Target (TGT) Q3 2025 Earnings: EPS Beat, Sales Miss and Holiday Price War Weigh on the Stock

Target Corporation (NYSE: TGT) reported third‑quarter 2025 results today, November 19, posting better‑than‑expected earnings per share but another decline in sales as cautious U.S. shoppers traded down and pulled back on discretionary purchases. Revenue came in slightly below Wall Street forecasts, and shares fell in response, even as management rolled out aggressive holiday discounts and a larger investment plan to revive growth. Target Corporation

As of early afternoon U.S. trading, TGT stock was hovering in the mid‑$80s, down roughly 2–3% on the day, after dropping more than 3% in pre‑market trading following the release. Investing

Target Q3 2025 Earnings at a Glance

For the quarter ended November 1, 2025, Target reported: Target Corporation

Total revenue: $25.27 billion, down about 1.5% year over year, just shy of analyst expectations around $25.3 billion. Target Corporation
GAAP net earnings: $689 million, or $1.51 per share, versus $854 million, or $1.85 per share, a year earlier. Target Corporation
Adjusted EPS: $1.78, about 4% below last year’s $1.85 but ahead of consensus estimates of roughly $1.71–$1.72. Target Corporation
Comparable sales: ‑2.7%, worse than the roughly ‑2.0% decline analysts were expecting. Store comps fell 3.8%, while digital comps grew 2.4%. Target Corporation
Traffic vs. ticket: Transactions declined about 2.2%, and the average basket size edged down about 0.5%, reflecting weaker demand and more price‑sensitive shopping behavior. Target Corporation
Non‑merchandise revenue: Nearly 18% growth, driven by Target’s Roundel advertising business, membership and marketplace fees. Target Corporation
Category trends:
- Strength in toys (nearly +10%) and beverages (+7%), as well as food & beverage and “Fun 101” hardlines. Target Corporation
- Ongoing weakness in discretionary categories such as home and apparel, and a 3.7% decline in household essentials sales. Lipper Alpha Insight
Margins: Operating income was about $0.9 billion, with an operating margin of 3.8% including transformation charges, or 4.4% on an adjusted basis, down from last year’s 4.6%. Target Corporation

On the surface, it’s a classic “mixed quarter”: earnings ahead of estimates but top‑line and traffic still under pressure.

EPS Beat, Sales Miss: How Q3 Stacked Up Against Expectations

Wall Street went into the report expecting a modest step down in profit and another negative comp, but the details still disappointed many investors.

Earnings beat: Adjusted EPS of $1.78 topped consensus of roughly $1.71–$1.72, helped by cost control, higher‑margin advertising and marketplace revenue, and ongoing efficiency efforts. Investing
Revenue miss: Revenue of $25.27 billion fell about 1.6% year over year and came in a touch below estimates near $25.29–$25.33 billion. Reuters
Comparable sales underperform: The ‑2.7% comp decline was steeper than the roughly ‑2.1% drop analysts modeled, with pressure centered in home, apparel and other discretionary lines. Lipper Alpha Insight

The company also absorbed $161 million in pre‑tax business transformation costs (about $0.26 per share), tied to a multi‑year restructuring effort that includes severance and asset‑related charges. Those costs explain much of the gap between GAAP EPS ($1.51) and adjusted EPS ($1.78). Target Corporation

From an investor’s standpoint, the quarter confirms two things:

Profitability is stabilizing thanks to better inventory discipline, more profitable revenue streams and cost initiatives.
Demand is still soft, and Target hasn’t yet turned the corner on comps, traffic or share losses to competitors.

TGT Stock Reaction: Earnings Beat, Shares Still Fall

Despite the EPS beat, Target stock traded lower:

Before the opening bell, TGT dropped about 3.3% in pre‑market trading to roughly $85.6, as traders focused on the sales miss and weak comps. Investing
In regular trading, shares recovered slightly but remained down around 2–3%, changing hands in the mid‑$80s as of early afternoon. TradingView
According to Reuters, the stock has lost around 35% of its value so far this year, underscoring how prolonged Target’s slump has been. Reuters

The market’s message is clear: an EPS beat isn’t enough when sales are shrinking, guidance is trimmed, and heavier discounting is on the way.

