Target reported its second consecutive quarter of comparable sales growth, crediting a sweeping merchandising overhaul and a $994 million tariff refund for a rebound that lifted profit and prompted the retailer to raise its full-year outlook.
Comparable sales — measuring stores and digital channels operating for at least 12 months — rose 3.8% in the second quarter, extending a 5.6% jump in the prior period. The gains reverse more than a year of weak or declining results, including a 1.9% drop in the same quarter a year earlier.
Chief Executive Michael Fiddelke, a 20-year company veteran who took the top job in February, called the quarter “an important step forward in the plan we laid out earlier this year to open a new chapter of growth for Target.”
“We’re encouraged by the progress made so far, and we’re also clear-eyed about the important work still ahead,” Fiddelke said.
The company said more customers visited its stores and shopped online between May and July, a reversal of the traffic declines that had dogged the chain. Target had previously cut its full-year sales forecast amid consumer softness and tariff pressures.
Much of the momentum stems from a refreshed product mix. More than half of Target’s back-to-school merchandise was new this year, including a limited-run collection of teen and tween apparel, school supplies and accessories in pastel colors and floral prints from lifestyle brand LoveShack Fancy. The retailer also partnered with Hollister on a dorm decor line.
A grocery revamp has become central to the strategy. Target has expanded its snack selection and reworked how food is presented in aisles, aiming to establish itself as a destination for everyday food purchases rather than an occasional stop.
The turnaround follows a $6 billion plan Fiddelke unveiled in March to reverse the company’s slump and restore its reputation as a source of affordable yet stylish apparel and home goods.
Second-quarter earnings roughly doubled, aided by the near-$1 billion tariff refund, and the company upgraded its annual profit and sales guidance on the strength of first-half performance.
Despite the improved results, Target shares fell after the report, reflecting investor caution over whether the momentum can hold without one-time boosts such as the refund.
The company faces a challenging retail landscape as it competes with larger rivals for value-conscious shoppers. Fiddelke signaled that sustaining the recovery will require continued execution across merchandising, in-store experience and digital channels in the coming quarters.