A discount retailer selling groceries, clothing, home goods, and everyday essentials across the U.S., with its own brands like Good & Gather and Cat & Jack. Target began in 1962 when the Dayton Company, a Minneapolis department-store family, opened its first discount store — the name and red bullseye logo came from the idea of being a 'target' for shoppers. Its stores also serve as fulfillment hubs, and it runs an advertising business called Roundel.
Q1 FY2026 net sales rose 6.7% to $25.4B with 5.6% comparable sales growth after a year of declines
grew for the first time in five quarters. rose 6.7% to $25.4B and improved to 29.0% as markdowns fell, though dropped 22.9% to $1,135M because a $593M settlement gain inflated the prior-year quarter. The underlying business returned to growth, but no share repurchases resumed.
Key takeaways
rose 6.7% to $25.4B on a 5.6% gain (4.4% traffic, 1.1% average transaction) and 24.6% non-merchandise sales growth led by , ending four straight quarters of comparable sales declines that ran through Q4 FY2025.
fell 22.9% to $1,135M, but this reflects a $593M prior-year interchange fee settlement gain; excluding it, rose 29.1% from $0.9B.
improved 0.8 points to 29.0% from 28.2% a year earlier, driven by lower markdowns, higher advertising and other revenues, and supply chain productivity, partly offset by higher product costs.
Section summaries
Management's Discussion and Analysis
Q1 FY2026 net sales rose 6.7% to $25.4B on 5.6% comparable sales growth; adjusted operating income up 29.1% excluding prior-year interchange settlement gains.
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increased 6.7% to $25.4 billion, driven by a 5.6% increase (4.4% traffic, 1.1% average transaction) and 24.6% non-merchandise sales growth, primarily from .
rose to $716M from $275M a year earlier, aided by higher and lower , which fell to $12.3B on stronger sales and receipt timing.
The company repaid $1.0B of unsecured debt in April 2026, declared a of $1.14 per share (up 1.8%), and did not shares.
What changed
Q1 FY2026 trajectory: flagged after Q4 FY2025's -2.6% full-year decline and Q1 FY2025's -3.8%; it rose 5.6%, the first positive quarter since Q2 FY2024.
Store-originated comps: flagged to recover from Q1 FY2025's -5.7% and the FY2025 -2.6%; traffic rose 4.4% overall, reversing prior store weakness though exact store split not stated this quarter.
Share repurchases: flagged after none disclosed through FY2025 quarters and $509M across nine months of FY2024; none occurred in Q1 FY2026.
Q1 : flagged to see if FY2025's 27.9% held; it rose to 29.0%, above both the 27.9% year and 28.2% prior-year quarter.
ESG/DEI class actions: FY2025 10-K noted no loss estimate; Q1 filing states no material developments and no response required under Item 103, so no estimate emerged.
: flagged after Q1 FY2025 rose to $13.0B; it fell to $12.3B on stronger sales.
What to watch
Q2 FY2026 to confirm the 5.6% Q1 gain holds, particularly store-originated performance.
Scale of share repurchases in FY2026 after none in Q1 and lower buybacks in FY2025.
Q2 rate to see if 29.0% holds as product costs rise.
Any loss estimate or ruling in the consolidated Minnesota ESG/DEI class actions.
fell 22.9% to $1.1 billion due to $593 million in prior-year interchange fee settlement gains; excluding those gains, rose 29.1% from $0.9 billion.
improved to 29.0% from 28.2%, reflecting lower markdowns, higher advertising/other revenues, and supply chain productivity, partially offset by higher product costs.
Adjusted increased 0.2 percentage points to 21.9%, driven by higher compensation, new store/remodel costs, and other expenses, partly offset by sales .
was $0.7 billion, up from $0.3 billion, helped by higher and lower ; inventory fell to $12.3 billion on stronger sales and receipt timing.
The company repaid $1.0 billion of unsecured debt in April 2026 and did not shares; it declared a quarterly of $1.14 per share, up 1.8%.
Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in our primary risk exposures or management of market risks from those disclosed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk of our Form 10-K for the fiscal year ended January 31, 2026.
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There have been no material changes in our primary risk exposures or management of market risks from those disclosed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk of our Form 10-K for the fiscal year ended January 31, 2026.
For the quarterly period ended May 2, 2026, no response is required under Item 103 of Regulation S-K, nor have there been any material developments for any previously reported legal proceedings.
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For the quarterly period ended May 2, 2026, no response is required under Item 103 of Regulation S-K, nor have there been any material developments for any previously reported legal proceedings.
There have been no material changes to the risk factors described in Part I, Item 1A, Risk Factors of our Form 10-K for the fiscal year ended January 31, 2026.
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There have been no material changes to the risk factors described in Part I, Item 1A, Risk Factors of our Form 10-K for the fiscal year ended January 31, 2026.