Second Quarter Sales At Target Down
Second-quarter net sales at Target were down as the retailer reported declines in comparable store sales.
For the three months ended Aug. 2, net sales were $25.2 billion, a decrease of 0.9% from the comparable quarter of the previous year. The decline reflected a 1.2% drop in merchandise sales, offset by a 14.2% increase in non-merchandise sales.
Comparable sales decreased 1.9% in the second quarter, reflecting a comparable store sales decline of 3.2%, partially offset by comparable digital sales growth of 4.3%. Second quarter operating income of $1.3 billion was 19.4% lower than last year.
The second quarter gross margin rate was 29%, compared with 30% in 2024. This reflects the net impact of merchandising activities, including higher markdown rates, purchase order cancellation costs, and pressure from category mix. These factors were partially offset by lower inventory shrink and growth in advertising and non-merchandise sales.
Brian Cornell, chair and CEO of Target, said the second quarter results showed encouraging signs of recovery, including improved traffic and sales trends, most notably in stores, and disciplined cost management in a challenging retail environment.
"As we enter the critical back-to-school and holiday seasons, our team remains focused on consistent execution and building momentum as we look ahead to the new year," he said.
Across key product categories, Target reported gains in beauty, food and beverage, and hardlines. Decreases were seen in apparel and accessories, home furnishings and decor, and household essentials.
Cornell’s tenure as CEO is coming to an end as Target named Michael Fiddelke its new chief executive, effective Feb. 1, 2026. Currently the company’s chief operating officer, Fiddelke has spent 20 years at Target and held leadership roles across merchandising, finance, operations, and human resources. He has spearheaded enterprise efforts to deliver more than $2 billion in efficiencies and established and began leading the company's Enterprise Acceleration Office to reshape how Target operates.