Where Target Is Still Growing: Digital, Same‑Day and High‑Margin Revenue

Beneath the soft top‑line, Target is leaning hard into businesses that could make its earnings more resilient over time:

Digital comparable sales rose 2.4%, powered by more than 35% growth in same‑day services such as Drive Up and delivery via Target Circle 360. Target Corporation
Non‑merchandise revenue — advertising (Roundel), membership and marketplace — grew nearly 18%, with Target Plus marketplace gross merchandise value up almost 50%. These are capital‑light, higher‑margin streams. Target Corporation
Target says on‑shelf availability of its most‑shopped items improved by more than 150 basis points versus last year as it rolls out a new market‑fulfilment model across 35 additional markets. Target Corporation
The retailer now offers next‑day delivery to over half of the U.S. population, on top of its suite of same‑day options. Target Corporation

Analysts at Trefis argue that these trends point toward a healthier long‑term earnings mix: more digital, more membership and marketplace, and more advertising dollars that don’t require holding inventory. Trefis

Holiday Playbook: Aggressive Price Cuts and 20,000 New Items

With consumer confidence shaky and discretionary spending under strain, Target is turning this holiday season into a price‑ and value‑driven campaign:

The company is cutting prices on roughly 3,000 food, beverage and essential items, a move aimed squarely at budget‑conscious families. Target Corporation
It has stocked more than 20,000 new items for the holidays — about double last year’s number — with over half exclusive to Target. Many toys are priced under $20, and thousands of gifts start at $5. Target Corporation
Target is advertising a Thanksgiving meal for four under $20 and deeply discounted turkeys (under $1 per pound in most markets), designed to pull traffic into stores early in the season. Target Corporation

Commentary from outlets like TipRanks notes that investors remain skeptical, worrying that heavier discounting could put more pressure on margins even as it helps Target compete more effectively with Walmart and dollar stores on price. TipRanks

Guidance: Lower Top End of Profit Outlook, Bigger Investment Plan

Target’s forward guidance is another reason the stock is under pressure today.

Full‑Year 2025 EPS Outlook

Management narrowed and lowered its full‑year earnings expectations: Target Corporation

GAAP EPS: Now $7.70–$8.70, down from a prior guide of $8.00–$10.00.
Adjusted EPS: Now $7.00–$8.00, versus the previous $7.00–$9.00 range.

That means the top end of both GAAP and adjusted guidance has been cut by about $1 per share, reflecting softer sales trends and the cost of transformation.

Q4 and Holiday Quarter

For the fourth quarter, which includes the heart of the holiday season, Target is:

Reaffirming expectations for a low‑single‑digit decline in comparable sales, roughly in line with year‑to‑date performance. Target Corporation
Flagging a wide range of potential profit outcomes, which one analyst at D.A. Davidson estimated implies Q4 EPS somewhere between roughly $1.87 and $2.87, given all the macro and promotional uncertainty. Reuters

CapEx and Turnaround Investments

If there’s a long‑term positive in the guidance, it’s Target’s willingness to spend more now to fix the business:

The company expects about $4 billion in capital expenditures this year and plans to lift that to roughly $5 billion in 2026, an increase of around $1 billion, to fund new stores, remodels and upgraded digital fulfilment. Target Corporation
These investments come on top of restructuring moves, including the elimination of about 1,800 corporate roles, intended to streamline operations and fund growth priorities. Reuters

Target continues to pay its dividend (about $518 million in Q3) and has resumed modest share repurchases, though management emphasized a cautious approach to buybacks until the environment stabilizes. Target Corporation

Leadership Transition: Incoming CEO Fiddelke’s Challenge

This quarter also marks a leadership inflection point for Target:

