MINNEAPOLIS, Nov. 19, 2025 – Target Corporation (NYSE: TGT) released its financial results for the third quarter of 2025, revealing a decline in net sales compared to the previous year, while also highlighting growth in digital sales and non-merchandise categories. The company remains focused on navigating ongoing challenges as it prepares for the crucial holiday shopping season.

1. Key Financial Highlights

Net Sales: Target reported third quarter net sales of $25.3 billion, a 1.5% decrease from the same period in 2024.

Earnings Per Share (EPS): The GAAP EPS for the quarter was $1.51, down from $1.85 in the previous year. Adjusted EPS, which excludes non-recurring costs, stood at $1.78.

Comparable Sales: The company experienced a 2.7% decline in comparable sales, driven by a 3.8% drop in store sales, although online sales saw a 2.4% increase.

2. Growth in Digital and Non-Merchandise Sales

Despite the overall decline in net sales, Target's digital sales demonstrated resilience. The company reported a 2.4% growth in digital comparable sales, significantly boosted by a 35% increase in same-day delivery services through its Target Circle 360 platform. Additionally, non-merchandise sales surged by nearly 18%, driven by strong performance in advertising and membership revenues.

Michael Fiddelke, the incoming Chief Executive Officer, expressed optimism regarding the company's positioning for the holiday season. "Thanks to the incredible work and dedication of the Target team, our third quarter performance was in line with our expectations," he stated.

3. Strategic Initiatives for the Holiday Season

To enhance customer experience and drive sales during the holiday season, Target announced several strategic initiatives, including:

Launching over 20,000 new items, which is twice the number offered last year, with more than half being exclusive to Target.

Offering Thanksgiving meals for four at under $20, featuring turkey priced at 79 cents per pound.

Implementing lower prices on thousands of essential items, aimed at helping consumers save on everyday products.

Providing a range of gifts and toys, with thousands available starting at $5 and under $20, respectively.

Expanding fulfillment options, including next-day shipping accessible to over half of the U.S. population.

4. Operating Results and Financial Metrics

Target's operating income for the third quarter was $0.9 billion, representing an 18.9% decline from the previous year. The operating margin rate declined to 3.8%, compared to 4.6% in 2024. Gross margin remained relatively stable at 28.2%, slightly down from 28.3% last year, despite challenges posed by markdowns and competitive pricing pressures.

The company's selling, general and administrative (SG&A) expenses increased to 21.9% of net sales, up from 21.3% in 2024, reflecting ongoing investments in technology and operational improvements.

5. Forward Guidance

Looking ahead, Target is maintaining its expectation of a low-single digit decline in sales for the fourth quarter. Full-year GAAP EPS is projected to be in the range of $7.70 to $8.70, while adjusted EPS is expected to fall between $7.00 and $8.00.

6. Capital Deployment and Shareholder Returns

Target continued to return value to shareholders, declaring $518 million in dividends in the third quarter, reflecting a 1.8% increase in the dividend per share. The company also repurchased $152 million worth of its shares, retiring 1.7 million shares at an average price of $91.59. As of the end of the quarter, Target had approximately $8.3 billion remaining under its share repurchase program.

7. Conclusion

While Target Corporation faces challenges reflected in its third quarter financial results, the company's strategic focus on digital growth and customer experience enhancements positions it well for the upcoming holiday season. With aggressive pricing strategies and an expanded product range, Target aims to attract consumers in a competitive retail landscape. Investors and analysts will be closely monitoring the company's performance in the coming quarters as it navigates through ongoing economic pressures.

Original press release