Target released fiscal second-quarter results that exceeded expectations, with the company attributing its performance to both improved operational execution and a substantial one-time tariff refund. Net sales grew 5.3% compared with the prior year, while comparable sales increased 3.8%, surpassing analyst projections. The company noted strength across most product categories, describing the growth as broad-based.
The retailer benefited from a $752 million boost to net earnings, equivalent to $1.65 per share, derived from tariff refunds. When accounting for this one-time payment, second-quarter net income reached $1.88 billion, or $4.11 per share, compared with $935 million, or $2.05 per share, in the prior year. The tariff repayment contributed a $994 million pretax benefit to gross margin and operating income.
Based on stronger sales performance and the tariff refund, Target elevated its full fiscal-year guidance. The company raised its net sales growth projection to approximately 5%, an increase of one percentage point from the previous outlook. Full-year earnings per share guidance, including the tariff refunds, was set between $9.90 and $10.90, while the range excluding the repayment stood at $8.25 to $9.25 per share, up from a prior outlook of $7.50 to $8.50 per share.
Digital operations showed particular momentum, with comparable sales in that segment climbing 8.7% during the quarter, driven by same-day delivery growth exceeding 25%. The company introduced price reductions on more than 10,000 items as part of its strategy to attract customers, and opened 17 new stores during the period. Despite the positive results, Chief Executive Michael Fiddelke cautioned that the turnaround remains a work in progress, noting that apparel and home categories continued to underperform relative to other segments. Target shares increased 4% on the day of the earnings announcement.
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