Long‑time executive Michael Fiddelke — currently COO and incoming CEO — is set to take over the top job in February, succeeding Brian Cornell. Target Corporation
On today’s earnings call, Fiddelke outlined a multi‑year transformation focused on three priorities:
1. Merchandising authority (faster trend‑spotting, more exclusive product and better assortments).
2. Guest experience (cleaner, better‑staffed stores and improved in‑stock levels).
3. Technology and data (AI‑driven forecasting, fulfilment and personalized digital experiences). Target Corporation

Among the more eye‑catching digital moves: Target is partnering with OpenAI to offer a curated shopping experience through Apps for ChatGPT, including multi‑item baskets, fresh groceries and the ability to choose Drive Up or Order Pickup inside that experience. It’s also rolling out an AI‑powered Gift Finder for the holidays. Target Corporation

For now, as one Reuters‑quoted analyst put it, it’s “too early to see meaningful changes” from the new CEO in the reported numbers — but the strategic direction is clearly being reset. Reuters

How Do Analysts See TGT Stock After Today?

Coverage remains mixed:

Nasdaq/RTTNews highlighted that profit fell year over year but still beat Street estimates, while Target’s revenue and comp decline underscored the challenges ahead. Nasdaq
Trefis argues that Q3 looks better once you factor in the growth of high‑margin, digital and membership‑linked revenue streams, framing Target as a potential turnaround story if those trends accelerate into 2026. Trefis
TipRanks data shows a consensus “Hold” rating on TGT, with a mix of Buy, Hold and Sell calls and an average 12‑month price target in the low‑$100s, implying mid‑teens upside from current levels — but with meaningful execution risk. TipRanks

In short: Wall Street sees upside if Target can stabilize comps and prove that its heavy investments in price, service and technology translate into durable growth and healthier margins.

What Today’s Earnings Mean for Target Investors

Putting it all together, investors now have a clearer — if still challenging — picture:

Positives

Earnings power is holding up better than feared, thanks to cost control and higher‑margin revenue streams.
Digital, same‑day fulfilment, and advertising/membership businesses are all growing, potentially reshaping Target’s profit mix in a favorable way.
Management is not standing still: it’s cutting costs, revamping operations, embracing AI and committing more capital to stores and digital infrastructure.

Negatives

Comparable sales have declined for five consecutive quarters, and traffic is still falling. Reuters
The top end of earnings guidance has been cut, and management feels compelled to keep a wider‑than‑usual EPS range, signaling real uncertainty. Reuters
Heavy holiday discounting could win back price‑sensitive shoppers — but at the risk of pressuring margins if promotional intensity escalates across the sector. Reuters

For existing and prospective shareholders, the story after today’s report is straightforward:

Target is still a work‑in‑progress turnaround, not a completed comeback.

The next key checkpoints will be:

Q4 and holiday comps and traffic trends.
Evidence that digital and high‑margin revenue growth can offset ongoing weakness in discretionary categories.
How quickly the new CEO’s operational and tech initiatives show up in margins and customer metrics.

As always, anyone considering TGT should weigh these factors against their own risk tolerance, time horizon and portfolio needs, and treat this article as information, not investment advice.

Quick FAQ: Target Earnings Today (November 19, 2025)

Did Target beat Q3 2025 earnings estimates?
Yes. Adjusted EPS came in at $1.78, ahead of consensus around $1.71–$1.72, but GAAP EPS fell to $1.51 from $1.85 a year ago, and revenue slightly missed expectations at $25.27 billion. Investing

Why is TGT stock down if earnings beat?
Because investors are focused on the ‑2.7% comparable‑sales decline, softer‑than‑expected comps, ongoing traffic pressures, and a lowered full‑year profit outlook, as well as the prospect of margin‑dilutive holiday discounting. Lipper Alpha Insight

What is Target’s outlook for the holiday quarter and 2026?
Target expects Q4 sales to decline in the low single digits again and now sees full‑year adjusted EPS of $7.00–$8.00. Looking to 2026, it plans to boost capital expenditures to around $5 billion, about $1 billion more than 2025, to remodel stores, build new locations and upgrade technology and fulfilment capabilities. Investing.com