Target shares climbed more than 3% in premarket trading after the retailer unveiled stronger-than-expected full-year guidance. The Minnesota-based company projects annual earnings per share between $7.50 and $8.50, exceeding Wall Street estimates, with net sales growth around 2% for 2026.

CEO Michael Fiddelke highlighted February's "healthy, positive sales increase" as an important milestone toward growth. Despite a deeper-than-expected 2.5% decline in fourth-quarter comparable sales, Target's $1.38 billion quarterly operating income beat projections. Sales trends accelerated during the crucial holiday shopping season.

The retailer's operating income margin is expected to improve by about 20 basis points to approximately 4.7% in 2026. Target has been revamping operations to attract shoppers amid cost-of-living pressures, with shares up 12% year-to-date despite a 6% decline over the past year.