Beauty remains one of Target Corporation’s TGT most dependable growth categories, fueled by fresh merchandise innovation and an elevated shopping experience. During the first quarter of fiscal 2026, net sales for the category climbed 9.6% year over year to $3,398 million. Management described beauty as one of the key pillars for Target, with the category delivering growth for 10 consecutive years.
The category has benefited from Target's emphasis on trend-right assortments, value-driven pricing and strong brand partnerships, reinforcing its position as a destination for beauty shoppers rather than simply another department within the store.
Target is preparing a broader transformation with the rollout of Target Beauty Studio across more than 600 stores later this year. The concept is designed to create a more immersive, discovery-focused environment while showcasing trending products and strengthening service levels. Management noted that beauty requires a premium shopping experience alongside premium brands, making store presentation and guest interaction as important as merchandise selection.
Operational improvements are also supporting the category. Target is testing new staffing and operating models intended to free up more time for team members to assist shoppers during peak periods. At the same time, better inventory availability in frequently purchased categories, such as beauty, is helping reduce friction for guests. Combined with continued assortment refreshes and investments in the in-store experience, beauty remains central to Target's merchandising strategy as the company works to deepen guest engagement and reinforce its position within the category.
What the Latest Metrics Say About Target
Target, which competes with Dollar General Corporation DG and Costco Wholesale Corporation COST, has seen its shares jump 18.1% over the past three months against the industry’s 0.2% decline. While shares of Dollar General have risen 1.4%, Costco has fallen 4.5% in the aforementioned period.
From a valuation standpoint, Target's forward 12-month price-to-earnings ratio stands at 16.38, lower than the industry’s ratio of 30.91. However, TGT is trading above its 12-month median level of 13.46.
Target is trading at a discount to Costco (with a forward 12-month P/E ratio of 43.11) but at a premium to Dollar General (15.71).
The Zacks Consensus Estimate for Target’s current financial-year sales and earnings per share implies year-over-year growth of 3.9% and 10.3%, respectively. For the next fiscal year, the consensus estimate indicates a 2.9% rise in sales and 6.4% growth in earnings.
The consensus estimate for earnings per share for the current and next fiscal year has increased by 2 cents and 3 cents to $8.35 and $8.89, respectively, over the past 30 days.
Target currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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