Target traffic trends improve as merchandising reset gains momentum, says Jefferies
Published: 16:04 15 Jul 2026 EDT
Target Corp (NYSE:TGT) is seeing encouraging signs that its merchandising overhaul is helping attract shoppers, prompting Jefferies to modestly raise its second-quarter forecasts ahead of the retailer's earnings.
Jefferies wrote that Target's expanded product assortment, category refreshes and exclusive partnerships are increasingly becoming meaningful traffic drivers. The firm raised its second-quarter comparable sales estimate to 1.6% from 1.5% and increased its earnings per share forecast to $2.18.
The analysts pointed to a broad merchandising reset that has included a 30% expansion of Target's wellness section, the introduction of 3,000 beauty products and 60 new brands, a refresh of 75% of home decorative accessories, new food and beverage offerings, and a back-to-school assortment that is more than 50% new.
"In our view, this represents one of the broadest assortment refreshes TGT has undertaken in years," Jefferies wrote.
The firm believes these initiatives, along with collaborations and exclusive partnerships, are helping increase store traffic. Target reported first-quarter traffic growth of 4.4%, which Jefferies described as an early indication that the refreshed assortment is resonating with shoppers.
Looking ahead, the analysts acknowledged that Target faces a tougher year-over-year comparison in the second quarter as it laps the Nintendo Switch 2 launch. However, they wrote that recent foot traffic trends, combined with continued product launches, category resets and collaborations, suggest the company's merchandising strategy remains effective.
Jefferies also highlighted data from location analytics firm Placer.ai, noting a strong historical correlation between Target's foot traffic and comparable sales. Based on those trends, the firm now expects second-quarter comparable sales growth of 1.6%, compared with its Placer-based estimate of 1.7% and Wall Street's consensus forecast of 1.9%.
The analysts added that they expect Target to continue emphasizing merchandising through the second half of the year, supported by additional collaborations, new back-to-school products and the rollout of its Beauty Studio initiative.
Jefferies continues to view Target as one of its top investment ideas for 2026 following a recent meeting with the company's management team, where executives discussed early traction from the retailer's strategic reset and merchandising-led initiatives.
Shares of Target traded up 3% at about $138 on Wednesday afternoon, having added almost 41% so far this year.
