Executive Summary
Target Corporation delivered a resilient QQ2 2025 performance, characterized by a modest topline decline year-over-year but meaningful improvements in gross margin and operating profitability. Revenue for QQ2 2025 stood at $25.21 billion, down 1.78% YoY and up 5.72% QoQ, while gross profit reached $7.31 billion, yielding a gross margin of approximately 28.99%. Operating income was $1.317 billion, with an operating margin of about 5.22%, signaling ongoing benefit from price/mix actions and disciplined cost management. Net income of $0.935 billion produced an EPS of $2.05, up roughly 10% YoY on a per-share basis and down about 10% QoQ, reflecting seasonality and base effects. Free cash flow (FCF) was robust at $0.913 billion, supported by operating cash flow of $2.134 billion and capital expenditures of about $1.225 billion. The balance sheet remains solid, with cash and cash equivalents of $1.617 billion and a total debt load of $18.83 billion, yielding a net debt position of roughly $17.21 billion and a debt-to-capitalization ratio of 0.611. Notably, cash flow generation and balance sheet strength provide ample flexibility to fund dividends and capital allocation priorities.
Key Performance Indicators
QoQ: -10.09% | YoY:10.22%
Key Insights
Revenue: QQ2 2025 revenue of $25.211B; YoY change: -1.78%; QoQ change: +5.72%. Gross Profit: $7.308B; Gross margin: 28.99%; YoY gross profit growth: +9.83%; QoQ growth: +20.53%. Operating Income: $1.317B; Operating margin: 5.22%; YoY: +12.66%; QoQ: +49.83%. Net Income: $0.935B; Net margin: 3.71%; YoY: +9.48%; QoQ: -9.75%. EPS (Diluted): $2.05; EPS growth: YoY +10.22%; QoQ -10.09%. EBITDA: ~$2.105B; EBITDARatio: ~8.35%; Net cash from operating activities: $2.134B; Free cash flow: $0.913B. Cash an...
Financial Highlights
Revenue: QQ2 2025 revenue of $25.211B; YoY change: -1.78%; QoQ change: +5.72%. Gross Profit: $7.308B; Gross margin: 28.99%; YoY gross profit growth: +9.83%; QoQ growth: +20.53%. Operating Income: $1.317B; Operating margin: 5.22%; YoY: +12.66%; QoQ: +49.83%. Net Income: $0.935B; Net margin: 3.71%; YoY: +9.48%; QoQ: -9.75%. EPS (Diluted): $2.05; EPS growth: YoY +10.22%; QoQ -10.09%. EBITDA: ~$2.105B; EBITDARatio: ~8.35%; Net cash from operating activities: $2.134B; Free cash flow: $0.913B. Cash and short-term investments: $1.617B; Inventory: $12.684B; Total current assets: $16.098B; Property, plant and equipment (net): $35.788B; Total assets: $53.206B; Total current liabilities: $19.333B; Long-term debt: $17.724B; Total debt: $18.83B; Total stockholders’ equity: $11.99B; Net debt: ~$17.21B; Dividends paid: $0.499B; Interest expense: $0.116B; Interest coverage: ~8.72x.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
24.77B |
-1.78% |
5.72% |
| Gross Profit |
6.38B |
9.83% |
20.53% |
| Operating Income |
1.23B |
12.66% |
49.83% |
| Net Income |
835.00M |
9.48% |
-9.75% |
| EPS |
1.81 |
10.22% |
-10.09% |
Key Financial Ratios
operatingProfitMargin
4.97%
operatingCashFlowPerShare
$4.62
freeCashFlowPerShare
$1.98
dividendPayoutRatio
59.8%
Management Commentary
Notes: The provided data set includes an empty earnings transcript. As a result, no management quotes or theme-based highlights from an earnings call are available in this dataset. The analysis below reflects quantitative results and qualitative implications derived from the reported figures and industry context. If a transcript becomes available, this section should be updated to incorporate management commentary on revenue mix, merchandising strategy, cost control, and guidance.
Forward Guidance
Explicit forward guidance for QQ3/FY2025 is not included in the provided data. In formulating an outlook, the following factors are considered: 1) Revenue trajectory: A modest YoY revenue decline in Q2 highlights sensitivity to consumer spending and promotional intensity; a continuation of disciplined pricing and mix optimization will be essential to sustain top-line progress in H2 2025. 2) Margin trajectory: Margin expansion has materialized through price/mix improvements and cost controls; sustained gross margin around high- to mid-20s and operating margin in the 5% range would be supportive if promotional activity remains prudent. 3) Cash flow and capex: Operating cash flow strength supports ongoing capex and shareholder returns; free cash flow generation near $0.9B provides flexibility to fund dividends and potentially opportunistic buybacks. 4) Balance sheet health: A leverage profile with net debt of ~$17.2B and a debt-to-capitalization of ~0.61 requires ongoing monitoring of interest costs and debt maturities, particularly in a high-inflation, high-rate environment. Monitoring metrics to watch include: revenue recovery in H2 2025, gross and operating margins, inventory levels (DIO around 62 days), working capital efficiency, and capital allocation policy (dividends vs. buybacks vs. reinvestment).