"Adjusted EPS of $2.44 beat the consensus estimate of $2.16 by ~$0.28 (about 13.0%), a meaningful positive surprise that points to better-than-expected execution on profitability. GAAP EPS was $2.30, including $0.15 of non-recurring business transformation costs."
"Revenue continues to drift lower year-over-year, and operating margin dipped on a GAAP basis versus last year even as gross margin improved modestly. Guidance calls for a return to growth in fiscal 2026, with net sales growth around 2% and GAAP/adjusted EPS of $7.50 to $8.50."
"Full-year operating cash flow was $6.562B and capital expenditures were $3.727B, implying free cash flow of roughly $2.84B (down from roughly $4.48B last year using the same cash flow minus capex approach). Dividends paid were $2.053B for the year, implying about 1.38x coverage on this simplified free cash flow basis."
Target Corporation reported a significant earnings beat in Q4 fiscal 2025, delivering adjusted EPS of $2.44 against a consensus estimate of $2.16, representing a 13% outperformance. The company achieved this through disciplined cost management, with GAAP EPS at $2.30 after accounting for $0.15 in non-recurring business transformation costs. However, revenue declined 1.5% year-over-year to $30.453 billion, and operating margins contracted on a GAAP basis despite modest gross margin improvement. Management provided fiscal 2026 guidance projecting approximately 2% net sales growth and EPS between $7.50 and $8.50. Free cash flow weakened to $2.84 billion from $4.48 billion year-over-year, though dividend coverage remained adequate at 1.38x.
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