01—Abstract
Summary
Summary of the 10-K filed March 11, 2026. Cited figures are marked; the original filing is the authoritative source.
Target Corporation's 2025 Form 10-K reports on a fiscal year marked by a dynamic and uncertain environment, primarily influenced by cautious consumer spending and significant tariff volatility.
The company continued its strategic focus on merchandising, guest experience, technology acceleration, and strengthening its team and communities. Despite a 1.7% decrease in Net Sales to $104.8 billiona, driven by a 2.6% decline in comparable sales, Target made progress on its business transformation initiatives, including organizational simplification and advancements in its Hardlines business. Key financial highlights include GAAP diluted earnings per share of $8.13 and Adjusted EPS of $7.57.
Operating income saw a decline of 8.1% to $5.1 billionb, with Adjusted operating income down 14.2%. The company also reported significant improvements in inventory shrink, returning to pre-pandemic levels, and continued innovation in its owned brands and retail media network.
The report highlights a notable $593 millionc gain from credit card interchange fee litigation settlements and $250 million in business transformation costs. Management remains focused on liquidity and capital allocation, with plans for continued investment in stores, supply chain, and technology.
02—Key points
Key Highlights
- Net Sales decreased by 1.7% to $104.8 billion for the fiscal year ended January 31, 2026.
- Comparable sales decreased by 2.6%, with traffic down 2.2% and average transaction amount down 0.4%.
- GAAP diluted earnings per share were $8.13, while Adjusted diluted earnings per share were $7.57.
- Operating income decreased by 8.1% to $5.1 billion, and Adjusted operating income decreased by 14.2% to $4.8 billion.
- The company reported $593 million in net gains from credit card interchange fee litigation settlements.
- Business transformation initiatives incurred $250 million in costs, with potential for future costs.
- Inventory shrink significantly improved, reaching pre-pandemic levels.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2026, Target Corp kept $0.04.
- Revenue$104.78B100.0%
- Cost of revenue−$75.51B72.1%
- Gross profit$29.27B27.9%
- Operating costs−$24.15B23.1%
- Operating income$5.12B4.9%
- Interest, other & tax−$1.41B1.3%
- Net income$3.71B3.5%
Where FY2026 revenue went
$104.78B- Cost of revenue: $75.51B, 72% of revenue
- SG&A: $21.54B, 21% of revenue
- Net income: $3.71B, 3.5% of revenue
- Other operating costs: $2.62B, 2.5% of revenue
- Interest, other & tax: $1.41B, 1.3% of revenue
Kept 3.5% as net incomeNet income $3.71B · 3.5%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2026filed March 11, 2026Financial Statements
FY2026 against FY2025
| Line item | FY2026FY2025 | Change |
|---|---|---|
| Revenue | $104.78B$106.57B | −1.7% |
| Cost of Revenue | $75.51B$76.50B | −1.3% |
| Gross Profit | $29.27B$30.06B | −2.6% |
| SG&A Expenses | $21.54B$21.97B | −2.0% |
| Operating Income | $5.12B$5.57B | −8.1% |
| Net Income | $3.71B$4.09B | −9.4% |
| EPS (Basic) | $8.16$8.89 | −8.2% |
| EPS (Diluted) | $8.13$8.86 | −8.2% |
| Shares Outstanding (Basic) | 454.10M460.40M | −1.4% |
| Shares Outstanding (Diluted) | 455.60M461.80M | −1.3% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Target's sales performance in fiscal year 2025?
Target's Net Sales decreased by 1.7% to $104.8 billion. This was primarily due to a 2.6% decrease in comparable sales, which was driven by a 2.2% decrease in traffic and a 0.4% decrease in the average transaction amount. Consumers remained value-focused and selective in discretionary spending amidst a dynamic and uncertain economic environment.
How did Target manage its inventory and operational efficiency during the fiscal year?
The company reported significant improvements in inventory shrink, bringing shrink rates back to pre-pandemic levels. This indicates better inventory management and loss prevention efforts. Additionally, Target leveraged its extensive store network to fulfill the vast majority of sales, with two-thirds of digital sales fulfilled through same-day options, supporting speed and cost efficiency.
What are the key financial metrics and notable non-recurring items impacting Target's profitability?
For the fiscal year ended January 31, 2026, GAAP diluted earnings per share were $8.13, while Adjusted EPS (excluding certain items) was $7.57. Operating income was $5.1 billion, down 8.1% from the prior year. Notable items include a $593 million gain from credit card interchange fee settlements and $250 million in costs related to business transformation initiatives.
What is Target's outlook and strategy for capital expenditures and growth?
Target expects capital expenditures of approximately $5 billion in fiscal year 2026. These investments will support store experience and remodels, supply chain and technology projects, and new store openings (approximately 30 new stores expected). The company's strategy remains focused on merchandising authority, guest experience elevation, technology acceleration, and strengthening its team and communities.
06—Continue