Target Corporation stock research
FY2025 Q2
Target (TGT) Gross Margin — Quarter Ended Aug 2, 2025
Revenue increased from the prior quarter, and gross profit rose more than proportionally, resulting in a higher gross margin. Compared with the same quarter last year, revenue was lower while cost of revenue was slightly higher, leading to a lower gross profit and a weakened gross margin.
Gross margin takeaway
Quarter ended Aug 2, 2025 · FY2025 Q2
Revenue increased from the prior quarter, and gross profit rose more than proportionally, resulting in a higher gross margin. Compared with the same quarter last year, revenue was lower while cost of revenue was slightly higher, leading to a lower gross profit and a weakened gross margin.
- The gross margin improved sequentially because revenue grew faster than cost of revenue. However, the year-over-year decline reflects that revenue contracted while cost of revenue expanded.
- Sequentially, the gross margin was higher, supported by a larger increase in revenue relative to cost of revenue. Year-over-year, the gross margin was lower, as revenue decreased and cost of revenue increased.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
29.0%
Gross profit
$7.3B
Revenue
$25.2B
Cost of revenue
$17.9B
Quarter-over-quarter change
+0.8 pts
Year-over-year change
-1.0 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Nov 2, 2024 | $25.7B | $7.3B | $18.4B | 28.3% |
| Feb 1, 2025 | $30.9B | $8.1B | $22.8B | 26.2% |
| May 3, 2025 | $23.8B | $6.7B | $17.1B | 28.2% |
| Aug 2, 2025 | $25.2B | $7.3B | $17.9B | 29.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
May 3, 2025
+0.8 pts
Year-over-year change
Aug 3, 2024
-1.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin improved sequentially because revenue grew faster than cost of revenue. However, the year-over-year decline reflects that revenue contracted while cost of revenue expanded.
Sequentially, the gross margin was higher, supported by a larger increase in revenue relative to cost of revenue. Year-over-year, the gross margin was lower, as revenue decreased and cost of revenue increased.
Monitor the trend of cost of revenue relative to revenue, as it directly influences gross margin direction.