Target Posts Q2 EPS $4.11 on $26.5B Sales and Lifts FY Guidance to $9.90-$10.90, Helped by a $994M Tariff Refund

TGT reported second-quarter fiscal 2026 earnings of $4.11 per share on net sales of $26.5 billion, up 5.3% year over year and ahead of a consensus that sat near $2.31-$2.35 per share on roughly $26.1 billion of revenue . Comparable sales rose 3.8%, with digital comps up 8.7% and store comps up 2.7%, and operating income nearly doubled to $2.56 billion.

Most of the earnings upside was not operating. Results included $994 million of pretax tariff refund benefits recorded within gross margin, which contributed $752 million to net earnings and $1.65 to both GAAP and adjusted EPS. Backing that out leaves roughly $2.46 of underlying EPS, still a beat but a far less dramatic one, and it is the number to anchor on when judging the run rate.

Target raised full-year guidance to net sales growth of about 5% and an operating margin near 6%, including roughly 90 basis points from the tariff refunds, and now expects GAAP and adjusted EPS of $9.90 to $10.90 against a prior consensus closer to $7.72 . Chief Executive Michael Fiddelke, who took the role earlier this year, said the quarter builds on first-quarter momentum and gives the company increasing confidence its strategy is resonating with guests.

The setup for the rest of the year is a turnaround story with an accounting tailwind layered on top. The comp reacceleration and the digital growth rate are the durable parts; the tariff refund is a one-time benefit that will not repeat at this scale. Watch whether traffic and comps hold in the back half, how much of the margin guide survives once refunds anniversary, and whether Fiddelke's merchandising reset continues to close the gap with competitors.

Related Stocks

• TGT