Target has reported stronger-than-expected fourth-quarter earnings despite a slight decline in sales, as the US retail giant signals a return to growth in 2026.
For the fourth quarter of fiscal 2025, Target posted adjusted earnings of $2.44 per share, surpassing analysts' expectations of $2.17 and slightly ahead of the $2.41 recorded a year earlier. However, net sales fell 1.5% year-on-year to $30.45bn, narrowly missing forecasts.
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Comparable sales declined by 2.5%, reflecting a drop in store transactions, although digital sales grew 1.9%, supported by strong demand for same-day delivery through the Target Circle 360 service.
Non-merchandise activities proved a key growth driver. Advertising revenue from Target's Roundel platform rose to $295m from $190m a year earlier, contributing to more than 25% growth in non-merchandise income overall. Marketplace sales also increased by more than 30%.
Sales growth was recorded in food and beverage, beauty and toys, while discretionary categories such as apparel and home furnishings remained under pressure.
Looking ahead, Target expects net sales to grow by around 2% in fiscal 2026, supported by improved comparable sales, new store openings and expansion in advertising, marketplace and membership services. Earnings per share are projected to reach between $7.50 and $8.50 for the year.
Source: www.nasdaq.com
