Target Corporation (TGT) Q1 2023 Financial Results Summary

2026-05-20 · Stocks · QuoteReporter

Target Corporation (TGT) Q1 2026 Financial Results Summary

Reported on May 20, 2026

Financial Highlights

Net Sales
- Recorded net sales of $25.4 billion, up 6.7% compared to $23.8 billion in Q1 2025.
- Merchandise sales increased 6.4% while non-merchandise sales surged 24.6%.
- Digital comparable sales rose by 8.9%, with same-day delivery via Target Circle 360 growing over 27%.
- Comparable sales increased by 5.6%, driven by a 4.4% rise in store traffic and an 1.1% increase in average transaction amount.
Earnings
- Q1 GAAP EPS at $1.71, down 24.5% from $2.27 the previous year, impacted by non-recurring legal settlement gains recorded in the prior year.
- Adjusted EPS was $1.71, up 32% compared to prior year's Adjusted EPS of $1.30.

Operational Metrics

Operating Income
- Operating income for Q1 was $1.1 billion, a 22.9% decrease from $1.5 billion in Q1 2025.
- Adjusted operating income improved 29.1%, reaching $1.1 billion from $879 million in the prior year.
Margins
- First-quarter operating margin rate stood at 4.5%, down from 6.2% the previous year.
- Adjusted operating margin rate was 4.5%, compared to 3.7% in the previous year.
- Gross margin increased to 29.0%, up from 28.2% year-on-year, attributed to better productivity in the supply chain and lower markdown rates.

Expenses

Selling, General and Administrative (SG&A) expenses amounted to $5.6 billion, up 21.1% from $4.6 billion last year.
SG&A expense rate at 21.9%, compared to 19.3% in Q1 2025, due to higher compensation costs and elevated marketing expenses.

Capital Management

Dividends
- Dividends declared totaled $516 million, an increase of 1.8% from $510 million last year, resulting in a dividend per share rise to $1.14 from $1.12.
Capital Expenditures
- Capital expenditures reached $1.0 billion, reflecting a 31% increase year-over-year, primarily for new store investments and remodels.
Share Repurchase
- No stock was repurchased during Q1, maintaining approximately $8.3 billion in capacity under the existing buyback program.

Tax and Interest

Net interest expense was $117 million, slightly up from $116 million the prior year.
The effective income tax rate decreased to 24.4% from 25.0% year-on-year, reflecting lower discrete tax expenses.

Guidance for 2026

Net Sales Growth
- Target expects net sales growth at approximately 4% for the full year, revised from the previous estimate.
Operating Income Margin
- Aiming for a full-year operating income margin rate above 20 basis points higher than the 4.6% in 2025.
Earnings Per Share (EPS)
- Projecting GAAP and Adjusted EPS near the top of the guidance range of $7.50 to $8.50.

Return on Invested Capital (ROIC)

The trailing twelve-month ROIC was reported at 12.4%, down from 15.1% for the same period last year.

Summary

Target Corporation reported strong sales growth and continued expansion across various channels in Q1 2026 but saw a decline in GAAP EPS due to last year's one-time gains. The firm emphasized its commitment to growth and investment in its workforce and capabilities, positioning the business for robust future performance.

Note: All amounts are in millions.

TARGET CORPORATION Consolidated Statements of Operations	Three Months Ended	May 2, 2026	May 3, 2025
Net sales	$25,443	$23,846	6.7%
Cost of sales	18,061	17,128	5.4
Selling, general and administrative expenses	5,562	4,591	21.1
Depreciation and amortization (exclusive of depreciation included in cost of sales)	685	655	4.6
Operating income	1,135	1,472	-22.9
Net interest expense	117	116	1.3
Net other income	-15	-26	-43.0
Earnings before income taxes	1,033	1,382	-25.2
Provision for income taxes	252	346	-27.2
Net earnings	$781	$1,036	-24.6%
Basic earnings per share	$1.72	$2.28	-24.4%
Diluted earnings per share	$1.71	$2.27	-24.5%
Weighted average common shares outstanding Basic	453.8	455.0	-0.3%
Diluted	455.8	456.5	-0.2%
Antidilutive shares	1.0	2.4
Dividends declared per share	$1.14	$1.12	1.8%