Observed Signal · Jul 16, 2026 · Earnings Report · Source: CNBC Investing · Impact: 4/5 · Sentiment: Positive
Target Outperforms While Walmart Retreats
CNBC Pro analysis by Josh Brown and Sean Russo highlights Target's recent stock outperformance versus Walmart after Target's stronger earnings momentum and turnaround plan. Target reported a Q1 revenue beat with net sales of $25.4 billion (up 6.7%), a 5.6% comp-sales increase, expanded gross margin to 29.0%, and management raised full-year sales guidance to roughly 4% growth. The piece credits high-margin retail media (Roundel) and Target Plus marketplace for margin improvement and notes operating investments including a $5 billion capex plan, the opening of Target's 2,000th store, and 100+ remodels. Market context: Target is up ~41% over the trailing 12 months versus Walmart's ~20%, and Target sits near its 52-week high while Walmart has pulled back from its highs.
Target's earnings and management guidance highlight stronger retail monetization (notably retail media Roundel and marketplace growth), signaling meaningful shifts in retailer ad revenue and merchandising that matter to retail media and ad monetization stakeholders.
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Key Takeaways & Evidence Grounding
- Target reported Q1 net sales of $25.4 billion, up 6.7%, with comparable sales rising 5.6%.
- Target's gross margin expanded to 29.0% from 28.2%; management credited high-margin streams like Roundel and Target Plus marketplace growth (GMV nearly 60%).
- Over the trailing 12 months Target is up ~41% versus Walmart's ~20%; Target closed the week at $138 (3% below its 52-week high) while Walmart closed at $113 (17% below its 52-week high).
- Target guided full-year sales to roughly 4% growth, has a $5 billion capex plan (up >$1 billion), opened its 2,000th store, has 100+ remodels in progress, and left $8.3 billion remaining on its buyback authorization.
Connected Companies & Entities
3 Entities mapped“Best Stock Spotlight: Target Corp. (TGT)...”
“Walmart had rocketed 36% higher over the prior year while Target managed just 7%....”
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Target Soars: New Leadership Sparks Stock Revival
CNBC Pro contributors Josh Brown and Sean Russo added Target Corp. to their "Best Stocks in the Market" list after the retailer’s charts and recent earnings showed improvement. Target reported fourth-quarter net sales of $30.5 billion, down 1.5% year-over-year, but it beat EPS expectations and saw membership revenue more than double year-over-year. Management has implemented leadership changes (new CEO and board members) and plans to invest in growth, including 30 new full-size stores and 130 remodels in 2026. The piece highlights Target’s retail media business, Roundel, which generates about $2 billion in revenue and is growing in the mid-teens, with a stated ambition to double in five years. Technically, the stock reclaimed its 200-day moving average and traded near $120 after the earnings-driven gap higher.
Target Q2 Sales Rise; Beauty, Hardlines Lead
Target reported second-quarter net sales of $26.5 billion, up 5.3% year-over-year, with comparable sales up 3.8% and traffic rising 3.6%. Net earnings improved to nearly $1.9 billion. Merchandise sales increased 5% and non-merchandise sales grew 20%, with the strongest category performance in hardlines, beauty and food & beverage. Target raised its full-year net sales guidance to around 5% and disclosed a 27% jump in capital expenditures to $1.4 billion driven by store remodels and 17 new store openings. The company also finalized the end of its shop-in-shop partnership with Ulta Beauty and plans to reveal its own Beauty Studio concept in Q3.
Target Profits Double as Roundel and Delivery Drive Growth
Target reported stronger second-quarter results driven by growth in its retail media business and same‑day delivery. Net sales rose 5.3% year‑over‑year to $26.5 billion while second‑quarter profit more than doubled to $1.87 billion, helped by a $994 million tariff refund. Target’s advertising business (Roundel) grew 28.6% year‑over‑year, with ad revenue of $279 million. Non‑merchandise sales climbed 20.1%, digital sales increased 8.7% and same‑day delivery jumped over 25%. Executives highlighted AI investments and early partnerships with OpenAI and Google (Gemini), and Target named Chandhu Nair as its first chief AI officer. The company raised its full fiscal‑year net‑sales outlook to about 5% growth.
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