Target Corporation (NYSE: TGT) released third-quarter fiscal 2025 results today, revealing resilient profitability even as consumers remain price-sensitive in tough retail conditions.
Net sales reached $25.3 billion down, 1.5% year-over-year. Comparable sales fell 2.7%, driven mainly by 3.8% decline in store-originated transactions. Digital channels provided some relief, growing 2.4% thanks to strong same-day services like Drive Up and Shipt.
Target delivered adjusted earnings per share of $1.78, edging past analyst consensus of $1.76. GAAP EPS came in at $1.51 after one-time charges. Operating income dropped 18.9% to roughly $0.9 billion, pushing operating margin to 3.8% from 4.6% last year.
Higher markdowns weighed on margins, but stable gross margin at 28.2% stemmed from lower shrink, supply-chain improvements, and rising ad revenue.
Senior analyst John from Smart Stockwatch commented on results: “Target shows impressive cost discipline. Digital growth partially offsets in-store weakness, while efficiencies keep profits ahead of forecasts despite soft demand.”
Looking to holidays Target maintains guidance for low-single-digit sales decline in Q4. Incoming CEO Michael Fiddelke stresses merchandising refresh and experience upgrades for long-term gains.
Company rolls out over 20,000 new products – more than half exclusive – plus affordable Thanksgiving meals under $20 and expanded next-day delivery covering half U.S. households.
On capital returns, Target paid $518 million dividends and repurchased $152 million shares. Return on invested capital slipped to 13.4% from 15.9%, reflecting higher debt, yet balance sheet stays solid.
