Target Corporation has reported third quarter 2025 results that show softer store sales, stable gross margins, and a clear push into digital, advertising and membership income ahead of the holiday season.
Net sales for the quarter came in at $25.3 billion, down 1.5% on the same period in 2024. Comparable sales fell 2.7%, with store comps down 3.8% and digitally originated sales up 2.4%.
Merchandise sales declined 1.9%, while non-merchandise sales jumped 17.7%, helped by strong double-digit growth in Roundel advertising, membership and marketplace revenues.
On profitability, third quarter GAAP diluted EPS was $1.51, down from $1.85 last year.
Adjusted EPS – which excludes severance and asset-related charges tied to business transformation – was $1.78, compared with $1.85 in 2024.
Operating income for the quarter was $0.9 billion, 18.9% lower than a year ago when including non-recurring items. Excluding those items, operating income was $1.1 billion.
The operating income margin rate was 3.8% versus 4.6% last year, or 4.4% on an adjusted basis.
Gross margin held broadly steady at 28.2% (2024: 28.3%), with higher markdowns partly offset by growth in advertising and other revenues, lower inventory shrink, and efficiency gains in supply chain and digital fulfilment. The SG&A expense rate including non-recurring items rose to 21.9% from 21.3%, but was 21.3% on an adjusted basis, in line with last year.
Category And Channel Performance
Within the sales mix, Food & Beverage and Hardlines (“Fun 101”) delivered comparable sales growth in the quarter. That was offset by ongoing weakness across the wider discretionary portfolio, including categories like apparel, home and parts of household.
Digital comparable sales grew 2.4%, supported by more than 35% growth in same-day delivery powered by Target Circle 360. Stores still represent the bulk of the business, with 80.7% of merchandise sales store-originated and 19.3% digital.
Holiday Offer And Guidance
Heading into the peak trading period, Target is leaning on price, exclusive product and fulfilment to support demand. For the holidays, the company plans to offer:
- Over 20,000 new items, twice as many as last year, with more than half exclusive to Target.
- Thanksgiving meals for four under $20, including turkey at $0.79 per pound.
- Lower prices on thousands of food, beverage and essential items.
- Thousands of gifts from $5 and thousands of toys under $20.
- An expanded reach of next-day shipping to more than half of the U.S. population.
For Q4 2025, Target is maintaining its expectation of a low-single-digit decline in sales.
Full-year GAAP EPS is now expected to be $7.70–$8.70, with Adjusted EPS guided to around $7.00–$8.00, excluding gains from interchange fee litigation settlements and the business transformation costs.
Balance Sheet, Cash Returns And ROIC
In the third quarter, Target paid $518 million in dividends, slightly above the $516 million paid a year earlier, reflecting a 1.8% increase in the dividend per share and a lower average share count.
The company also repurchased $152 million of stock, retiring 1.7 million shares at an average price of $91.59. As of quarter-end, approximately $8.3 billion remained under the existing share repurchase authorization from August 2021.
For the trailing twelve months through Q3 2025, after-tax return on invested capital (ROIC) was 13.4%, compared with 15.9% for the prior-year period.
Target ended the quarter with 1,995 stores and total retail square footage of just over 250 million square feet across its U.S. network.
A webcast of the Target Q3 2025 earnings conference call is available via the company’s investor relations site, with a replay offered for those who could not join live.
Editor’s note: This article is based entirely on Target Corporation’s official Q3 2025 earnings release and accompanying financial tables dated November 19, 2025.
