Shares of Target Corporation (NYSE: TGT) stayed green on Friday. The stock has dropped 15% in the past three months. The retail giant delivered a muted performance in the third quarter of 2025 against a backdrop of soft consumer demand, tough competition, and macroeconomic uncertainty. The company is implementing various measures to transform its business and drive growth.
Lower Q3 sales and profits
Target saw its sales and earnings decrease in the third quarter of 2025 compared to the previous year. Net sales of $25.3 billion were down 1.5% while comparable sales fell 2.7%. On an adjusted basis, earnings per share declined 4% year-over-year to $1.78.
Guidance cut
Target lowered its profit guidance for the full year of 2025, and now expects GAAP EPS to range between $7.70-8.70 and adjusted EPS to range between $7.00-8.00. The prior expectations were for GAAP EPS of $8.00-10.00 and adjusted EPS of $7.00-9.00.
Focus on value and shopping experience
Target’s comparable store sales declined 3.8% in the third quarter of 2025. As mentioned on the earnings call, the retailer continued to see softness in discretionary categories like home and apparel. Consumers are being selective in their purchases as they stretch their budgets and seek value. They are focusing their spending on categories like food, essentials, and beauty.
Even though customers continue to look for deals in discretionary categories, they are responding to new and trendy assortments. This was evidenced by a 10% comp in toys and double-digit growth in music, video games and sporting equipment, all categories where Target invested in unique assortments.
The company is working on improving its assortment to include trendy items while also focusing on affordability and value. It is also maintaining a balance between national brands, its own brands, and emerging brands in its range of products.
Target saw strong sales around seasonal events such as back-to-school, back-to-college, and Halloween, which underscores the importance of holidays for its business. As it prepares for the upcoming holiday season, it is focusing on providing value to consumers by lowering prices on food and essential items and offering deals on a range of holiday items.
TGT continues to invest in its digital capabilities to improve the shopping experience and drive sales. The company recorded a 2.4% growth in its digital comparable sales in Q3, driven by more than 35% growth in same-day delivery, powered by Target Circle 360, and continued growth in drive-up.
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