Target Corporation operates as a general merchandise retailer in the United States. The company offers apparel for women, men, boys, girls, toddlers, and infants and newborns, as well as jewelry, accessories, and shoes; and beauty and personal care, baby gear, cleaning, paper products, and pet supplies. It also provides dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, and food service; electronics, which includes video game hardware and software, toys, entertainment, sporting goods, and luggage; and furniture, lighting, storage, kitchenware, small appliances, home decor, bed and bath, home improvement, school/office supplies, greeting cards and party supplies, and other seasonal merchandise. In addition, the company sells merchandise through periodic design and creative partnerships, and shop-in-shop experience; and in-store amenities. Further, it sells its products through its stores; and digital channels, including Target.com. Target Corporation was incorporated in 1902 and is headquartered in Minneapolis, Minnesota.

Target Corporation

With consumer trends rapidly changing and the retail sector under constant pressure to innovate, Target Corporation TGT and Build-A-Bear Workshop BBW have emerged as intriguing names for investors to watch. TGT is focused on revitalizing growth through technology investments, AI-driven efficiency and its Enterprise Acceleration strategy, while BBW is delivering record results through a capital-light, partner-operated expansion model and strong brand monetization.
As both navigate tariff pressures and shifting consumer demand, the key question for investors is: which company’s strategy will deliver stronger returns in the year ahead?
The Case for TGT
Target is making progress in navigating a challenging retail environment by leveraging its strong brand equity, diverse product assortment and operational discipline. Its digital performance remains a key growth driver, with comparable online sales rising 4.3% year over year in the second quarter of fiscal 2025. Same-day delivery through Target Circle 360 jumped more than 25%, underscoring how digital convenience and membership benefits are enhancing customer loyalty.
The company’s profitable digital ecosystem also supports higher-margin ventures, such as Roundel and Target Plus, both of which continue to expand. In the second quarter, Target deployed more than 10,000 AI licenses to enhance forecasting accuracy, automate manual processes and improve replenishment. These advancements contributed to the company’s best on-shelf availability in years and bolstered the reliability of its digital fulfillment operations.
Merchandising efforts are gaining traction as well. The newly introduced FUN 101 strategy infused cultural relevance and innovation into hardlines, driving more than 5% year over year category growth in the second quarter — the strongest performance since 2021. Trading cards, tech accessories and the Nintendo Switch 2 were notable standouts, while apparel and food and beverage benefited from trend-right and fresh assortments.
However, overall sales still reflected macroeconomic headwinds. Net sales declined 0.9% year over year, while comparable sales fell 1.9%. Adjusted EPS dropped to $2.05 from $2.57 due to tariff-related costs and inventory adjustments. These pressures highlight the need for sustained execution and continued agility as Target works to regain consistent, profitable growth in the coming quarters.
Target is taking bold steps in response to mounting competitive pressures. According to CNBC, the retailer announced plans to eliminate 1,800 corporate positions, a move that includes 1,000 layoffs and the removal of 800 roles, representing about 8% of its global workforce. The retailer aims to streamline decision-making, create a leaner operating structure and fast-track critical projects to rebuild customer loyalty.
The Case for BBW
Build-A-Bear’s strength lies in its transformation from a mall-based retailer into a diversified, brand-driven omnichannel company. Its second-quarter fiscal 2025 results marked the most profitable period in its history, with revenues rallying 11.1% year over year to $124.2 million, pretax income rising 32.7% and earnings jumping 46.9% to 94 cents per share. These record figures reflect an evolving business model that balances innovation with disciplined execution and efficient cost management.
