Target Q4 2025 Earnings: What the Numbers , and New CEO's Turnaround Plan , Really Mean
Key Takeaways
If you're short on time, here's what matters most from today's report:
- Earnings beat expectations (adjusted EPS of $2.44 vs. $2.16 expected), but revenue missed for another quarter
- Comparable store sales fell 3.9% , foot traffic remains the core problem
- Digital sales grew 1.9% , a consistent bright spot
- February sales were positive year-over-year , the first green shoot in a while
- $5 billion in capital spending planned for 2026 , stores, tech, and merchandise resets
- 2026 guidance: ~2% net sales growth, $7.50–$8.50 EPS , stable but not spectacular
- New CEO Fiddelke is betting on better store experiences, smarter technology, and sharper merchandising to win customers back
Okay, so you've probably heard by now , Target dropped its Q4 2025 earnings this morning, and new CEO Michael Fiddelke used the moment to lay out his vision for pulling the big-box retailer back from the edge of a pretty rough stretch.
And look… it's complicated. The numbers themselves? A mixed bag. But the story behind those numbers? That's actually where things get interesting.
Whether you're a shareholder watching TGT nervously, a retail industry nerd, or just someone who does way too much impulse shopping in those famous red-and-white aisles , this one's worth understanding. Let's break it all down, the good, the bad, and the honestly-hard-to-read-yet.
The Q4 Numbers , What Target Actually Reported
Let's start with the facts, because there's been a lot of noise.
Target reported Q4 2025 GAAP earnings per share of $2.30 and adjusted EPS of $2.44, compared with $2.41 in the same quarter a year ago. So adjusted earnings actually beat Wall Street's consensus , analysts were expecting $2.16 per share on revenue of $30.48 billion, and Target came in at $2.44 on that EPS line. That's a meaningful beat.
But revenue? That's where the sting is.
Target's quarterly revenue dropped about 1.5% from $30.92 billion in the year-ago period, missing Wall Street's already-lowered expectations. For four consecutive quarters, customer traffic across Target's stores and website has fallen.
Here's a quick snapshot of the key metrics:
Q4 2025 Key Numbers at a Glance
- Adjusted EPS: $2.44 (beat estimate of $2.16 ✅)
- Revenue: $30.45B (missed estimate of $30.48B ❌)
- Comparable Sales: Down 2.5% year-over-year
- Store Comparable Sales: Down 3.9%
- Digital Comparable Sales: Up 1.9% ✅
- Customer Transactions: Down 2.9%
The digital bright spot matters , but it doesn't fully offset what's happening in stores, which is still Target's bread and butter.
So… Why Is Traffic Still Falling?
This is the uncomfortable part of the conversation, and it deserves a straight answer.
Some of Target's customers told CNBC they are shopping elsewhere after noticing changes like sloppier stores and lackluster merchandise, or objecting to the company's social stances, like its rollback of major diversity, equity, and inclusion initiatives. The company acknowledged that backlash to its DEI decision had hurt sales and led to market share losses to competitors.
That's not a supply chain problem. That's a trust problem.
Analysts have pointed to Target's "self-inflicted wounds," including poor inventory management, declining store conditions, and widening price gaps with competitors.
And competitors aren't standing still. Analysts project that Walmart will grow its sales by "almost another Target" between 2021 and 2025, while Target's sales remain flat or fall. That's a sobering comparison when you say it out loud.
Think of it this way: Target used to be the store where people went to "just grab one thing" and walked out with a cart full of stuff they didn't know they needed. That magic , the spontaneous joy of a "Target run" , has quietly eroded. And they need to get it back.
Enter Michael Fiddelke , The New CEO's First Big Moment
Fiddelke took over from longtime leader Brian Cornell on February 1, making the March 3 investor meeting in Minneapolis his first major test.
To be fair to Fiddelke, he's not walking into an easy situation. He's inheriting years of accumulated challenges , and he knows it. Brian Cornell opened Target's earnings call last week by listing his accomplishments as CEO and taking responsibility for the company's current woes. Then, in a pass-the-baton moment, he turned the mic over to Fiddelke.
That moment alone , a CEO publicly owning the mess before handing off to his successor , felt unusually candid for a Fortune 500 earnings call. And it set the tone for what came next.
What Fiddelke Said (In Plain English)
In the earnings release, Fiddelke outlined four core pillars of his turnaround plan:
- Strengthening merchandising authority (making Target cool and curated again)
- Delivering an elevated shopping experience (fixing the in-store experience that's been frustrating customers)
- Advancing technology (AI, personalization, better inventory tools)
- Investing in team and communities (better-staffed stores, improved working conditions)
Not buzzwords , these are actually the right problems to solve. The question is execution.
The $5 Billion Bet , What Target Is Spending Money On
Here's where Fiddelke is putting his money where his mouth is. Literally.
Capital spending will rise to roughly $5 billion in fiscal 2026, up from $4 billion this year, with dollars directed toward technology upgrades, category resets, new larger-format stores, and an expanded remodel program.
