In Q1 2026, the discount retailer reported revenue of $25.4bn, up 6.7% y-o-y, significantly exceeding its own targets. Comparable sales grew by 5.6%, bolstered notably by an 8.9% rise in online sales.

"First quarter results exceeded our expectations and provide encouraging signs that our clarified strategy is resonating with our guests and driving broad-based growth across our business," stated CEO Michael Fiddelke.

He added that the group remains "focused on discipline and flexibility in a still-uncertain operating environment," while continuing to invest in its teams, capabilities, and the enhancement of the guest experience.

Target also raised its outlook for FY 2026. The group now targets adjusted EPS near the upper end of its $7.50 to $8.50 range, as well as sales growth of approximately 4%, compared to a previous forecast that was 2% lower.

"We view these Q1 results as a validation of our long-term bullish thesis: under the leadership of new CEO Michael Fiddelke, improved operational execution is beginning to yield tangible results, albeit aided by a favorable comparison base," noted John Zolidis, an analyst specializing in US retail.

For Bank of America, which maintains an underperform rating on the stock, questions remain regarding the strength of the recovery. "In a still-fragile consumer environment, marked by rising gasoline prices and the end of the tailwind from tax refunds, the risk of a slowdown in comparable sales persists," the US bank pointed out.

Industry bellwether Walmart is scheduled to release its quarterly results on Thursday.