Title: Target Beats Earnings Expectations, But Sales Fall and Shares Plummet

Target (TGT) reported second-quarter results that surpassed analysts' low expectations, although the retailer still faces significant headwinds, including a pressured consumer and loss of market share to rivals like Walmart (WMT).

Report Highlights:

• Net Revenue: $25.2 billion (down 0.9% year-over-year, but above the $24.53 billion estimate).

• Earnings Per Share (EPS): $2.05 (down 20.2%, but above the $2.01 estimate).

• Comparable Sales (Comp Sales): Fell 1.9%, a better result than the forecasted 3.14% decline.

• Gross Profit Margin: Contracted to 29% from 30% a year earlier, but also above expectations.

• Digital Sales: Were a positive point, with comparable digital sales growing 4.3%.

Persistent Challenges:

Despite the earnings "beat," driven by cost-cutting, the numbers reveal a struggling company. The total number of transactions and the average amount spent per purchase fell, indicating lower traffic and more cautious consumers.

Leadership Change:

The earnings announcement coincides with a moment of transition. Target confirmed that Michael Fiddelke, current COO and a veteran who started as an intern in 2003, will take over as CEO on February 1, 2026. Brian Cornell, in the role since 2014, will move to the executive chairman position.

Market Reaction:

The market reacted poorly to the overall data. Target's stock (TGT), which was already down 23% year-to-date prior to the report, plunged more than 6% in the day's trading, reflecting concern about the company's long-term health.

Outlook:

The company maintained its annual earnings per share projection of $7 to $9, which had been drastically reduced the previous quarter. The company still expects a low-single-digit percentage decline in comparable sales for the year.