A key driver of this success is Build-A-Bear’s capital-light, partner-operated expansion model. Fourteen experience locations were opened in the quarter, of which 86% were international, expanding the brand to 32 countries across North America, South America, Europe, Australia, Asia and Africa. Partner-operated stores now represent about a quarter of the total network, enabling rapid global scaling without heavy capital investment. This model enhances profitability through wholesale and royalty streams while diversifying revenue sources.
Innovation and consumer engagement have also fueled the company’s growth. The Mini Beans collection, introduced in 2024, surged sales 80% year over year and attracted young consumers and adult collectors. Seasonal campaigns, such as the Fruit Stand assortment and Halloween-themed launches, have strengthened digital visibility and driven record engagement. E-commerce demand grew 15.1%, supported by strong consumer response to key product launches.
However, the company continues to face challenges from tariff exposure and rising costs. Management expects tariff-related headwinds and higher labor expenses to total $16 million in fiscal 2025. While tariffs on imports from China and Vietnam and elevated labor costs pose potential cost pressures, Build-A-Bear has maintained strong margins through selective pricing actions, sourcing flexibility and disciplined expense management. Nonetheless, prolonged cost inflation may weigh on profitability if not offset through continued operational efficiencies.
Elevated SG&A expenses and higher inventory levels also present ongoing risks. Operating expenses increased 140 basis points to 45.4% of revenues, driven by wage inflation and higher store-level costs, while inventory rose 22% year over year to $81.8 million.
How Does the Zacks Consensus Estimate Compare for TGT & BBW?
The Zacks Consensus Estimate for Target’s current fiscal-year sales and EPS implies year-over-year declines of 1.4% and 16.3%, respectively. The consensus estimate for EPS for the current fiscal year has declined 3 cents to $7.42 over the past 30 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Build-A-Bear’s current fiscal-year sales and EPS suggests year-over-year increases of 7.4% and 6.9%, respectively. The consensus estimate for EPS for the current fiscal year has been unchanged at $4.03 over the past 30 days.
Image Source: Zacks Investment Research
Stock Performances of TGT & BBW
Over the past month, shares of Target have gained 10.1%, while Build-A-Bear has slumped 21.5%. Target’s advance reflects investor confidence in its improving digital performance, operational efficiency and merchandising gains. In contrast, Build-A-Bear’s decline stems from rising costs, tariff-related pressure and higher inventory levels that have dampened sentiment despite strong recent results.
Image Source: Zacks Investment Research
Dive Into Stock Valuations of TGT & BBW
Target is trading at a forward price-to-sales (P/S) multiple of 0.42, below its median of 0.59 in the last three years. Build-A-Bear’s forward 12-month P/S multiple sits at 1.34, above its median of 0.79 in the last three years. We note that Build-A-Bear appears to be pricier than Target in terms of their current P/S ratios.
Image Source: Zacks Investment Research
TGT or BBW: Which Is the Better Bet Now?
Target stands out as the stronger investment candidate, supported by improving digital momentum, AI-driven operational efficiency, and disciplined inventory and cost management. Its focus on technology integration, expanding fulfillment capabilities and merchandising innovation provides a solid foundation for sustained recovery and long-term growth. The stock’s attractive valuation relative to historical levels further strengthens its investment appeal.
While Build-A-Bear continues to deliver record profitability and expand through its capital-light, partner-operated model, rising tariff exposure, higher labor costs and elevated inventory levels pose near-term risks. In the current environment, Target’s operational resilience, scale advantages and clearer path to consistent growth make it the better option to hold.
Both Target and Build-A-Bear currently carry 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Target vs. Build-A-Bear: Which Retail Stock Offers More Upside?

