Minneapolis, May 20, 2026, 06:10 CDT
Target raised its annual sales forecast on Wednesday after stronger-than-expected first-quarter results, an early test passed for new Chief Executive Michael Fiddelke’s effort to pull the retailer out of a long sales slump. The company now expects net sales growth of about 4% this year, two percentage points above its prior range.
It matters now because the gain breaks a weak run. Target had been under pressure after three straight years of declining revenue, with shoppers shifting to lower-price rivals and the chain losing some of the style edge that once made it stand out. Reuters reported the guidance increase was Target’s first upward sales revision in two years.
Fiddelke, who took over from Brian Cornell in February, has put money behind the reset. Target in March outlined an incremental $2 billion investment for 2026, including more store payroll and training, new floor plans, better displays, technology spending and roughly $5 billion in capital investment.
Net sales rose 6.7% to $25.44 billion in the quarter ended May 2. Comparable sales — sales from stores and digital channels open at least a year — rose 5.6%, helped by a 4.4% increase in traffic. Digital comparable sales climbed 8.9%, led by growth of more than 27% in same-day delivery powered by Target Circle 360.
Profit was messier, partly because last year’s quarter included legal settlement gains. Target earned $781 million, or $1.71 a share, down from $1.04 billion, or $2.27 a share, a year earlier. Adjusted earnings were also $1.71 a share, above analysts’ expected $1.47, while sales beat the $24.7 billion expected by FactSet, the Associated Press reported.
Fiddelke said the results offered “encouraging early signs” that Target’s clarified strategy was resonating with shoppers, but he did not present the quarter as a fix. On a media call, he said Target was still keeping “a cautious outlook,” citing work left to do and an uncertain economy. Target Corporation
The gains were broad. Target said sales rose in all six of its core merchandising categories, and non-merchandise sales, including advertising, memberships and its marketplace, rose nearly 25%. Axios reported that executives pointed to demand for limited-edition partnerships, toys, beauty, wellness and baby products; Chief Merchandising Officer Cara Sylvester said guests were responding to “newness.” Axios
The strategy also has a blunt competitive purpose. Reuters reported Target cut prices on about 3,000 items in March, including toys, pantry staples, packaged foods and apparel, as it sought to narrow the gap with Walmart and Amazon on value while keeping its own pitch around style and design. Walmart reports quarterly results on Thursday.
Morningstar analyst Brett Husslein put the problem plainly: Target sits in “a middle ground of retail” — neither the cheapest nor the default destination for one category. That is the hole Fiddelke is trying to close with sharper merchandising, better-stocked shelves and a more interesting store visit. Reuters
Target shares traded at $127.24 before the market opened, up $4.04 from the previous close, after a strong run earlier this year.
But the cleaner sales print does not remove the risks. Target said gross margin improved, helped by supply-chain productivity and lower markdowns, but higher product costs weighed on the quarter. The company also said selling, general and administrative expense rose because of higher compensation costs, more hours and training for field teams, capital project spending and marketing.
The company expects full-year earnings per share near the high end of its prior $7.50 to $8.50 range. That gives Target some room, but not much. The next few quarters will show whether the first quarter was a rebound from weak comparisons or the start of steadier growth.
