Target’s Q2 Earnings Call: Our Top 5 Analyst Questions

August 27, 2025 at 01:30 AM EDT

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Target’s second quarter was met with a negative market response, reflecting investor concerns about stagnant sales and compressed margins despite meeting Wall Street’s revenue and non-GAAP profit expectations. Management pointed to sequential improvement in store traffic and digital channel gains but acknowledged ongoing challenges from tariffs and inventory adjustments. CEO Brian Cornell described results as “far from satisfied,” noting that the company’s efforts to mitigate tariff impacts and improve store experience only partially offset pressures. Newly announced CEO Michael Fiddelke emphasized an urgent need to speed up organizational change and recapture Target’s merchandising authority.

Is now the time to buy TGT? Find out in our full research report (it’s free).

Target (TGT) Q2 CY2025 Highlights:

Revenue: $25.21 billion vs analyst estimates of $24.89 billion (flat year on year, 1.3% beat)
Adjusted EPS: $2.05 vs analyst estimates of $2.04 (0.7% beat)
Adjusted EBITDA: $1.95 billion vs analyst estimates of $2.05 billion (7.7% margin, 5.1% miss)
Management reiterated its full-year Adjusted EPS guidance of $8 at the midpoint
Operating Margin: 5.2%, down from 6.4% in the same quarter last year
Locations: 1,982 at quarter end, up from 1,966 in the same quarter last year
Same-Store Sales fell 1.9% year on year (2% in the same quarter last year)
Market Capitalization: $43.67 billion

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Target’s Q2 Earnings Call

Katharine Amanda McShane (Goldman Sachs) asked about the extent of price increases from tariffs. Chief Commercial Officer Rick Gomez explained that Target used pricing only as a last resort and focused on assortment adjustments and supplier negotiations to limit consumer impact.
Michael Lasser (UBS) questioned how the CEO transition would drive meaningful change. Incoming CEO Michael Fiddelke highlighted his 20 years at Target and a renewed focus on merchandising, guest experience, and technology as levers for growth.
Corey Tarlowe (Jefferies) asked for specifics on the $15 billion sales growth target. Fiddelke emphasized accelerating category transformation and building on Q2 improvements but noted work remains to achieve positive comparable sales.
Joseph Isaac Feldman (Telsey Advisory Group) probed how team mindset and merchandising culture would shift. Gomez pointed to building on bright spots like Pillowfort and Casaluna, with more consistent innovation across assortments and in-store experiences planned for next year.
Rupesh Dhinoj Parikh (Oppenheimer) inquired about what could move results toward the high end of guidance. CFO Jim Lee cited ongoing consumer and tariff uncertainty as reasons for maintaining a cautious outlook despite recent progress.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will be watching (1) execution of Target’s merchandising initiatives, especially further rollout of the FUN 101 and new home assortments, (2) stabilization of operating margins as inventory adjustments and tariff impacts subside, and (3) progress in rebalancing digital and in-store fulfillment models. Additional key markers include traction from exclusive brand launches and the ability to adapt quickly to changes in consumer demand.

Target currently trades at $96.28, down from $105.39 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).

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Target’s Q2 Earnings Call: Our Top 5 Analyst Questions

Target (TGT) Q2 CY2025 Highlights:

Our Top 5 Analyst Questions From Target’s Q2 Earnings Call

Catalysts in Upcoming Quarters

The Best Stocks for High-Quality Investors

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