Target Enters Holidays With Sales Up 5.3% and a Turnaround to Prove

Target's Q2 net sales grew 5.3% year over year to $26.5 billion, with comparable sales up 3.8% — a sharp reversal from last year, when the retailer entered the holidays after a string of consecutive quarterly sales declines.

In the third quarter of 2025, Target's net sales dropped 1.5% year over year and comps decreased 2.7%. The holiday period was worse: Q4 net sales fell 1.5% and comps declined 3.9%.

"Last year, Target entered the holidays in a weak position," GlobalData Managing Director Neil Saunders told Retail Dive via email. "It was struggling to keep its stores in order, it had challenges with adequate staffing, and it was on the back foot in terms of range development. The whole business lacked confidence and momentum."

Saunders credited Target with a solid gift assortment and some innovation in private label holiday food in 2025, but called those efforts drops in the "otherwise quite insipid ocean."

What changed in 2026?

Michael Fiddelke took over as CEO from Brian Cornell in February, succeeding a reign that ended after several socio-political controversies damaged Target's reputation. Fiddelke revealed a broader turnaround strategy soon after taking control.

The first two quarters showed progress. Q2's 5.3% net sales gain built on Q1's 6.7% year-over-year growth.

Noteworthy 2026 initiatives include:

• A renewed partnership with fashion designer Isaac Mizrahi
• The new Beauty Studio store experience following the end of its Ulta partnership
• Expansion of its online marketplace

The turnaround signs have been encouraging, according to Katherine Black, a partner at Kearney leading food, drug and mass market retail. For the holidays, she said, Target's ability to combine value with inspiration — especially where price matters to consumers — is what it must nail.

The company has already moved on price, announcing in September a new set of reductions on apparel and home merchandise, two categories where turnaround progress has been slower.

"Target's continued price investments reinforce our view that management is making the right decisions for the customer and the business," Jefferies analysts said in an emailed note. "In our view, the investment case is increasingly centered on the combination of sharper pricing and significantly improved assortments."

Target previously cut prices across a wide product selection in December to attract value-conscious shoppers, and launched last holiday season with 20,000 new products.

Who is running merchandising now?

Cara Sylvester became chief merchandising officer in February, a newly consolidated position, and added new senior vice presidents to her team in May.

"Target will make some bold bets this holiday season and its store environments will be a lot more celebratory and immersive — which is what consumers want," Saunders said. "I also think we will see even more effort in categories like gifting, home decorations, and holiday food. Target knows it's got to inspire customers and while correcting past errors is a work in progress, it has advanced since last year."

Can Target fix in-store consistency?

Executives have pressed the consistency theme for several quarters. "We've heard clearly from our guests and from many of you that our in-store experience has been inconsistent," Fiddelke told analysts during a Q4 earnings call in March. "Too often, we're cluttered, out of stock or even transactional. So we're making improvements, first, upstream at headquarters and in our supply chain facilities to remove complexity for our stores."

To fix those issues, store operating models were reset in the spring around improved stocking logistics, visual storytelling and customer support. The approach included store payroll investments and cuts to some corporate roles earlier in the year.

"Strategy only matters if there's strong execution behind it," Sylvester told analysts during an earnings call in May. "It's not enough to have the right assortment. We have to bring it to life consistently across stores and digital with product reliability our guests can trust."

Consistent execution on store staffing and guest experience is essential for the holidays, Black said: "Taking it as a given that the strategy is right, they'll still need to deliver a consistent experience to consumers, from product availability and store presentation to fulfillment and checkout."

Q4 will show whether two quarters of growth can hold under holiday pressure, with sharper pricing and refreshed assortments now carrying the investment case.