AI Takeaway
Target Corporation reported a challenging FY2025, with revenue declining 1.7% to $104.8B and net income falling 9.4% to $3.7B, reflecting persistent pressure on consumer discretionary spending and margin compression.
Revenue
$104.78B
-1.68% YoY
EPS (Basic)
$8.16
-8.21% YoY
Operating Income
$5.12B
-8.07% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
Total revenue fell 1.7% year-over-year to $104.8B in FY2025 from $106.6B in FY2024, reflecting a challenging retail environment where consumers continued to prioritize essential spending over discretionary categories.
Source: Source: 10-K Income Statement
Operating income declined 8.1% to $5.1B, with operating margin contracting approximately 34 basis points to 4.88% from 5.22%, as cost reductions in SG&A (-2.0% to $21.5B) were insufficient to offset the revenue decline and higher D&A charges.
Source: Source: 10-K Income Statement & Key Ratios
Cost of revenue declined 1.3% to $75.5B, slightly less than the revenue decline of 1.7%, resulting in modest gross margin pressure; SG&A also fell 2.0% to $21.5B, demonstrating management's focus on cost discipline.
Source: Source: 10-K Income Statement
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Upgrade to unlockTarget's revenue declined 1.7% in FY2025, reflecting ongoing softness in discretionary categories that represent a significant portion of Target's merchandise mix. If consumers continue to trade down or reduce non-essential purchases, revenue and margins could face further pressure.
Source: Source: 10-K Income Statement
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Upgrade to unlock| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $104.78B | $106.57B | -1.68% |
Cost of Revenue | $75.51B | $76.5B | -1.30% |
Operating Income | $5.12B | $5.57B | -8.07% |
Net Income | $3.71B | $4.09B | -9.44% |
EPS (Basic) | $8.16 | $8.89 | -8.21% |
EPS (Diluted) | $8.13 | $8.86 | -8.24% |
SG&A Expense | $21.54B | $21.97B | -1.98% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $59.49B | $57.77B | +2.98% |
Current Assets | $20B | $19.45B | +2.83% |
Current Liabilities | $21.23B | $20.8B | +2.07% |
Stockholders' Equity | $16.16B | $14.67B | +10.22% |
Long-Term Debt | $14.4B | $13.9B | +3.55% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $6.56B | $7.37B | -10.93% |
Investing Cash Flow | $-3.65B | $-2.86B | -27.59% |
Financing Cash Flow | $-2.19B | $-3.55B | +38.39% |
Share Buybacks | $408M | $1.01B | -59.48% |
D&A | $3.13B | $2.98B | +5.13% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 4.9% | 5.2% | -0.34% |
Net Margin | 3.5% | — | — |
ROE | 22.9% | — | — |
ROA | 6.2% | — | — |
Current Ratio | $0.942 | — | — |
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Target's revenue declined 1.7% in FY2025 to $104.8B from $106.6B in FY2024, reflecting softer consumer spending particularly in discretionary categories. This marks a challenging year for the retailer as it navigated a difficult macroeconomic environment.
Target reported diluted EPS of $8.13 in FY2025, down 8.2% from $8.86 in FY2024. The decline was driven by a 9.4% drop in net income to $3.7B, reflecting both lower revenue and margin compression.
The key takeaways from Target's FY2025 10-K are declining revenue (-1.7% to $104.8B), compressed operating margin (4.88% vs. 5.22%), and a sharp reduction in share buybacks (-59.5% to $408M), all pointing to a cautious management posture. On the positive side, stockholders' equity grew 10.2% to $16.2B and the company maintained positive operating cash flow of $6.6B.
Based on the financial data, key risks for Target include continued weakness in consumer discretionary spending that drove the revenue decline, operating margin compression as costs did not fall proportionally with sales, and a current ratio below 1.0 (0.94x) indicating current liabilities exceed current assets. Rising long-term debt (+3.6% to $14.4B) alongside declining operating cash flow also presents a financial flexibility risk.
Target remains financially stable with $6.6B in operating cash flow, $16.2B in stockholders' equity, and positive net income of $3.7B, but several metrics show deterioration. The sub-1.0 current ratio, declining margins, and reduced buybacks suggest management is being cautious, and investors should monitor whether the revenue and margin trends stabilize in the coming fiscal year.