Target shares jump 6% as retailer raises full-year outlook on strong sales

Target shares climbed more than 6% on Wednesday after the US retailer raised its full-year outlook and reported quarterly results that exceeded Wall Street expectations, signalling that the company may finally be emerging from a prolonged sales downturn.

The retailer now expects net sales to rise about 5% in the current fiscal year, which ends in early 2027. The new forecast is one percentage point above its previous guidance. Target also increased its adjusted earnings outlook after second-quarter sales came in ahead of analysts' expectations.

“We’re encouraged by the progress made so far and we’re also clear-eyed about the important work still ahead,” Chief Executive Officer Michael Fiddelke said on a call with reporters. Target has emerged as one of the strongest-performing retail stocks this year. Its shares had gained 56% in 2026 through Tuesday's close, more than four times the advance recorded by the S&P 500 over the same period.

At 1:03 p.m. EDT on Wednesday, Target shares were up 6.08%, or $9.27, at $161.75.

The company is seeking to establish sustained growth after three consecutive years of declining revenue. The stronger results and improved outlook could provide a boost to CEO Michael Fiddelke's strategy, which focuses on refreshing merchandise, upgrading technology and improving the overall shopping experience.

Comparable sales, which track stores and digital operations open for at least a year, increased 3.8% in the quarter ended August 1. Higher customer traffic helped drive the growth. Adjusted earnings per share also exceeded the average analyst estimate, partly helped by refunds related to tariffs.

Target, which helped popularise the “cheap chic” retail concept in previous decades, is now attempting to attract shoppers with distinctive products and trend-focused merchandise. New offerings include protein-focused potato chips and floral-patterned phone cases, part of a broader effort to restore the appeal of its product selection.

The retailer has faced several challenges in recent years. Consumers have increasingly prioritised groceries and everyday essentials over home goods and clothing, two categories that have historically been important to Target. Political controversies have also affected the company, particularly following changes to its diversity policies last year.

Meanwhile, competitors including Walmart and Costco have strengthened their positions by focusing on value and expanding their merchandise offerings.

In response, Target has undertaken a broad overhaul of its product assortment, adding more exclusive merchandise and seeking to recreate a “treasure-hunt” shopping experience. The company operates more than 2,000 stores and is also working to shorten checkout and service wait times, improve product availability and enhance interactions between employees and shoppers.

Target executives said customers are beginning to respond positively to the changes, pointing to strong performance across food, beauty, toys, electronics and sporting goods.

The Minneapolis-based retailer recently introduced its biggest overhaul of packaged-food offerings in more than a decade. Snack sales increased by double digits in the second quarter, with protein-rich and healthier products also recording strong demand.