Target Corporation stock research
FY2025 Q4
Target (TGT) Gross Margin — Quarter Ended Jan 31, 2026
In the current quarter, revenue and cost of revenue both changed compared to the prior quarter, with gross profit increasing but gross margin declining. Relative to the same quarter last year, revenue was slightly lower while cost of revenue decreased more, resulting in unchanged gross profit and a modestly higher gross margin.
Gross margin takeaway
Quarter ended Jan 31, 2026 · FY2025 Q4
In the current quarter, revenue and cost of revenue both changed compared to the prior quarter, with gross profit increasing but gross margin declining. Relative to the same quarter last year, revenue was slightly lower while cost of revenue decreased more, resulting in unchanged gross profit and a modestly higher gross margin.
- The strongest observable margin driver is the shift in the relationship between cost of revenue and revenue. Compared to the prior quarter, cost of revenue increased at a greater rate than revenue, compressing gross margin; versus the year-ago quarter, cost of revenue declined more sharply than revenue, supporting margin improvement.
- Gross margin weakened sequentially from the prior quarter but improved compared to the same quarter last year. Revenue was higher than the previous quarter and lower than the year-ago quarter; gross profit was higher than the prior quarter and unchanged from a year ago; cost of revenue was higher than the prior quarter and lower than the year-ago quarter.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
26.6%
Gross profit
$8.1B
Revenue
$30.5B
Cost of revenue
$22.3B
Quarter-over-quarter change
-1.6 pts
Year-over-year change
+0.4 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 |
|---|---|---|---|---|
| May 3, 2025 | $23.8B | $6.7B | $17.1B | 28.2% |
| Aug 2, 2025 | $25.2B | $7.3B | $17.9B | 29.0% |
| Nov 1, 2025 | $25.3B | $7.1B | $18.1B | 28.2% |
| Jan 31, 2026 | $30.5B | $8.1B | $22.3B | 26.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Nov 1, 2025
-1.6 pts
Year-over-year change
Feb 1, 2025
+0.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the shift in the relationship between cost of revenue and revenue. Compared to the prior quarter, cost of revenue increased at a greater rate than revenue, compressing gross margin; versus the year-ago quarter, cost of revenue declined more sharply than revenue, supporting margin improvement.
Gross margin weakened sequentially from the prior quarter but improved compared to the same quarter last year. Revenue was higher than the previous quarter and lower than the year-ago quarter; gross profit was higher than the prior quarter and unchanged from a year ago; cost of revenue was higher than the prior quarter and lower than the year-ago quarter.
Monitor the company's ability to maintain brand differentiation and competitive positioning in the retail industry, as highlighted in the filing's discussion of competition and brand image.