Target lifts outlook after strong Q1 2026

May 20, 2026 at 13:15 UTC

2 min read

Big-box retail store with busy parking lot after strong Q1 2026 results lift outlook for TGT

Key Points

Target’s Q1 2026 net sales rose 6.7% to $25.443 billion
Comparable sales grew 5.6%, with traffic up across stores and digital
Digital comps gained 8.9% and same-day services rose more than 27%
Target raised full-year net sales outlook to about 4% growth

Target posts stronger-than-expected Q1 2026 results

Target reported fiscal first-quarter 2026 net sales of $25.443 billion, a 6.7% increase from a year earlier. The quarter ended May 2, 2026. Comparable sales, which include both stores and digital channels, rose 5.6% over the same period.

The company said GAAP diluted earnings per share were $1.71, with net earnings of $781 million for the quarter. Management characterized the performance as ahead of expectations and an encouraging start to the fiscal year.

Sales drivers: traffic, digital, and services

Target reported that comparable traffic across its stores and digital platforms grew 4.4% year over year in the first quarter. This indicates more guests shopping with the retailer both in person and online.

Digital comparable sales increased 8.9% in Q1 2026, supported by continued adoption of online and app-based shopping. Same-day delivery options grew more than 27%, highlighting rising demand for rapid fulfillment services.

Non-merchandise revenue, including membership, marketplace, and advertising, grew nearly 25% in the quarter. This reflects expanding contributions from fee-based and partner-driven offerings beyond traditional product sales.

Updated 2026 outlook and profitability expectations

On the back of the stronger-than-expected quarter, Target raised its full-year net sales growth outlook to a range around 4%. The company noted this is two percentage points higher than its prior outlook.

Target also said it now expects to finish the year near the high end of its previously provided earnings guidance range of $7.50 to $8.50 in EPS. The company linked this confidence to early momentum in its strategic initiatives and first-quarter performance.

Management commentary on early turnaround progress

CEO Michael Fiddelke, speaking on the company’s May 20 earnings call, described the quarter as encouraging early progress. He said guests are responding to areas where Target is "leaning in and driving change."

Fiddelke emphasized that "we know our work is just beginning," indicating that management sees further steps ahead to deliver consistent, long-term growth. The first-quarter results are being viewed internally as an initial step in that broader effort.

Key Takeaways

Target’s Q1 2026 performance shows broad-based strength across stores, digital, and services, rather than reliance on a single sales channel.
The increased full-year sales and EPS expectations suggest management views early-quarter momentum as sustainable enough to adjust formal guidance.
Rapid growth in digital, same-day services, and non-merchandise revenue underscores the strategic importance of convenience and fee-based offerings to Target’s model.