1Q26 Earnings Review

Research evidence excerpt

1Q26 Earnings Review

y Roundel advertising, Target

Circle 360 membership, and marketplace expansion. The company gained or held FY27E EPS 8.40 8.95

share across most merchandise divisions and across income cohorts, reinforcing Revenue (M)

improved competitive positioning exiting the quarter. FY Jan 2025A 2026E 2027E

■ Management focused heavily on early traction from its refreshed strategy, centered Q1 23,846.0025,443.00A -

on merchandising authority, value, and guest experience improvements. Initiatives Q2 25,211.00 25,987.00 -

across baby, wellness, and food drove meaningful engagement, including over Q3 25,270.00 26,200.00 -

3,000 new food items and ~1,500 new wellness items, contributing to double- Q4 30,453.00 31,588.00 -

digit growth in select categories. Partnerships and limited-time drops also played FY REV 104,780.00 109,218.00112,381.00

a key role in driving traffic and engagement, with collaborations generating

FY EV/S 0.5x 0.5x 0.5x strong demand and store traffic. Operationally, the company is investing in store

labor, remodels, and supply chain capacity, alongside improvements in inventory FY P/S 0.5x 0.5x 0.5x

availability and fulfillment speed. While encouraged by early momentum, we EPS (Adjusted)

maintain a cautious outlook given the highly competitive landscape TGT operates FY Jan 2025A 2026E 2027E

in, tougher compares ahead, and a still uncertain consumer backdrop. Q1 1.30 1.71A -

■ Updating estimates... We are raising our FY26 EPS estimate to $8.40 from $8.05. Q2 2.05 2.33 -

Our assumptions include top-line growth of +4.2%, roughly 60bps of gross margin Q3 1.78 1.81 -

expansion, and an operating margin of +4.8%. For FY27, we expect TGT to generate Q4 244.00 2.55 -

modest operating margin expansion, driven by further LSD top-line growth and