Target net sales returned to growth in its fiscal Q1, exceeding the retailer’s expectations, and online sales grew even faster.
In its fiscal Q1 2026, which ended May 2, Target net sales increased 6.7% year over year to reach $25.44 billion. During its Q1 2025, Target net sales had reached about $23.85 billion. Also in Q1 2026, Target comparable sales increased 5.6% year over year. Comparable sales refer to those from both online and in stores that the retailer operated during both quarters.
Q1 2026 was also Target’s first quarter since its Q3 2024 that year-over-year sales increased.
Target said net sales in all six of its core merchandising categories were higher in Q1 2026 than they were a year prior. Those six categories are apparel, beauty, food & beverage, hardlines, home furnishings and household essentials. Additionally, comparable traffic grew 4.4% year over year.
“While we have momentum, we’re also being cautious about the near-term operating environment,” said CEO Michael Fiddelke on the retailer’s Q1 earnings call. “With consumers weighing multiple headwinds and tailwinds and recent dips in consumer sentiment, we continue to place a premium on flexibility, not wanting to swing too hard too quickly despite the early signs of momentum we’re seeing.
Non-merchandise sales, which include those through Roundel (its retail media network), the Target Circle 360 membership program and the Target Plus marketplace, increased about 25% year over year.
Target is No. 5 in the Top 2000 Database. The database is Digital Commerce 360’s ranking of North America’s online retailers by web sales.
Target is also No. 64 in the Global Online Marketplaces Database, which ranks the 100 largest global marketplaces by third-party gross merchandise value (GMV).
earnings evergreen
Target online sales in Q1 2026
In its fiscal Q1 2026, Target first-party online sales increased 8.9%. That was Target’s highest year-over-year ecommerce growth rate in a quarter since its fiscal Q3 2024, which reached 10.8% growth.
Q3 2024 was also the only time Target achieved a positive ecommerce growth rate of 10% or more since Q3 2021, amid COVID-19 pandemic restrictions. However, Target online sales had declined at a rate of 10.5% year over year in Q2 2023.
On Target Plus, a third-party digital channel, gross merchandise volume (GMV) increased nearly 60% year over year in Q1, according to Jim Lee, chief financial officer.
The retailer said it grew its same-day delivery through Target Circle 360 by more than 27% year over year.
Target is “working to simplify fulfillment to manage growing digital demand without compromising the in-store experience,” according to Lisa Roath, chief operating officer.
Target uses AI to tackle inventory challenges, improvement
Roath said Target is “clear-eyed about where we need to improve.”
She said Target has struggled with product findability and in-stock availability. Furthermore, that struggle extended to high-frequency categories such as food, and at critical times such as evenings and weekends.
Despite stronger-than-expected sales in Q1, Target “made significant progress on improving in-stocks this quarter,” Roath said. To guide that improvement, she said, Target has focused on optimizing merchandising decisions that impact how the retailer receives products within its supply-chain network and how that product flows through its system. Target is also investing in improving its data and network visibility, she said.
“We’re working to use AI to improve our demand forecasting, which helps reduce some of the volatility that can lead to some of those in-stock issues.
As part of that investment, Target has opened a receiving center in Houston and a food distribution center in Colorado.
“Given our stores-as-hubs fulfillment model, which allows us to fulfill more than 95% of our sales from our stores, any investment we make in stores is also an investment in our supply chain,” Roath said. “That said, we’re also investing in supply chain-specific facilities and technology.”
Target outlook for 2026
“We like our business model when we’re needing to chase inventory in the face of stronger-than-planned sales much more than when we find ourselves needing to cancel purchase orders or markdown excess inventory,” Fiddelke said.
After the quarter ended, a collaboration between Target and Pokémon set sales and social media engagement records for Target, according to Cara Sylvester, chief merchandising officer. She said Target is excited about another exclusive product drop coming later in its fiscal Q2.
Lee said Q1 was when Target “faced the easiest prior-year comparison of the year, and we’ll be facing the hardest comparison in Q2.” Part of that stems from Target launching sales for the Nintendo Switch 2 during its fiscal Q2 2025, he said.
For its full-year fiscal 2026, Lee said, Target anticipates a net sales increase of about 4%. That outlook is 2 percentage points higher than its prior range and reflects moderation from its Q1 sales pace, he said.
Percentages may not align due to rounding. Check back for more earnings reports. Click here to read last quarter’s article on Target earnings and online sales.
Do you rank in our databases?
Submit your data and we’ll see where you fit in our next ranking update.
Sign up
Stay on top of the latest developments in the online retail industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News. Follow us on LinkedIn, X (formerly Twitter), Facebook and YouTube. Be the first to know when Digital Commerce 360 publishes news content.