Target Corporation shares rose after it forecast its first sales growth in four years, despite reporting a fall in profit for the fourth quarter (Q4) of 2025.
The American big-box retailer said net earnings dropped 5.2% to US$1.046 billion (A$1.484 billion) and diluted earnings per share (EPS) eased 4.5% to $2.30 on net sales which dipped 1.5% to $30.453 billion in the three months ended 31 January 2026.
For the full year, net earnings fell 9.4% to $3.705 billion, and diluted EPS decreased 8.2% to $8.13 on net sales, which were 1.7% down at $104.78 billion.
But Target said it expected net sales growth of around 2% in 2026, the first rise after three years of falls, due to a small increase in comparable sales with new store and non-merchandise sales contributing more than one percentage point of growth.
It also forecast adjusted EPS of $7.50 to $8.50 in 2026, with Q1 adjusted EPS to be flat to up slightly from last year's $1.30 and stronger year-over-year EPS growth expected through the balance of the year.
Although Q4 revenue was below the $30.48 billion forecast by analysts polled by LSEG, adjusted EPS of $2.44 beat expectations of $2.16.
Target shares (NYSE: TGT) rose $7.63 (6.74%) to close at $120.80 on Tuesday (Wednesday AEDT), capitalising the company at $54.41 billion, after touching a 12-month high of $122.43.
"Target saw a healthy, positive sales increase in February, serving as an important milestone on our path back to growth this year, and reinforcing my confidence in the momentum we're building and the future we're creating together," Chief Executive Officer Michael Fiddelke said in a press release.
The company’s stock price had fallen almost 28% in 2025 due to weakness in spending on non-essential items such as apparel and home furnishings.
