Target Corporation ( TGT ) shares are trading lower in the premarket session on Wednesday.

The company reported second-quarter adjusted earnings per share of $2.05, beating the analyst consensus estimate of $2.03.

Quarterly sales of $25.21 billion (down 0.9% year over year) outpaced the Street view of $24.93 billion.

Also Read: Target Trails Walmart As Digital Woes, Tariffs Take A Toll

Target ( TGT ) announced that its Board has unanimously elected COO Michael Fiddelke as CEO and director, succeeding Brian Cornell, who will transition to executive chair effective Feb. 1, 2026.

Fiddelke recently launched and began leading Target’s Enterprise Acceleration Office, aimed at simplifying operations, advancing technology, and boosting agility to drive performance and long-term growth.

Q2 In Detail

Target ( TGT ) said that the quarterly performance indicated a merchandise sales decrease of 1.2%, which was partially offset by a 14.2% increase in non-merchandise sales. 

The second-quarter gross margin rate slipped to 29% from 30% in the year-ago period. The decline was driven by higher markdowns, order cancellation costs, and category mix pressure.

Comparable sales decreased 1.9% in the second quarter, reflecting a comparable store sales decline of 3.2%, partially offset by comparable digital sales growth of 4.3%. 

Operating income in the quarter under review was $1.3 billion, 19.4% lower than last year. The second quarter’s operating income margin rate contracted to 5.2%, compared with 6.4% in the year-ago period.

Quarterly EBITDA slumped 12.2% year over year to $2.104 billion.

Target ( TGT ) did not repurchase any shares in the second quarter but ended the period with about $8.4 billion remaining under its board-approved repurchase program from August 2021.

Target ( TGT ) exited the quarter with cash and equivalents worth $4.341 billion.

Outlook

Target ( TGT ) reaffirmed its fiscal year 2025 adjusted EPS guidance at $7.00–$9.00, compared with the Street estimate of $7.35. Target ( TGT ) reiterated its outlook for a low-single-digit decline in fiscal year 2025 sales.

In the earnings conference call, Target’s outgoing CEO Brian Cornell acknowledged the impact of tariffs on the company’s financial outlook, stating that this year’s P&L would reflect some short-term pressure due to these costs.

Price Action: TGT shares are trading lower by 10.92% to $93.85 premarket at last check Wednesday.

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