Target Reports Mixed Q3 Results as Digital Sales Rise, Holiday Strategy Expands

Target Corporation has once again unveiled its quarterly financial performance for the year 2025, showing overall sales coming off but still digital and non-merchandise revenue streams growing. The retailer's sales amounted to $25.3 billion, which is a decline of 1.5% from the same time in 2024, although there was an increase of 2.4% in e-commerce comparable sales mainly due to over 35% of same-day delivery through Target Circle 360.

Food & Beverage and Hardlines categories showed positive growth as compared to sales last year, but they did not benefit from increased spending by consumers. Non-merchandise sales, on the other hand, took off and reached almost 18% growth, mainly because of advertising under the Roundel category, increased membership fees, and revenue from the marketplace all achieving double-digit growth.

Target's reported GAAP EPS was $1.51, which is lower than the $1.85 last year, while adjusted EPS was $1.78, excluding severance and asset-related charges.

Holiday Push: More Products, Lower Prices, Faster Delivery

Target is broadening its newness and value offerings this season to grab the holiday demand, which consists of the following:

• over 20,000 new products, which is twice the number of last year’s, half of which will be exclusively available at Target
• less than $20 for Thanksgiving dinner and 79 cents per pound for turkey
• lowering prices on thousands of grocery and household essentials
• gifts from $5 and toys under $20
• next-day shipping now wider available for more than half of the U. S. households
• CEO-elect Michael Fiddelke said the quarter was in line with expectations despite the economic hardships and reiterated the company’s focus on products, customer experience, and tech-driven efficiency.

Fourth-Quarter and Full-Year Outlook

The retailer stuck to its holiday-quarter forecast and predicted a low single-digit drop in sales.

• Now for FY2025, the company anticipates:
• GAAP EPS: $7.70–$8.70
• Adjusted EPS: $7.00–$8.00

Operational Highlights

• Comparable sales were down 2.7%, with a decline of 2.2% in store traffic
• Operating profit decreased by 18.9% to $0.9 billion
• The gross margin stood at 28.2%, which was affected by increased markdowns
• 1.7 million shares were bought back and $518 million was the dividend payout
• The after-tax ROIC was down to 13.4% from last year’s 15.9%
• Target is still running almost 2,000 stores in the U. S., backed by its growing digital fulfillment network.