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Target Is Winning Back Shoppers As Store Traffic Builds And Its Turnaround Takes Hold
Retail Target Is Winning Back Shoppers As Store Traffic Builds And Its Turnaround Takes Hold By Pamela N. Danziger ,
Forbes contributors publish independent expert analyses and insights. Pam Danziger reports on retail, focused on the luxury consumer market. Follow Author Aug 21, 2026, 10:25am EDT Summary Target delivered a strong second-quarter report, with revenues up 5.3% to $26.5 billion and comparable sales climbing 3.8%, marking its second consecutive positive quarter. Growth was propelled by an 11% surge in hardline sales and 7% gains in beauty and food/beverage, attracting new customers and boosting foot traffic by 4.7% year-over-year. The retailer also reduced prices on over 10,000 items. Target is executing a four-pronged turnaround strategy focusing on merchandising, guest experience, tech acceleration, and store operations, leading to raised year-end guidance. While "Fun 101" categories are thriving, apparel and home still require attention. Analysts remain cautiously optimistic, acknowledging progress but awaiting sustained profit and traffic growth.
For the second quarter in a row, Target delivered a positive sales report after digging itself into a deep hole, with revenues falling from $109.1 billion in 2022 to $104.8 billion in 2025. Second-quarter revenues ending the first of August rose 5.3% over last year—helped along by 17 new stores opened in the quarter—to $26.5 billion. More importantly, comparable sales climbed 3.8%.
Propelling growth was an 11% surge in hardline sales—Target’s “Fun 101” segment, which includes toys, gaming, music, collectibles, tech accessories and sporting goods—along with 7% gains in both beauty and food and beverage. Together, these three categories account for more than half of merchandise sales.
And they’re proving a powerful lure to draw new customers in and bring back former shoppers to see what newness Target has in store. Shoppers also have a more practical reason to visit: Target has reduced prices in more than 10,000 products over the past year. Notably 95% of its school supplies assortment is priced at or below last year’s levels.
Placer.ai reports Target foot traffic rose 4.7% year over year in the second quarter with July being its strongest month so far, with visits up 7.3%—early-bird back-to-school shopping may account for much of this as consumers lean into affordability as their top priority in what the National Retail Federation says will be a record-breaking shopping season.
Assuming shoppers find what they’re looking for—a reasonable assumption given the latest results—Target is counting on continued store remodels, elevated digital experiences and on-going enhancement in newness and design across apparel and home to set up a strong rest of the year.
Last year’s third and fourth quarters were disappointing, with sales down 1.5% in both periods and comparable sales falling 2.7% in the third quarter and 2.5% in the fourth. With positive tailwinds at its back—and lapping last year’s weak performance—Target has raised year-end guidance for a second time this year to around 5%, one percentage point higher than before. If it hits the mark, revenues will be ahead of when they peaked in 2022.
As CEO Michael Fiddelke tells it, Target is just getting started. “While there’s still meaningful work ahead, we’re encouraged by the progress we’re making and remain focused on executing with discipline, staying agile in a dynamic operating environment and investing in our team and capabilities to drive sustainable, profitable growth over the long term,” he said in a statement.
The company’s strategy back to sustainable growth is anchored in four key priorities: reclaiming merchandising authority, elevating the guest experience, accelerating technology and strengthening team execution and community impact.
In the second quarter, Fiddelke and his team made meaningful progress toward all of them—signals that the turnaround strategy is working.
Target’s merchandising reset is designed to “move at the speed of culture,” as chief merchandising officer Cara Sylvester put it. She explained the keys are presenting a sharper curation, clearer point of view and newness with a value edge that feels distinctly Target.
Emphasizing progress to date, Sylvester admitted that home and apparel—two categories most tied to the Tar-zhay mystique—are not where they should be. Specifically, apparel and accessories revenues were flat at $4.1 billion, as were home furnishings and décor at $3.7 billion.
However, the company is setting the stage for a comeback. Kids’ basics posted double-digit growth and the Art Class tween brand rose 50%. Sylvester also pointed to the limited-time collaboration with women’s premium fashion brand LoveShackFancy—its largest design collaboration in history—for back-to-school girl’s clothing, accessories, school supplies and tech tools.
In home, nearly three-fourths of the decorative accessories assortment has been replaced. It will kick up selections in kids home and bedding in the third quarter and a major refresh to kitchen and dining assortments is coming in 2027.
One category has clearly reclaimed its merchandising authority: Fun 101, the old toy, sporting goods and tech departments. That transformation began late last year and is paying off in double-digit growth. Displays of TVs and bikes have been reimagined, and more space now is devoted to wearable tech, Lego, trading cards, and collectibles.
The results are showing. Target’s value-oriented Heyday $10 headphones jumped 35% over previous year. Lego sets climbed more than 30% and plush—now displayed on a Plush Wall—rose over 20%.
Adding to the joy: A Pokémon collaboration pulled in thousands of new guests and reinforced the Target’s leadership in fandom and collectibles.
Food and beverage—Target’s largest segment at $6 billion this quarter—is undergoing its biggest transition in more than a decade. Nearly half of the center store grocery assortment has been re-pr...
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