Target Q3 sales dip as retailer details 2026 investment plan

Core Insights - Target reported a 1.5% decline in net sales to $25.27 billion for the third quarter ended November 1, 2025, marking three consecutive quarters of declining comparable sales [1][2] - The company plans to invest an additional $1 billion in 2026 as part of a $5 billion capital plan aimed at expanding and remodeling stores and enhancing digital fulfillment capabilities [2] - Target's operating income fell 18.9% to $948 million, with net earnings decreasing by 19.3% to $854 million [3][4] Sales Performance - Comparable sales dropped 2.7%, while digital comparable sales increased by 2.4%, driven by strong same-day delivery growth through Target Circle 360 [2] - Merchandise sales declined by 1.9%, whereas non-merchandise sales saw a significant increase of 17.7% [2] Operational Metrics - Gross margin was reported at 28.2%, slightly below the 28.3% recorded in 2024 [3] - On-shelf availability for key items improved by over 150 basis points year-on-year, supported by a market fulfillment model now operating in 35 additional markets [3] - Next-day delivery is now accessible to more than half of the US population [3] Future Outlook - Target reaffirmed expectations for a low-single digit sales decline in the fourth quarter and adjusted its annual earnings forecast, now expecting EPS of $7.7 to $8.7 for the full year, with adjusted EPS between $7 and $8 [4] - The new CEO, Michael Fiddelke, emphasized the team's readiness for the holiday season and the focus on solidifying merchandising authority, enhancing the shopping experience, and leveraging technology for sustainable growth [5]