Target (NYSE:TGT) posted a solid fourth-quarter performance on Tuesday, as the big-box retailer leaned into its digital marketplace and subscription services to offset a broader slowdown in discretionary consumer spending.
The Minneapolis-based retailer reported fourth-quarter net sales of $30.5 billion, bringing its full-year revenue to $104.8 billion.
While traditional brick-and-mortar traffic faced headwinds throughout 2025, Target’s pivot toward "capital-light" revenue streams showed significant momentum.
Membership revenue more than doubled during the period, and the company's third-party marketplace, Target Plus, grew by more than 30%.
Target’s earnings also outpaced some analyst expectations.
Fourth-quarter GAAP earnings per share (EPS) came in at $2.30, while Adjusted EPS reached $2.44.
For the full year, the company reported GAAP EPS of $8.13 and adjusted EPS of $7.57, reflecting a disciplined approach to inventory management and a reduction in markdowns compared to the prior year.
A standout metric in the report was the growth of non-merchandise sales, which surged by more than 25%.
This category includes advertising revenue through Roundel and other service-based offerings, which carry significantly higher margins than traditional retail sales.
Looking ahead, Target provided a 2026 guidance that suggests a year of cautious optimization.
The company expects net sales growth of approximately 2%, with both GAAP and adjusted EPS projected to fall between $7.50 and $8.50.