Target sales rebound as shoppers snap up fresh merchandise

Target delivered a 3.8% rise in comparable sales for the second quarter of 2026, marking its second straight quarter of growth under CEO Michael Fiddelke. The uptick was driven by a $994 million tariff refund from the U.S. Supreme Court ruling that the Trump administration had overstepped its authority in imposing tariffs, alongside aggressive price cuts on more than 10,000 items over the past year. Comparable sales, which include both physical stores and digital channels operating for at least 12 months, climbed 3.8% in Q2, following a 5.6% jump in Q1 and a 3.8% decline in 2025. Digital same-day delivery sales surged 8.7%, while comparable store sales rose 2.7%. Net income hit $1.87 billion, or $4.11 per share, beating Wall Street’s $2.34 per-share estimate and last year’s $935 million ($2.05 per share). The earnings included $1.65 per share from tariff refunds. Total net sales grew 5.3% to $26.54 billion. Target raised its full-year outlook, now expecting sales to rise 5% (up from a prior 4% forecast) and earnings per share to land between $9.90 and $10.90, compared with analysts’ $8.52 estimate. The retailer also upgraded its annual profit guidance, citing strong first-half performance after over a year of weak comparable sales. CEO Fiddelke attributed the rebound to a merchandising overhaul, including new product partnerships, store remodels, and expanded merchandise offerings. More than half of back-to-school merchandise is new, featuring collaborations like a limited-time teen and tween collection with LoveShack Fancy and a dorm decor line with Hollister. Target also appointed fashion designer Isaac Mizrahi as creative director at large to mentor designers and drive innovation. The company is remodeling over 100 stores this year, with plans to reach 130, and continues to invest in price reductions despite broader economic headwinds. All six of Target’s main merchandising categories saw sales growth, led by double-digit increases in the Fun 101 division, which includes electronics, toys, trading cards, sports gear, books, and gaming items.