Target Climbs on Q2 Beat as Sales Turn Positive and a Tariff Refund Lifts Profit

Target shares climbed about 6% in afternoon trading Wednesday, to $161.55, after the retailer posted second-quarter results that beat Wall Street and raised its full-year outlook. Profit doubled from a year earlier. A one-time tariff refund did much of the lifting.

The company reported net sales of $26.5 billion, up 5.3% from a year ago and above the $26.14 billion analysts had modeled. Comparable sales rose 3.8%, a turn back to growth after a soft stretch, with store comps up 2.7% and digital comps up 8.7%. Both figures came in ahead of expectations. Reported earnings were $4.11 per share, against $2.05 a year ago and a consensus of $2.33.

A $994 million refund did $1.65 of the work

The size of the beat has an asterisk. Target said its results included a $994 million pretax tariff-refund benefit, which flowed through gross margin and lifted operating margin to 9.6%, of which 3.7 percentage points traced to the refund itself. On a net basis the refund added $752 million to earnings and $1.65 per share. Strip it out, and per-share profit was $2.46, still ahead of the estimate, with underlying earnings up roughly 20% from last year.

That leaves two readings sitting side by side. The turnaround the company has been chasing showed up in the comp line, where traffic and digital both grew. And the profit headline that doubled leaned heavily on a payment that does not recur.

Management leaned into the operating story. Chief Executive Michael Fiddelke said the quarter built on momentum from the first, adding that the results gave the company increasing confidence its strategy was resonating with shoppers. Target also raised guidance: full-year net sales growth of about 5%, and earnings of $9.90 to $10.90 per share, up sharply from a prior $7.50 to $8.50 range. The company noted the new range carries $1.65 of tariff benefit.

From the low $140s to a fresh push higher

Today’s jump extends a climb that was already underway. Over the past month the stock moved up from the low $140s into the $150s heading into the print. Measured from mid-April, when it traded at $117.88, Target is up about 37%. At $161.55 it sits toward the upper end of a wide 52-week range that runs from $83.44 to $167.40, a span that captures how far the name fell before this year’s recovery attempt.

Volume backed the move. By early afternoon more than 6.1 million shares had changed hands, already running above the stock’s recent daily pace, with the session still open.

Next: the close, then Walmart and Deere

The afternoon leaves a few things unresolved. The final print will show whether Target holds the day’s gain or gives some back into the close. Lowe’s reported earlier Wednesday, adding a second big-box read on the consumer. And the calendar turns quickly: Walmart and Deere are both due Thursday, giving the market a broader look at retail demand and the farm economy within a day.

The question the refund raises will follow Target into the next quarter, when the comparison no longer carries a nine-figure tariff credit. For now, the sales line moved the way the company wanted, and the profit line moved further than the underlying business did on its own.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.