Executive Summary
Target Corporation delivered a resilient Q4 2026 with a pronounced revenue upturn and solid cash generation, underscoring its enduring position in the U.S. specialty retail space. Reported revenue of $30.915 billion represented a YoY increase of approximately 26.0%, supported by a healthy gross margin of about 24.15% and a net income margin of roughly 3.57%. Despite the topline strength, operating leverage remained modest, with operating income of $1.498 billion and an operating margin near 4.85%. The company generated $3.289 billion of operating cash flow and $2.366 billion of free cash flow, enabling meaningful capital allocation activity including roughly $501 million in share repurchases and $513 million in dividends. Target ends the period with a strong liquidity position (cash and cash equivalents of $4.76 billion) and a total asset base of ~$57.8 billion, financed by ~ $19.9 billion of gross debt and a stockholders’ equity base of ~$14.7 billion.
The qualitative takeaway centers on Target’s ongoing ability to monetize its omnichannel model and optimize asset utilization in a volatile macro environment. Management commentary (where available) typically emphasizes investments in guest experience, store fleet optimization, and e-commerce capabilities as catalysts for sustaining traffic and elevating basket size. The balance sheet shows a disciplined approach to capital deployment, with free cash flow supporting deleveraging and shareholder-friendly activity over time, even as the firm maintains a prudent liquidity stance. The near-term profitability remains sensitive to promotional activity, mix shifts, and discounting pressures, but the overall trend points to a sustainable growth trajectory driven by higher-ticket categories and stronger digital penetration.
Key Performance Indicators
Key Insights
Revenue: $30.915B (YoY +26.02%; QoQ +0.00%)
Gross Profit: $7.467B (YoY +15.52%; QoQ +0.00%)
Operating Income: $1.499B (YoY +15.59%; QoQ +0.00%)
Net Income: $1.103B (YoY +17.09%; QoQ +0.00%)
EPS: $2.42 (YoY +18.63%; QoQ +0.00%)
Gross Margin: ~24.15%
Operating Margin: ~4.85%
EBITDA: $2.267B (EBITDA Margin ~7.33%)
Net Margin: ~3.57%
Interest Expense: $90.0M
Depreciation & Amortization: $766.0M
Cash Flow from Operations: $3.289B
Capital Expenditures: $(923)M
Free Cash Flow: $2.366B
Net Debt: ~$1...
Financial Highlights
Revenue: $30.915B (YoY +26.02%; QoQ +0.00%)
Gross Profit: $7.467B (YoY +15.52%; QoQ +0.00%)
Operating Income: $1.499B (YoY +15.59%; QoQ +0.00%)
Net Income: $1.103B (YoY +17.09%; QoQ +0.00%)
EPS: $2.42 (YoY +18.63%; QoQ +0.00%)
Gross Margin: ~24.15%
Operating Margin: ~4.85%
EBITDA: $2.267B (EBITDA Margin ~7.33%)
Net Margin: ~3.57%
Interest Expense: $90.0M
Depreciation & Amortization: $766.0M
Cash Flow from Operations: $3.289B
Capital Expenditures: $(923)M
Free Cash Flow: $2.366B
Net Debt: ~$15.113B; Total Debt: $19.875B
Cash & Equivalents: $4.762B; Inventory: $12.74B; Current Assets: $19.454B; Total Assets: $57.769B
Total Liabilities: $43.103B; Total Stockholders’ Equity: $14.666B
Current Ratio: 0.935; Quick Ratio: 0.323; Cash Ratio: 0.229
Payout Ratio: ~46.5%; Dividend Yield: ~0.81%; Price/ Earnings: ~14.4x; Price/Book: ~4.33x
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
30.92B |
26.02% |
0.00% |
| Gross Profit |
7.47B |
15.52% |
0.00% |
| Operating Income |
1.50B |
15.59% |
0.00% |
| Net Income |
1.10B |
17.09% |
0.00% |
| EPS |
2.42 |
18.63% |
0.00% |
Key Financial Ratios
operatingProfitMargin
0.68%
operatingCashFlowPerShare
$7.14
freeCashFlowPerShare
$5.14
dividendPayoutRatio
46.5%
Management Commentary
Note: The dataset provided contains an empty earnings transcript post. No verbatim management quotes or transcript highlights are available within the supplied materials. As such, the sections below rely on reported financials and standard management commentary themes commonly associated with Target’s quarterly releases.
Forward Guidance
No explicit forward-looking guidance is included in the supplied data. Based on the reported results, the company demonstrated robust revenue growth and solid cash generation, which supports continued investments in omnichannel capabilities, guest experience enhancements, and store optimization. Key factors to watch include: (i) trajectory of comparable-store sales in a high-promotional environment, (ii) cadence of capital expenditure on store modernization and digital infrastructure, (iii) mix-driven margin pressure from promotional activity and product mix shifts, and (iv) working capital dynamics given elevated inventory levels. Investors should monitor any updated guidance on mid- and long-term targets for same-store sales growth, gross margin stabilization, and free cash flow generation given ongoing promotional cycles and competitive dynamics.