The Target Turnaround Is Real. Here's What Investors Should Know.
Catie Hogan, The Motley Fool
Sat, August 22, 2026 at 2:50 PM GMT+3 2 min read
Target (NYSE: TGT) is meeting its targets and proving skeptics wrong, showing that the veteran retailer's turnaround is for real. The Minnesota-based business reported second-quarter earnings that blew past estimates. Here's what investors need to know.
First and foremost, tariffs played a substantial role in the earnings beat as a one-time refund boosted numbers. The refund totaled nearly $1 billion. Still, without the repayment from the federal government, the company's adjusted earnings per share (EPS) would have grown 20% from the same period last year. Revenue climbed 5.3% year over year to $26.5 billion, with digital sales growing an impressive 8.7%.
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The company also raised its full-year EPS guidance to a range of $9.90 to $10.90. Target's stock has risen 65% year to date as of Aug. 19.
Secondly, Target still has a long way to go. The retailer is well below its 2021 peak and is rebuilding a damaged reputation after boycotts and public backlash over its reversal of DEI initiatives. This quarter shows the company's efforts to lure back shoppers are actually working.
This is the second consecutive quarter of strong earnings, and now we're heading into back-to-school season and the holidays. If Target can continue to grow its digital presence and sales, the stock looks like a compelling buy. I'm cautiously optimistic that a strong fall and winter season could solidify Target's comeback.
Much of Target's turnaround story could ultimately unfold outside the retailer's control, however, as inflation and tariff pressures keep consumers' wallets lean.
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.
The Target Turnaround Is Real. Here's What Investors Should Know. was originally published by The Motley Fool
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