Key Points
Costco’s membership fees essentially cover all operating expenses, giving it pricing power competitors can’t match.
Renewal rates above 90% underpinned by a loyalty flywheel that's next to impossible to replicate.
Even at a premium valuation, Costco’s steady double-digit growth and fortress-like business model justify the price.
Costco (NASDAQ: COST) isn't just a retailer -- it's a phenomenon. From $1.50 hot dogs to cavernous warehouses and famously cheap rotisserie chickens, Costco has built an almost cult-like following in North America.
The company's unique business model has allowed it to thrive in an industry known for razor-thin margins and price-sensitive shoppers.
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Membership first, margin later
Costco's real secret weapon isn't on the shelves. The firepower lies in its membership model.
Customers pay $65 annually for a basic membership or $130 for an executive membership , which comes with extra rewards. As of the last quarter, the company had more than 81 million paid memberships -- driving $5.3 billion of revenue in the fiscal year (ending on August 31, 2025).
Membership revenue isn't just a nice bonus. It covers about one-fifth of overhead expenses, allowing the company to sell products at lower gross margins on a unit-basis.
That's why shoppers can consistently find prices that competitors can't match, and why Costco doesn't rely on high markups to generate profits.
An irreplaceable loyalty engine
Memberships are not only plentiful and growing, but they are sticky too.
Costco's renewal rates are extraordinary. Around 90% of members renew every year globally , and the rate is even higher in the U.S. This creates a virtuous cycle:
Low prices bring in shoppers.
Shoppers are happy and renew their memberships.
Renewals give Costco scale.
Scale allows for even lower prices.
Rinse and repeat.
Once customers are in the Costco ecosystem, they tend to stay. It's difficult for competitors to replicate this flywheel because it's built on decades of trust, scale, and consistent execution, not flashy marketing.
A long runway for growth
Even though Costco already operates 890 warehouses worldwide, it's not slowing down. Management expects to increase that number to 914 by the end of fiscal 2025 and to 944 by fiscal 2026 (six percent growth).
This disciplined expansion strategy focuses on high-return locations rather than aggressive, margin-eroding growth.
Strong financial foundation
Costco's financial results reflect its steady, reliable model. Last year, the company generated $275 billion in revenue (+8% y/y) and $8.1 billion in net income (+10% y/y), while producing $7.8 billion in operating free cash flow . Return on invested capital is a robust +20%, and has been steadily increasing; showing that the company doesn't just grow--it grows efficiently.
Again, the $5.3 billion membership fees last year are almost pure profit and are what make Costco's thin-margin retail operations sustainable, turning what would be a low-margin store model into a cash machine.
Valuation reflects its quality
The stock trades at about 46× forward earnings , which is expensive compared to most retailers, like Walmart (NYSE: WMT) at 34x, BJ's Wholesale Club (NYSE: BJ) at 19x and Target (NYSE: TGT) at just 11x.
But Costco has earned that premium. Earnings have grown at an average of +10% for years , and the company's high renewal rates and expansion plans make that growth stronger more predictable than most in the sector. For example, Target has seen its revenues flat-line and earnings trend down in the last three years.
Over the past decade, Costco's stock has appreciated more than 500% , rewarding long-term investors handsomely.
If the company keeps executing, there's no issue with it continuing to grow earnings into its valuation. At a 10% earnings growth rate, the P/E goes from 46x to 29x within five years.
Risks and resilience
A pullback in consumer spending is always a risk in retail, but Costco tends to shine when times get tough. Shoppers often trade down to its bulk bargains, keeping sales steady even when others struggle.
That said, inflation and currency swings can pressure margins, especially if Costco holds prices low to protect its value reputation.
Costco's model is rooted in its consistency. Membership fees make up most of its profit, giving it a steady income stream that cushions against volatility. It's a simple formula -- low prices, loyal members, and reliable recurring revenue -- but it's proven to work in good times and bad.
However, in my mind the sharpest risk stems from the company's reliance on membership revenues. While renewal rates hover above 90%, a prolonged slowdown could deal a double whammy of less membership fee revenue and fewer physical sales.
This doesn't seem to be showing any sign of slowing anytime soon though.
The Foolish bottom line
Costco has built a retail fortress powered by membership loyalty and unmatched value. Its model flips the traditional retail profit equation: instead of squeezing margins on goods, it wins with recurring membership revenue.
For long-term investors, Costco offers a rare mix of growth, resilience, and customer devotion that few competitors can match.
In a world where most retailers fight for thin margins and fleeting traffic, Costco's unique and cult-like membership model, relentless focus on value and enormous scale have poured the foundation for a sustainable competitive advantage for years to come.
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The Motley Fool has positions in and recommends Costco Wholesale, Target, and Walmart. The Motley Fool has a disclosure policy.
Justin Ho does not own any positions in the mentioned stocks.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