That's an extra billion dollars. In one year. Let's look at where it's going:
Store Remodels , The Floor Pad Revolution
Target plans its most significant floor pad transformation in 10 years, with resets in Home, Baby, Beauty, and Fun 101. These changes are intended to elevate discretionary storytelling and reassert design-led merchandising , areas that have historically distinguished the brand.
If you've been in a Target lately and thought "this doesn't feel as fun as it used to," this is Target's acknowledgment that you're right.
Technology and AI , Not Just Buzzwords This Time
Target is deploying machine learning and AI-enabled tools to improve forecasting, in-stocks, and personalization, as well as to compress time from trend identification to shelf. Early progress was visible in Q3, as availability of the company's top-selling SKUs improved by more than 150 basis points year over year.
One notable partnership: Target deepened its collaboration with OpenAI, integrating the Target app inside ChatGPT to help customers with recommendations, cart building, and checkout. Whether shoppers actually use it remains to be seen , but it signals a real pivot toward tech-forward retail.
Store Labor Investment
Last month, Target announced it would invest more in store labor and cut about 500 other roles at distribution centers and regional offices to try to address shoppers' concerns about out-of-stocks, long checkout lines and other store conditions.
In other words: fewer back-office roles, more people on the floor helping you find your stuff. That's a trade-off that could genuinely move the needle on customer satisfaction.
The One Silver Lining That Actually Matters
Among all the quarterly data, there's one data point that Fiddelke understandably leaned on hard , and it deserves attention.
Sales and traffic trends picked up in the last two months of the holiday quarter, and then sales turned positive year-over-year in February, which is the beginning of the current quarter.
February positive. That's the first year-over-year sales increase in a while, and Fiddelke called it "an important milestone on our path back to growth this year."
Is one month of positive sales a turnaround? No. But it's a pulse. And after four consecutive quarters of declining traffic, a pulse matters.
What Wall Street Thinks , And Why Analysts Are Split
This is where it gets interesting, because the analyst community is genuinely divided.
The bulls are cautiously optimistic. UBS analyst Michael Lasser reiterated a Buy rating on Target stock with a price target of $130, believing Target will put forth a credible plan that should enable the market to believe the retailer is on the road to improvement in 2026.
The bears aren't convinced. Bank of America analyst Chris Nardone resumed coverage with a Sell rating and a price target of $103, contending that the Street's estimates for consistent positive comparable sales growth seem aggressive and that Target's EPS recovery will take time.
The gap between $103 and $130 price targets on the same stock tells you everything about the uncertainty here. Nobody really knows yet.
What most seem to agree on: whether Tuesday's results mark an inflection point or signal continued struggles will depend largely on management's ability to convince investors that fiscal 2026 represents a genuine turning point.
Target's 2026 Guidance , The Official Expectations
For those who want the hard numbers going forward, here's what Target itself is projecting:
For full-year 2026, Target expects net sales growth of around 2% compared with 2025, with GAAP and Adjusted EPS in the range of $7.50 to $8.50.
For context: full-year 2025 Adjusted EPS came in at $7.57, down from $8.86 in the prior year. So 2026 guidance at the midpoint essentially keeps Target flat to slightly up versus 2025 , not a soaring recovery, but a stabilization.
The company also flagged that it expects Q1 EPS to be relatively flat before stronger year-over-year comparisons kick in later in the year. In other words: don't expect a dramatic first-quarter pop.
Can Target Actually Pull This Off?
Let's be real for a second.
Target is fighting on multiple fronts simultaneously , pricing pressure from Walmart and Costco, ongoing consumer caution on discretionary spending, reputational damage from the DEI backlash, and the structural challenge of making e-commerce profitable without Walmart's scale.
Analysts note that without Walmart's scale advantages in automated fulfillment, Target faces structural challenges in improving digital economics.
That's a real problem with no quick fix.
But here's the thing that's easy to forget in all the quarterly noise: Target still has nearly 2,000 stores, a deeply loyal customer base that wants to love the brand again, and a new leadership team that , at least on paper , seems to understand where things went wrong. The company has maintained its dividend streak of more than 50 years and trades at a forward price-to-earnings ratio below the broader consumer retail sector average, which means value investors at least see something worth holding.
Whether Fiddelke's plan is bold enough is the right question. Some analysts wanted more than broad strokes from this investor day. Others think the groundwork being laid is exactly what was needed. Time , measured in quarters, not days , will tell the story.
Target's story right now is a classic retail drama: a beloved brand that lost its way, a new leader trying to find it again, and a market that's watching closely , and skeptically.
The Q4 results are neither a disaster nor a triumph. They're a company in transition, buying itself time and goodwill with a credible (if cautious) plan and one really important data point: February's positive sales trend.
The next few quarters will be the real test. Will the store remodels actually drive people back through the doors? Will the AI and tech investments translate to better shelves and faster checkout? Will shoppers forgive and forget?