 4%—two percentage points above prior forecasts—and adjusted operating income margin projected more than 20 basis points higher than 2025’s 4.6%. The company anticipates GAAP and adjusted EPS near the high end of the $7.50 to $8.50 range and growth in every quarter.