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Can Target Convert Hardlines' Momentum Into Company-Wide Success?
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Key Takeaways
Target Hardlines surged on a 5% comps gain, narrowing the retailer's overall sales decline.
Tech accessories, toys and Nintendo Switch 2 launches boosted its category performance.
AI forecasting and faster supply-chain moves aim to sustain momentum beyond Hardlines.
Target Corporation (TGT - Free Report) found a bright spot in the second quarter of fiscal 2025 with the revival of its Hardlines business. Through the “FUN 101” approach, the retailer is infusing electronics, toys and tech accessories with stronger style and cultural relevance, echoing the merchandising authority Target has long demonstrated in its apparel offerings. The effort delivered a 5% comparable-sales increase, the best Hardlines results since 2021.
Multiple trends fueled this gain. Trading card sales have surged nearly 70% year to date and are on track to exceed $1 billion in annual revenues. Tech accessories and value-priced toys also performed well, while the launch of the Nintendo Switch 2 positioned Target as a leading gaming retailer. These wins helped narrow the company’s overall comps decline to 1.9%.
Management sees FUN 101 as a blueprint for broader renewal. CEO-designate Michael Fiddelke plans to extend this formula of style, trend and affordability to Home, Food & Beverage, and other categories, leveraging Target’s $31-billion owned-brand portfolio.
Sustaining the momentum, however, will be challenging. Trading cards and gaming consoles are cyclical, and tariff-related costs continue to pressure margins. Without fresh catalysts, the Hardlines lift may fade.
Still, Target is investing in AI-driven forecasting, faster supply-chain execution and improved inventory processes to keep assortments fresh and shelves stocked. If the FUN 101 strategy succeeds beyond Hardlines, it may ignite a broader merchandising turnaround and position Target for renewed growth in fiscal 2026.
Target’s Price Performance, Valuation & Estimates
The Target stock has lost 33.5% year to date against the industry’s growth of 5.1%. The company has underperformed key peers such as Dollar General Corporation (DG - Free Report) and Costco Wholesale Corporation (COST - Free Report) . During the same period, Dollar General and Costco’s shares have risen 37.7% and 5.6%, respectively.
Image Source: Zacks Investment Research
Target’s forward 12-month price-to-earnings ratio of 11.38 reflects a lower valuation than the industry’s average of 30.63. TGT carries a Value Score of A. Target is trading at a discount to Dollar General (with a forward 12-month P/E ratio of 16.26) and Costco (48.55).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for TGT’s fiscal 2025 earnings implies a year-over-year decline of 15.5%, while the same for fiscal 2026 indicates growth of 8.9%. Earnings estimates for fiscal 2025 have been southbound 5 cents per share and the same for fiscal 2026 has been upbound 3 cents in the past 30 days.
Image: Bigstock
Can Target Convert Hardlines' Momentum Into Company-Wide Success?
Key Takeaways
Target Corporation (TGT - Free Report) found a bright spot in the second quarter of fiscal 2025 with the revival of its Hardlines business. Through the “FUN 101” approach, the retailer is infusing electronics, toys and tech accessories with stronger style and cultural relevance, echoing the merchandising authority Target has long demonstrated in its apparel offerings. The effort delivered a 5% comparable-sales increase, the best Hardlines results since 2021.
Multiple trends fueled this gain. Trading card sales have surged nearly 70% year to date and are on track to exceed $1 billion in annual revenues. Tech accessories and value-priced toys also performed well, while the launch of the Nintendo Switch 2 positioned Target as a leading gaming retailer. These wins helped narrow the company’s overall comps decline to 1.9%.
Management sees FUN 101 as a blueprint for broader renewal. CEO-designate Michael Fiddelke plans to extend this formula of style, trend and affordability to Home, Food & Beverage, and other categories, leveraging Target’s $31-billion owned-brand portfolio.
Sustaining the momentum, however, will be challenging. Trading cards and gaming consoles are cyclical, and tariff-related costs continue to pressure margins. Without fresh catalysts, the Hardlines lift may fade.
Still, Target is investing in AI-driven forecasting, faster supply-chain execution and improved inventory processes to keep assortments fresh and shelves stocked. If the FUN 101 strategy succeeds beyond Hardlines, it may ignite a broader merchandising turnaround and position Target for renewed growth in fiscal 2026.
Target’s Price Performance, Valuation & Estimates
The Target stock has lost 33.5% year to date against the industry’s growth of 5.1%. The company has underperformed key peers such as Dollar General Corporation (DG - Free Report) and Costco Wholesale Corporation (COST - Free Report) . During the same period, Dollar General and Costco’s shares have risen 37.7% and 5.6%, respectively.
Image Source: Zacks Investment Research
Target’s forward 12-month price-to-earnings ratio of 11.38 reflects a lower valuation than the industry’s average of 30.63. TGT carries a Value Score of A. Target is trading at a discount to Dollar General (with a forward 12-month P/E ratio of 16.26) and Costco (48.55).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for TGT’s fiscal 2025 earnings implies a year-over-year decline of 15.5%, while the same for fiscal 2026 indicates growth of 8.9%. Earnings estimates for fiscal 2025 have been southbound 5 cents per share and the same for fiscal 2026 has been upbound 3 cents in the past 30 days.
Image Source: Zacks Investment Research
Target currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.