Target Doubles Profit in Q2 and Raises Full-Year Outlook on Tariff Refunds and Turnaround Gains

Target reported fiscal second-quarter adjusted EPS of $4.11, roughly double the $2.30-$2.35 analyst consensus, as net income surged 100.8% year-over-year to $1.88 billion. Revenue rose 5.3% to $26.54 billion, topping estimates of around $25.5-$26.13 billion depending on the source. Comparable sales grew 3.8%, fueled by stronger store traffic and gains across all merchandise categories, with beauty and food leading the way.

Operating income climbed 94.4% to $2.56 billion, and gross margin expanded 470 basis points to 33.7%. A nearly $1 billion boost from tariff refunds was cited as a significant contributor to the profit surge. On the strength of the quarter, Target raised its full-year fiscal 2026 EPS guidance to $9.90-$10.90, up from a prior range of $7.50-$8.50, and now expects net sales growth of approximately 5%.

The stock jumped roughly 5% to a 52-week high in Wednesday trading. Executives attributed the results to merchandising refreshes, store investments, improved inventory availability, and a grocery overhaul that has added snacks and changed product presentation to draw more food shoppers. Oppenheimer senior analyst Rupesh Parikh weighed in positively on the results, and Jim Cramer said he is bullish on TGT but recommends waiting for a pullback before buying.

Demand data from LikeFolio showed Target's consumer demand trend outpacing Walmart's on a year-over-year basis heading into Walmart's own upcoming earnings report.