# Target Corporation (TGT) Q2 2025 Financial Results Summary
Minneapolis, MN – Target Corporation (NYSE: TGT) announced its second quarter 2025 financial results on August 20, 2025. Below is a summary of the key financial metrics and operational highlights:
– **Net Sales**: $25.2 billion
– Decreased by **0.9%** compared to Q2 2024, a notable improvement from a **2 percentage point** increase from Q1 2025.
– **Traffic and Sales Trends**:
– Significant improvement compared to Q1 across all six core merchandising categories, especially in stores.
– Comparable sales decreased by **1.9%**, with store sales dropping **3.2%** but offset by digital sales growth of **4.3%**.
– Digital comparable sales surged, attributed to a **25%** increase in same-day delivery services.
– **Non-merchandise Sales**:
– Increased by **14.2%**, driven by robust growth in Roundel, membership, and marketplace revenues, all of which saw double-digit increases.
– **Earnings per Share**:
– GAAP and Adjusted EPS reported at **$2.05**, down **20.2%** from $2.57 in Q2 2024.
– **Operating Income**:
– $1.3 billion, which is **19.4%** lower than the previous year.
– Operating income margin decreased from **6.4%** in 2024 to **5.2%** in 2025.
– **Gross Margin Rate**:
– Reported at **29.0%**, which is a decline from **30.0%** year-over-year.
– **Selling, General, and Administrative (SG&A) Expenses**:
– Slightly decreased by **0.1%** to $5.36 billion, with the SG&A expense rate increasing to **21.3%** from the previous year’s **21.1%**.
– **Interest Expense**:
– Net interest expense rose to **$116 million**, up from **$110 million** in 2024.
– **Effective Income Tax Rate**:
– Increased to **23.2%** from **22.9%**.
– **Capital Deployment**:
– Dividends declared amounted to **$509 million**, which represents a **1.8%** increase in dividend per share from last year.
– No stock repurchases were executed in this quarter; however, the company has approximately **$8.4 billion** remaining under its buyback program approved in 2021.
– **Return on Invested Capital (ROIC)**:
– Decreased to **14.3%**, down from **16.6%** a year prior.
– **Guidance for Fiscal 2025**:
– Target anticipates a low-single digit decline in sales for the year and GAAP EPS in the range of **$8.00 to $10.00**.
– Adjusted EPS is forecasted around **$7.00 to $9.00**, excluding gains from litigation settlements recognized in Q1.
– **Total Assets**:
– Increased to **$57.9 billion** from **$56.0 billion** year-over-year.
In conclusion, while Target’s sales and earnings have seen declines compared to the previous year, the company demonstrates strong growth in digital sales and non-merchandise revenues. The appointment of Michael Fiddelke as the new CEO is expected to guide Target through ongoing challenges in the retail landscape, particularly with the back-to-school and holiday seasons approaching.
| Three Months Ended | August 2, 2025 | August 3, 2024 | Change | Six Months Ended | August 2, 2025 | August 3, 2024 | Change |
|---|---|---|---|---|---|---|---|
| Net sales | $25,211 | $25,452 | -0.9% | $49,057 | $49,983 | -1.9% | |
| Cost of sales | $17,903 | $17,826 | 0.4 | $35,031 | $35,297 | -0.8 | |
| Selling, general and administrative expenses | $5,359 | $5,365 | -0.1 | $9,950 | $10,511 | -5.3 | |
| Depreciation and amortization (exclusive of depreciation included in cost of sales) | $632 | $626 | 0.9 | $1,287 | $1,244 | 3.4 | |
| Operating income | $1,317 | $1,635 | -19.4 | $2,789 | $2,931 | -4.8 | |
| Net interest expense | $116 | $110 | 6.3 | $232 | $216 | 7.5 | |
| Net other income | $-17 | $-20 | -11.0 | $-43 | $-49 | -12.1 | |
| Earnings before income taxes | $1,218 | $1,545 | -21.2 | $2,600 | $2,764 | -5.9 | |
| Provision for income taxes | $283 | $353 | -19.9 | $629 | $630 | -0.2 | |
| Net earnings | $935 | $1,192 | -21.5% | $1,971 | $2,134 | -7.6% | |
| Basic earnings per share | $2.06 | $2.58 | -20.2% | $4.33 | $4.62 | -6.1% | |
| Diluted earnings per share | $2.05 | $2.57 | -20.2% | $4.32 | $4.60 | -6.1% | |
| Weighted average common shares outstanding | Basic | 454.6 | 462.5 | -1.7% | 454.8 | 462.4 | -1.7% |
| Diluted | 455.6 | 463.5 | -1.7% | 456.1 | 463.7 | -1.6% | |
| Antidilutive shares | 5.0 | 2.3 | 2.3 | 1.8 | |||
| Dividends declared per share | $1.14 | $1.12 | 1.8% | $2.26 | $2.22 | 1.8% |
| August 2, 2025 | February 1, 2025 | August 3, 2024 | |
|---|---|---|---|
| Assets | |||
| Cash and cash equivalents | $4,341 | $4,762 | $3,497 |
| Inventory | $12,881 | $12,740 | $12,604 |
| Other current assets | $1,812 | $1,952 | $1,817 |
| Total current assets | $19,034 | $19,454 | $17,918 |
| Property and equipment, net | $33,568 | $33,022 | $33,075 |
| Operating lease assets | $3,694 | $3,763 | $3,545 |
| Other noncurrent assets | $1,555 | $1,530 | $1,457 |
| Total assets | $57,851 | $57,769 | $55,995 |
| Liabilities and shareholders’ investment | |||
| Accounts payable | $12,019 | $13,053 | $12,595 |
| Accrued and other current liabilities | $6,068 | $6,110 | $5,749 |
| Current portion of long-term debt and other borrowings | $1,136 | $1,636 | $1,640 |
| Total current liabilities | $19,223 | $20,799 | $19,984 |
| Long-term debt and other borrowings | $15,320 | $14,304 | $13,654 |
| Noncurrent operating lease liabilities | $3,514 | $3,582 | $3,444 |
| Deferred income taxes | $2,413 | $2,303 | $2,495 |
| Other noncurrent liabilities | $1,961 | $2,115 | $1,989 |
| Total noncurrent liabilities | $23,208 | $22,304 | $21,582 |
| Shareholders’ investment | |||
| Common stock | $38 | $38 | $38 |
| Additional paid-in capital | $7,084 | $6,996 | $6,831 |
| Retained earnings | $8,766 | $8,090 | $8,030 |
| Accumulated other comprehensive loss | $-468 | $-458 | $-470 |
| Total shareholders’ investment | $15,420 | $14,666 | $14,429 |
| Total liabilities and shareholders’ investment | $57,851 | $57,769 | $55,995 |
