Target Q2 2025 Preview: Consumer Weakness or Company Problem?

This week is focal for big retailers, offering a reflection of consumer strength. Target (NYSE:TGT) will report fiscal Q2 2025 results before the market opens on Wednesday, August 20, 2025. Wall Street expects EPS of $2.04, a sharp 21% decline year over year, on revenue of $24.9 billion, down about 2%. Shares are down 23% year to date as investors debate whether weakness reflects the broader consumer environment or company-specific execution challenges.

In Q1 2025, comparable sales fell 3.8%, with store comps down 5.7% and digital comps up 4.7%, highlighting ongoing traffic weakness but some resilience online. Management also guided FY25 sales to decline in the low single digits and adjusted EPS between $7 and $9. Now, all eyes are on Q2 expectations around traffic trends, digital growth, and the balance between essentials and discretionary categories such as apparel and home.

With tariffs in place (for now), investors will listen for whether shoppers pulled forward purchases ahead of higher costs and how much of that burden Target can pass through without eroding demand. At the same time, expectations of Fed rate cuts later this year could provide a tailwind if they ease pressure on household budgets.

But the swing factor for both the stock and the broader market, to a certain extent, will be discretionary spending. Signs that spending on non-essentials is holding up or, conversely, that tariffs are weighing more heavily than expected, could quickly shift investor sentiment.

This article first appeared on GuruFocus.

View Comments