Was The Run In Target Stock Hiding In Plain Sight?

Target (TGT) stock returned 76.5% in the twelve months to October 7, 2026. By comparison, the S&P 500 returned 17.1%. During this stretch, shoppers returned to the retailer, and its sales grew again after a long decline. Yet when the run began, Target had posted falling sales in its three most recent financial reports. So what was there to see in those reports?

What Did Target’s Reports Show Before The Run?

The headline numbers showed sales falling by less each time, though the first comparison was distorted. In the annual report filed on March 12, 2025, fourth-quarter revenue landed 3.1% lower than a year earlier, largely because the prior-year quarter had an extra week; comparable sales rose 1.5%. The next report, filed on May 30, 2025, showed revenue down 2.8% and comparable sales down 3.8%.

On a like-for-like basis that was a step backward, and management did not pretend otherwise. During the Q1 FY2025 call on May 21, 2025, management described a very difficult environment that had hurt results. They also noted that internal efforts to resize inventory were putting some pressure on the business.

A clearer sign emerged in August 2025. On the Q2 FY2025 call on August 20, 2025, management reported that comparable sales were down 1.9%, marking an improvement of nearly 2 percentage points. The financial report filed on August 29 then showed revenue down just 0.9%. Before the stock run began on October 6, 2025, investors could watch the comparable-sales decline halve in a single quarter, from 3.8% to 1.9%. Growth was not yet visible. Buying shares at that point required betting that the decline would end.

Target Stock Moved Before Its Sales Did

Revenue fell 1.6% and then 1.5% in the two quarters following that August 2025 report. The decline widened again from 0.9%, even as the stock run was already underway. Revenue growth arrived only in the two subsequent quarters, at 6.7% and then 5.3%.

Management detailed the latest quarter’s growth on the Q2 FY2026 call on August 19, 2026. Comparable sales rose 3.8%, and management stated that a 3.6% increase in traffic was behind it. The average ticket was about flat, meaning shoppers were visiting more often without spending more per visit.

Profit rose faster than sales, though refunds drove the bulk of that increase rather than shoppers. Earnings per share hit $4.11 in the quarter, compared with $2.05 a year earlier. Tariff refunds accounted for $1.65 of the $4.11 total. On the August 20, 2025 call, management had described tariffs as a rapidly changing landscape. A refund was not an event investors could have planned on.

The stock run also belonged to Target more than to its retail rivals. Over the same twelve months, Walmart returned 6.2%, and Costco returned 4.0%.

Are Shoppers Still Coming Back To Target Today?

The latest figures suggest they are. Traffic continued to grow in the most recent quarter. On the August 19, 2026 call, Target raised its forecast for full-year sales growth to around 5%, which is one percentage point above its earlier outlook. Even so, with sales up 6.7% and 5.3% in the first two quarters, a full-year figure of around 5% implies slower growth in the second half.

Shopper recovery remains uneven, however. Management noted that the home and apparel segments are not where they need to be, adding that work in those areas will continue into 2027 and beyond. The recent refunds also make profit appear stronger than the underlying business. Excluding those refunds, earnings per share in the latest quarter were about 20% higher than a year earlier.

Target stock has fallen 7.2% over the past month, giving back some of the recent run, while the S&P 500 gained 1.8%. Before the stock moved, investors could read a comparable-sales decline that had halved, even though revenue fell again before it grew. The critical metric to read now is traffic. Target will release the next figure in its upcoming quarterly report. Traffic growth near or above the 3.6% reported in August would signal that shoppers are still returning. Growth well below it would suggest their return is fading.

Does This Mean You Should Act On TGT?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

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