Target Corp

Strong quarter + strategy “showing up” in results (and traffic improving) - Q2 net sales: $26.5B (+5.3% YoY); comp sales +3.8% driven by traffic +3.6% (ticket ~flat). - Digital comp +8.7%, led by same-day delivery >25% growth. - Confidence building that the refreshed merchandising/guest-experience strategy is compounding: guests are choosing Target more often and reacting to merchandising transitions.

Profitability improved; EPS boosted by tariff refunds, but underlying trend is still strong - GAAP & adjusted EPS: $4.11 vs. $2.05 last year. - Tariff refunds added ~$1.65 to EPS (recorded as cost-of-sales reduction). - Operating margin rate: 9.6% vs. 5.2% last year; excluding tariff refunds, operating margin ~70 bps higher YoY (i.e., improvement not solely attributable to refunds). - Gross margin rate: 33.7%; benefits included 3.7 percentage points from tariff refunds plus lapping prior-year markdown/cancellation costs and higher-margin revenue growth.

Guidance raised for full-year; includes margin/EPS view that is partially tariff-refund dependent - Net sales growth forecast raised to ~5% (from ~4% previously). - Full-year operating margin (excluding tariff refunds): ~0.5 pp higher than 2025 adjusted 4.6%. - EPS guidance raised to $9.90–$10.90 (from $7.50–$8.50); noted this range includes $1.65 tariff-refund benefit recognized in Q2 and does not include potential additional refunds later in the year. - Surprise/implication for investors: EPS upside and margin improvement look meaningfully positive, but there’s an explicit dependency on whether additional tariff refunds materialize.