How a $5 Rotisserie Chicken and a $65 Membership Are Powering an Unstoppable Retail Juggernaut

Key Points
Dividend stocks have historically outperformed non-dividend paying stocks.
Sonoco Products has radically reshaped its business to focus on its core.
Target significantly improved its digital presence during the COVID-19 pandemic.
Investing in dividend stocks is one of the most popular and powerful strategies for generating a steady income stream, building wealth through the power of compounding and mitigating portfolio risk with historically more stable and resilient businesses. With all of that said, here are two excellent dividend stocks with yields topping 5%.
Better packaging. Better investment.
With a motto of "Better Packaging. Better Life." it seems fitting that Sonoco Products (NYSE: SON) might be the total package for income investors. Not only does it have a high-yield dividend at 5.4%, the company has delivered dividends to shareholders for 402 consecutive quarters, or for 100 years, and has increased its dividend for 42 consecutive years.
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Throughout its 100-year history, Sonoco has collected a diverse portfolio of industrial and consumer packaging that includes reels and spools, rigid plastics, pallets, and composite containers, and serves consumer and industrial end markets across North America. Sonoco has two primary segments, consumer packaging and industrial packaging, and has reshaped its business over the past few years. The company now focuses more on a few core businesses and has divested from products such as high-density film and European contract packing, among others.
Further, the company has been busy expanding its food packaging portfolio while reducing its exposure to more cyclical industrial end markets with acquisitions. In 2022 Sonoco acquired Ball Metalpack for about $1.4 billion, and then in 2024 acquired Eviosys for roughly $3.9 billion. Both acquisitions will increase the company's exposure to the valuable metal food packaging industry. Another positive for income investors is that much of the company's sales are under contracts that include price escalators and help stabilize margins and indirectly drive dividends.
Competing digitally
Target (NYSE: TGT), serving as the nation's seventh-largest retailer, has built itself on a strategy to deliver a more gratifying in-store shopping experience with a wide range of apparel, home goods, and other household essentials that appeals to a more affluent customer base. What some investors aren't aware of, however, is the company's long history with dividends: This year's fourth quarter dividend will be Target's 233rd consecutive dividend paid since 1967 when it went public. The dividend also sits at a robust 5.1% dividend yield.
One reason for investors to be optimistic about Target's future is its recent past. One of the largest concerns facing investors has been Target's ability to combat digital retailers such as Amazon and omnichannel giants like Walmart. Target's investments in its stores and its digital prowess proved hugely important during the pandemic, helping power the company's sales from 2019 through 2022, as you can see in the chart below.
Target will have to keep investing in cost-saving initiatives, product innovation, and store renovations to keep up with the competition, both in-store and online. But its performance during the pandemic proves the company is capable of driving growth and its iconic brand combined with a better in-store experience should continue driving recurring foot traffic.
What they offer
Both Sonoco and Target are excellent options for income investors. They both offer a long, consistent history of delivering dividends, and both are finding ways to expand through acquisitions or organic and digital growth.
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Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Target, and Walmart. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

2 High-Yield Dividend Stocks to Buy With No Hesitation

Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume today in Target Corp (Symbol: TGT), where a total of 41,255 contracts have traded so far, representing approximately 4.1 million underlying shares. That amounts to about 52.8% of TGT's average daily trading volume over the past month of 7.8 million shares. Especially high volume was seen for the $100 strike call option expiring October 31, 2025, with 2,021 contracts trading so far today, representing approximately 202,100 underlying shares of TGT. Below is a chart showing TGT's trailing twelve month trading history, with the $100 strike highlighted in orange:
Cadence Design Systems Inc (Symbol: CDNS) saw options trading volume of 7,747 contracts, representing approximately 774,700 underlying shares or approximately 52.3% of CDNS's average daily trading volume over the past month, of 1.5 million shares. Particularly high volume was seen for the $420 strike call option expiring October 31, 2025, with 1,135 contracts trading so far today, representing approximately 113,500 underlying shares of CDNS. Below is a chart showing CDNS's trailing twelve month trading history, with the $420 strike highlighted in orange:
And Micron Technology Inc. (Symbol: MU) saw options trading volume of 131,655 contracts, representing approximately 13.2 million underlying shares or approximately 52.2% of MU's average daily trading volume over the past month, of 25.2 million shares. Particularly high volume was seen for the $190 strike put option expiring October 31, 2025, with 7,050 contracts trading so far today, representing approximately 705,000 underlying shares of MU. Below is a chart showing MU's trailing twelve month trading history, with the $190 strike highlighted in orange:
For the various different available expirations for TGT options, CDNS options, or MU options, visit StockOptionsChannel.com.
Also see:
IWY Average Annual Return
TGAN Stock Predictions
SRLP market cap history
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Noteworthy Monday Option Activity: TGT, CDNS, MU

