Target's quarterly earnings per share doubled after tariff refunds added 994 million dollars, while a Boston Fed study found that faster labour productivity offset most inflation impacts from the 2025 tariffs.
Target's net sales rose 5.3 per cent to 26.5 billion dollars, and comparable sales went up 3.8 per cent. With comparable traffic increasing 3.6 per cent during the quarter, store sales grew 2.7 per cent and digital sales expanded by 8.7 per cent. The company reported increases across all sales channels. For the full year the company expects sales growth of about 5 per cent and earnings per share of 9.90 dollars to 10.90 dollars.[1]
The retailer reported 2.6 billion dollars in operating income, with 3.7 points of its 9.6 per cent margin coming from tariff refunds. The refunds added 994 million dollars before tax and were worth 752 million dollars after tax. This lifted earnings per share to 4.11 dollars from 2.05 dollars a year earlier. Excluding them, earnings per share still rose 20 per cent. This shows the large impact of the refunds on the company's profitability margins.[1]
Researchers at the Boston Fed found that average realised tariffs rising from 2.5 per cent to 10 per cent added 1.1 percentage points to production costs in 2025. However, labour productivity gains cut unit costs by 1.3 percentage points, limiting the combined contribution of tariffs and productivity to core PCE inflation to 0.5 percentage points. The study added that industries most exposed to tariffs saw their labour share fall relative to others, which is where the offset shows up in the data.[2]
