MINNEAPOLIS / RICHFIELD, Minn. — Target Corporation kicked off Tuesday's earnings slate with a stronger-than-expected fourth-quarter report, posting adjusted earnings per share of $2.44 against the Wall Street consensus of $2.16, a beat that sent shares up more than 3% in premarket trading. Revenue came in at $30.45 billion, marginally below the consensus of $30.51 billion, but management's commentary on improving trends lifted investor sentiment.
"Sales and traffic increased in the last two months of the holiday quarter," Chief Executive Michael Fiddelke said in a statement, adding that sales turned positive year-over-year in January — a development he described as an "important milestone on our path back to growth this year." The company had struggled with softer discretionary spending trends over the past year, particularly in big-ticket merchandise categories, but the January inflection suggests consumer sentiment may be stabilizing at the lower end of the income spectrum.
Target shares have outperformed meaningfully year-to-date, rising more than 15.6%, besting Walmart's 15% advance and the broader S&P 500's modest gain. Analysts at Zacks noted that the stock's recent positive momentum suggested market participants anticipated an encouraging forward outlook, and Tuesday's results largely validated that expectation.
Best Buy, reporting simultaneously before the open, delivered a split decision. Adjusted diluted EPS of $2.61 beat the consensus estimate of $2.47 by $0.14, while revenue of $13.814 billion came in just below the $13.88 billion forecast. Enterprise comparable sales declined 0.8% in the quarter, in line with the company's own guidance, though the softness was concentrated in November and December, with a rebound in late December and January. Best Buy shares surged as much as 12% in premarket trading on the EPS beat before trimming gains.
Chief Executive Corie Barry said the company's overall market share was at least flat, attributing the sales softness to slightly weaker industry-wide demand rather than competitive losses. Best Buy announced it would increase its quarterly dividend to $0.96 per share, marking the thirteenth consecutive year of dividend growth, reinforcing its commitment to shareholder returns.
For fiscal 2027, Best Buy guided revenue in the range of $41.2 billion to $42.1 billion, with comparable sales ranging from down 1% to up 1%, and adjusted diluted EPS of $6.30 to $6.60. The tepid guidance reflects ongoing caution around discretionary consumer spending in the consumer electronics segment, where demand for home theater equipment and major appliances has remained subdued in the post-pandemic period.
The two retail reports collectively paint a picture of a consumer environment that is stabilizing but uneven. Analysts noted that strength remains concentrated among higher-income and younger consumer cohorts, with essentials and experiences capturing a larger share of wallet than durable goods. For investors, Target's beat and improved trend language represent the more constructive datapoint heading into what promises to be a volatile trading session shaped by geopolitical developments in the Middle East.