Target Corporation on Tuesday reported its all-important fourth-quarter results, which run from the key holiday shopping season in November through January.
Unfortunately for the company, its results were, at best, a mixed bag. Yet despite the underwhelming earnings report, shares in the company are currently rising. Here’s what you need to know.
Target’s Q4 2025 at a glance
Before the opening bell this morning, Target reported its fourth-quarter earnings, which ended on January 31.
Out of all the earnings periods Target reports over the year, Q4 is the most important because covers the holiday shopping season when consumers are traditionally most willing to spend on non-discretionary items—a category that is Target’s bread and butter.
Here are the most salient metrics for the quarter:
- Net sales: $30.45 billion
- Net earnings: $1.04 billion
- Adjusted earnings-per-share (EPS): $2.44
The good news for the company is that its adjusted EPS of $2.44 was much better than most analysts were expecting. As CNBC notes, an LSEG survey found that most analysts were expecting and adjusted EPS of $2.16.
However, though the company beat on adjusted EPS, its net sales and net earnings both did not meet analyst expectations, and came in lower in Q4 2025 than the same quarter a year earlier.
Analysts had expected net sales of $30.48 billion for the quarter. Target came close at $30.44 billion—but even that was down 1.5% from the $30.90 billion the company brought in the same quarter a year earlier.
The company’s net earnings of $1.04 billion were also down 5.2% from the same quarter a year earlier.
Target’s problems are political and economic
Announcing its Q4 2025 results, Target’s new CEO, Michael Fiddelke, who has only been in the role since last month, said that the company was focused on its “next chapter of growth, rooted in strengthening our merchandising authority, delivering an elevated and differentiated shopping experience, advancing our use of technology, and continuing to serve and invest in our team and communities.”
However, one of the largest challenges that Target is up against is blowback from its community of shoppers.
Last summer, Target faced heavy criticism from many of its shoppers for rolling back its diversity, equity, and inclusion (DEI) initiatives in the wake of President Trump’s second inauguration.
More recently, as noted by CNBC, Trump’s immigration crackdown has been causing headaches for Target’s new leadership. As noted by the Associated Press, the company’s customers have been vocal in their desire for the company to take a public stand against Trump’s policies, particularly after the deaths of ICE protesters in Target’s hometown of Minneapolis.
Of course, Target’s stagnating sales over the past few years aren’t limited to political problems. It also continues to face economic ones.
The biggest problem for Target is that a majority of the goods it sells are discretionary items, and consumers have been cutting back on those for years as costs continue to rise due to inflation and Trump’s tariffs.
To make matters worse, many customers have complained for years that Target’s stores were becoming messier and less visually appealing, leading them to shop there less frequently or seek out alternative retailers.
Last month, Target announced corporate layoffs as part of its plan to reinvest in the in-store experience.
Why is Target stock up despite lackluster sales?
Despite Target’s lackluster quarter, shares in the company are currently rising in premarket trading.
As of this writing, Target stock (NYSE: TGT) currently up about 3.7% to $117.45. Factors for this rise could include things like relief from investors that the company at least met analysts’ net sales expectations.
Target also announced that it expects modest next sales growth of about 2% for 2026. Given that the company has faced declining or stagnating sales for almost four years, investors are likely to reward the company for any expectation of reversing that trend, no matter how small.
Despite Target’s ongoing challenges, the company’s shares have performed decently year-to-date.
As of yesterday’s market close, TGT shares were up nearly 16% since the start of the year. Over the past six months, the company’s share price has risen more than 22%.
Yet over the past 12 months, TGT shares had declined nearly 9% as of yesterday’s close.