Target (TGT) Q1 2025 Earnings
GAAP EPS of $2.27 includes $593 million in pre-tax gains ($441 million net of tax, or $0.97 per share) from the settlement of credit card interchange fee litigation. Adjusted EPS of $1.30 excludes these gains.
How Did TGT Stock React to Q1 2025 Earnings?
S&P 500 over the same 30 days: +4.10%.
Did TGT Beat Earnings? Q1 2025 Results
No. Target reported Q1 2025 earnings of $1.30 a share on May 21, 2025, missing the $1.65 consensus estimate by 21.3%. Revenue was $23.8B against a $24.3B estimate.
Target delivered a decidedly weak first quarter of fiscal 2025, missing Wall Street expectations on both the top and bottom lines as a broad sales slowdown weighed heavily on results. Adjusted EPS came in at $1.30, falling short of the $1.65 consensus estimate by 21.27%, while revenue slid 2.8% year-over-year to $23.85 billion, trailing forecasts of $24.35 billion by 2.06%. The primary culprit was a 3.8% decline in comparable sales, driven by a 2.4% drop in traffic and a 1.4% decline in average transaction size, reflecting a cautious consumer environment that has pressured retailers broadly. Gross margin also compressed to 28.2% from 28.8% a year ago, as higher markdowns and rising digital fulfillment costs added further strain. Looking ahead, Target offered little near-term relief, guiding for a low-single-digit full-year sales decline and adjusted EPS of $7.00 to $9.00, a range that signals management is bracing for continued headwinds as tariff-related uncertainty complicates the broader retail landscape.
- Digital comparable sales grew 4.7%, led by 36% increase in same-day delivery through Target Circle 360
- Key seasonal moments (Valentine's Day, Easter) outperformed non-holiday periods
- kate spade designer collaboration was the strongest in over a decade
- Lower inventory shrink partially offset gross margin pressures
- $593 million pre-tax gains from credit card interchange fee litigation settlements boosted operating income
- Comparable store sales declined 5.7%, traffic declined 2.4%, and average transaction amount declined 1.4%
“In the first quarter, our team navigated a highly challenging environment and focused on delivering the outstanding assortment, experience and value guests expect from Target. While our sales fell short of our expectations, we saw several bright spots in the quarter, including healthy digital growth, led by a 36 percent increase in same-day delivery through Target Circle 360, and our strongest designer collaboration in more than a decade, kate spade for Target.”
Target CEO, on the earnings call
What Was Target's Outlook in Q1 2025?
For fiscal 2025, Target now expects a low-single digit decline in sales, with GAAP EPS of approximately $8.00 to $10.00. Adjusted EPS, excluding the $0.97 per share gains from interchange fee litigation settlements in Q1, is expected to be approximately $7.00 to $9.00. The company established a multi-year acceleration office led by Michael Fiddelke, along with several leadership changes, aimed at enabling faster decisions and execution of core strategic initiatives to return the business to growth.
TGT YoY Financials
| Metric | Q1 2025 | Q1 2024 | Year over year |
|---|---|---|---|
| Revenue | $23.8B | $24.5B | −2.8% |
| Gross Profit | $6.7B | $7.1B | −5.1% |
| Operating Income | $1.5B | $1.3B | +13.6% |
| Net Income | $1.0B | $942.0M | +10.0% |
TGT Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.