Target Corp (NYSE:TGT) stock rose 1.16% (As on March 4, 11:17:47 AM UTC-4, Source: Google Finance) after the company issued an annual same-store sales forecast that exceeded Wall Street expectations though reported another quarter of falling revenue and declining customer traffic at its stores. Food & Beverage, Beauty and Toys delivered net sales growth in the quarter, with stronger trends in Essentials and Home compared to the third quarter. Non-merchandise sales grew over 25 percent with membership revenue more than doubling from a year ago, double-digit growth from Roundel and over 30 percent growth in marketplace. Same-day delivery powered by Target Circle 360 grew over 30 percent. Sales and traffic trends accelerated in the last two months of the quarter.
TGT in the fourth quarter of FY25 has reported the adjusted earnings per share of $2.44, beating the analysts’ estimates for the adjusted earnings per share of $2.16. The company had reported the adjusted revenue decline of 1.5 percent to $30.45 billion in the fourth quarter of FY25, missing the analysts’ estimates for revenue of $30.48 billion. Fourth quarter comparable sales decreased 2.5 percent, reflecting a comparable store sales decline of 3.9 percent and a comparable digital sales increase of 1.9 percent. Operating income, which includes the impact of non-recurring items, was $1.4 billion in fourth quarter 2025, a decrease of 5.9 percent from $1.5 billion in 2024. Fourth quarter operating income margin rate, which includes the impact of non-recurring items, was 4.5 percent in 2025 compared with 4.7 percent in 2024. Excluding those non-recurring items, Adjusted operating income margin rate was 4.8 percent in 2025.
Additionally, the Company did not repurchase any shares in the fourth quarter. As of the end of the fourth quarter, the Company had approximately $8.3 billion of remaining capacity under the repurchase program approved by Target’s Board of Directors in August 2021.
The Minneapolis-based company projects 2026 net sales growth of 2% compared to 2025, surpassing analyst estimates of 1.76%, according to data compiled by LSEG. Target attributed the outlook to anticipated demand for categories including apparel, along with benefits from recent cost saving initiatives and its advertising business. For the full year, Target expects earnings per share in the range of $7.50 to $8.50, largely above the consensus estimate of $7.68 per share. Full-year 2026 operating income margin rate approximately 20 basis points higher than the 4.6 percent Adjusted operating income margin rate in 2025.