The news: Target said it expects to emerge from its multiyear sales slump in 2026, buoyed by sharper merchandising and better customer experience.

• Net sales are projected to rise 2% this year, supported mainly by new stores and fast-growing advertising, marketplace, and membership businesses, alongside a slight increase in same-store sales.
• Adjusted earnings per share are expected in the $7.50 to $8.50 range, with the midpoint higher than the Bloomberg consensus estimate.

By the numbers: Despite the optimism, the retailer has work to do to right the ship.

• Net sales declined 1.5% YoY during the holiday quarter, more than expected, marking the 13th straight quarter of flat or declining sales.
• Comparable sales fell 2.5%, as a 1.9% increase in comparable digital sales failed to offset a 3.9% decline in comparable store sales.
• Foot traffic was down 2% YoY in Q4 2025, according to Placer.ai, showing that the retailer is struggling to give shoppers a reason to visit its stores.

However, CEO Michael Fiddelke pointed to a “healthy, positive sales increase in February” as validation that his strategy for getting Target back on track is beginning to pay off.

The strategy: Restoring its merchandising differentiation is top-of-mind for Target, as distinctive products remain one of the strongest ways to persuade shoppers to spend. The retailer is directing investments to categories like beauty, health and wellness, and food and beverage, where it sees the most opportunity to grow and encourage repeat visits.

• Target will spend over $1 billion on its grocery business this year, more than double expenditures in prior years, to increase its fresh foods and satisfy shoppers’ desire for newness.
• It’s also positioning itself as a wellness destination with a larger assortment of relevant products across categories—including food, personal care, and apparel—and initiatives like the removal of synthetic food dyes from its cereal selection.

Refreshing the in-store experience is another priority as Target works to make its stores more inviting and address complaints about messy aisles and out-of-stock items. Most of the planned $5 billion in capital expenditures this year will go toward opening new stores and remodeling existing locations. Target will also invest hundreds of millions of dollars in store labor and employee training to improve customer service and create a more welcoming, friendly environment.

The implications: Target is doing what needs to be done to win back shoppers and reclaim its reputation as a style destination. By focusing on sharper execution at every point of the customer journey—from product selection to the in-store experience to omnichannel capabilities—the retailer is confident it can break free of its slump and gain momentum as the year continues.

Go further: To see how Target stacks up against mass merchant rivals Amazon and Target, check out our Live: Q4 2025 Retail & Ecommerce Earnings Tracker.