Build-A-Bear Workshop, Inc.’s BBW asset-light strategy is emerging as a key driver of its growth momentum. The company’s partner-operated retail model is enabling rapid international expansion without the heavy capital burden of corporate ownership. In the second quarter of fiscal 2025, Build-A-Bear added 14 net new global experience locations, of which nine were partner-operated. These stores now account for roughly 25% of the total location base.
CEO Sharon Price John emphasized that this model allows the brand to scale efficiently while leveraging partners’ local knowledge and operational capabilities. The company’s expansion to 32 countries demonstrates how the approach accelerates market penetration with minimal incremental investment. Partners such as Great Wolf Lodge and Girl Scouts in the United States, and international operators in emerging markets like Georgia and Uzbekistan, highlight the effectiveness of this framework.
The benefits are visible across several metrics. For the first half of fiscal 2025, Build-A-Bear’s EBITDA margin rate of nearly 17% had more than tripled the rate achieved in the first half of fiscal 2019. Pre-tax income surged 32.7% in the second quarter to a record $15.3 million, while the gross margin expanded 340 basis points to 57.6%.
The model also extends to wholesale distribution, with partner-operated toy stores driving additional sales of Build-A-Bear’s Mini Beans collection. By outsourcing capital-intensive retail buildouts, Build-A-Bear converts fixed costs into variable ones, strengthening margins and cash flow. The model’s scalability supports long-term brand growth and profitability, reinforcing its role as a sustainable engine of expansion.
What the Latest Metrics Say About Build-A-Bear
Build-A-Bear, which competes with Walmart Inc. WMT and Target Corporation TGT, has surged 43.2% over the past year, outperforming the industry’s growth of 10%. While Walmart shares have rallied 28.3%, Target has declined 36.9% in the aforementioned period.
Image Source: Zacks Investment Research
From a valuation standpoint, Build-A-Bear's forward 12-month price-to-earnings ratio stands at 12.81, lower than the industry’s ratio of 17.97. BBW carries a Value Score of A. Build-A-Bear is trading at a discount to Walmart (with a forward 12-month P/E ratio of 37.36) but at a premium to Target (11.90).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Build-A-Bear's current financial-year sales and earnings per share implies year-over-year growth of 7.4% and 6.9%, respectively.
Image Source: Zacks Investment Research
Build-A-Bear currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Is Build-A-Bear's Asset-Light Model the Key to Sustainable Growth?

Key Points
Quarterly dividend income can help soothe the pain of sharp drops in the stock market.
Constellation Brands, Hershey, and Target have profitable businesses supporting dividend payments to shareholders.
While these companies are facing near-term problems, their high dividend yields are backed by earnings.
There's nothing like receiving regular cash deposits in your brokerage account when market volatility ramps up, and there are top consumer brands offering attractive yields now. If you're looking to boost your passive income, here are three top consumer brands that offer yields ranging from 2.91% to 4.89%.
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1. Constellation Brands: Forward dividend yield of 2.91%
Shares of Constellation Brands (NYSE: STZ) have dropped 49% from recent highs over macroeconomic headwinds. People have been consuming beer for thousands of years, and that's not going to stop. This makes the dip a great buying opportunity.
Constellation owns several top Mexican beer imports. Modelo and Corona are two of the best-selling brands in the U.S., but its new Corona Sunbrew has quickly become the No. 1 new beer brand in the U.S.
Full-year adjusted sales will be down by single-digit percentages, but for income investors, the dividend is safe. The quarterly payout of $1.02 is well supported by estimated full-year adjusted earnings of $11.51, according to Yahoo! Finance. This makes the forward dividend yield of 2.91% very attractive.
2. Hershey: Forward dividend yield of 2.97%
Hershey (NYSE: HSY) is another top consumer brand that is getting hit hard by temporary headwinds. In this case, record cocoa prices and poor harvests have raised costs, sending the stock down 33% from its previous high. The lower share price has brought the yield up, making the dip a good buying opportunity.
People tend to gravitate to recognizable brands, which has served Hershey well for over a century. Top brands like Reese's and Hershey contribute to an $11 billion snack powerhouse. In second-quarter 2025, the company posted stronger sales, leading to share gains in the U.S. candy, mint, and gum market.
Hershey has paid a dividend for 95 years, which says a lot about the company's financial stability and resiliency. Despite the recent supply chain disruptions, the quarterly dividend payment of $1.37 is supported by expected full-year adjusted earnings of $5.49, with forecasts calling for earnings to rebound to $6.80 in 2026. This is a rare opportunity to buy this iconic chocolate brand at a high forward yield of 2.97%.
3. Target: Forward dividend yield of 4.89%
Tariffs and weak sales trends have sent Target (NYSE: TGT) shares down 65% from their previous high. This is an elite dividend payer that has paid a dividend every year since 1967. Target currently offers the highest yield among the three companies featured here, while paying out only about half its earnings.
The weak sales environment, which sent Target's sales down 1% last quarter, should prove to be a temporary hurdle. Target has navigated numerous economic cycles, including the Great Depression in the 1930s, and is still generating solid earnings in 2025.
At the quarterly payout of $1.14, the forward dividend yield is currently 4.89%, supported by expected full-year earnings of $7.34. This has been a resilient retail business for over a century, which speaks to Target's exceptional inventory management and ability to generate steady sales and profits to fund the dividend.
Should you invest $1,000 in Constellation Brands right now?
Before you buy stock in Constellation Brands, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Constellation Brands wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $590,357!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,141,748!*
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John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Hershey and Target. The Motley Fool recommends Constellation Brands. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 High-Yield Dividend Stocks Down 33% to 65% to Buy Right Now

