The numbers
5.3%: How much net sales increased during the second quarter, year-over-year, reaching $26.5 billion.
28.6%: Target’s year-over-year revenue growth through Roundel, the company’s advertising network. Ad revenue hit $279 million compared to $217 million in the second quarter of 2025.
20.1%: Year-over-year increase in non-merchandise sales, which includes Roundel, loyalty membership, and a third-party marketplace.
3.6%: How much comparable store traffic increased in Q2, year-over-year.
8.7%: Boost in digital sales. Same-day delivery jumped more than 25%, year-over-year.
The watercooler talk
Target’s second-quarter profits more than doubled to $1.87 billion, boosted by nearly $1 billion in tariff refunds. The retailer’s top-line strength emerged from Fun101, food and beverage, and beauty categories.
Target CEO Michael Fiddelke, chief merchandising officer Cara Sylvester, EVP and CFO Jim Lee, and COO Lisa Roath participated in the earnings call to talk through Target’s business.
Fiddelke used the earnings call to spotlight Target’s AI push. The retailer was one of a handful of companies that partnered early with OpenAI, Google Gemini, and other platforms shaping agentic commerce. Fiddelke said digital traffic from external AI platforms is growing more than 3.5 times faster than the industry average, year-over-year.
Target also named its first chief AI officer, Chandhu Nair, earlier this year.
The AI investments also extended to its shopping experience. Target rolled out AI-powered teacher and college wish lists for back-to-school season, along with more personalized content on the app’s home screen.
Sylvester said total wish list creation was up 50% from last year.
“Items added to these lists more than doubled, and conversion across our key back-to-school pages is up nearly 20%, with some important weeks still ahead,” Sylvester added.
The key quote
Target’s continued performance growth gave executives enough confidence to hike its full fiscal-year outlook. The retailer now expects full-year net sales to grow around 5%, a full point higher than its previous guidance.
“We continue to look first to find other means to reduce the impact of tariffs, including changes to country of origin, collaborating with vendors to find offsets, and adjusting assortment. Those tactics have helped us to reduce tariff pressure while continuing to deliver the combination of style, design, and value consumers expect from Target,” Lee said during the earnings call.