(RTTNews) - Retail giant Target Corp. (TGT) is planning to lay off approximately 1,800 corporate employees or 8 percent of its corporate staff, as part of the incoming CEO Michael Fiddelke's move to improve operational efficiency and boost stagnant sales.
The layoffs were announced by Fiddelke in a memo to employees. Currently chief operating officer, Fiddelke is set to take over as CEO in February 2026. He previously served as chief financial officer also. He joined Target in 2003 as an intern.
The move, the first major layoff in a decade, will primarily affect "non-field roles" at the company's Minneapolis headquarters. These include the elimination of about 800 vacant positions. It will not affect roles in the store or supply chain.
Fiddelke said, "Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life." He asked all U.S. HQ team members to work from home next week as the changes are made from Tuesday.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Target To Cut 1,800 Jobs, Including Elimination Of 800 Vacant Positions

Target Corporation TGT is taking bold steps in response to mounting competitive pressures. According to CNBC, the retailer announced plans to eliminate about 1,800 corporate positions, a move that includes 1,000 layoffs and the removal of roughly 800 roles, representing about 8% of its global workforce. The decision, revealed in a memo from incoming CEO Michael Fiddelke, underscores the company’s urgency to revive growth.
The Minneapolis-based retailer aims to streamline decision-making, create a leaner operating structure and prioritize critical projects to rebuild customer loyalty. The timing of the layoffs, just before the holiday shopping season, signals Target’s push to fast-track its turnaround and strengthen competitiveness ahead of the busiest retail period.
For a brand long known for affordable style and convenient shopping, Target’s recent performance signals operational challenges. Despite past investments in supply-chain improvements and owned-brand development, TGT has yet to regain steady sales growth. The company has struggled to maintain momentum in an increasingly competitive retail landscape, where Walmart Inc. WMT and Amazon.com, Inc. AMZN have continued to expand their market share through pricing power, logistics efficiency and digital reach.
Target experienced a decline of 1.9% in comparable sales during the second quarter, following a 3.8% drop in the first quarter. Target had guided a low-single-digit decline in sales for fiscal 2025. We anticipate comparable sales to decrease 1.4% and 1.3% in the third and fourth quarters, respectively.
While short-term hiccups are inevitable, Target looks focused on getting back on a growth path. The real test will be whether these workforce reductions translate into faster execution, sharper merchandising and renewed customer engagement.
What the Latest Metrics Say About TGT
Target has seen its shares decline 37.6% in the past year against the industry’s growth of 7.8%. On the other hand, shares of Walmart and Amazon have rallied 29.5% and 17.3%, respectively, in the aforementioned period.
Image Source: Zacks Investment Research
From a valuation standpoint, Target's forward 12-month price-to-earnings ratio stands at 11.91, lower than the industry’s ratio of 30.26. TGT carries a Value Score of A. Target is trading at a discount to Amazon (with a forward 12-month P/E ratio of 29.45) and Walmart (37.64).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Target’s current financial-year sales and earnings per share implies a year-over-year decline of 1.4% and 16.3%, respectively.
Image Source: Zacks Investment Research
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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Target Restructures Workforce: Will the Bold Move Pay Off?

Key Points
McDonald's has grown its dividend so prodigiously since 1976 that anyone investing $1,000 then would now be collecting nearly $500,000 in dividends per year.
It just announced another 5% dividend increase, which marks 49 years of annual dividend increases.
By this time next year, McDonald's will likely hit "Dividend King" status with 50 years of dividend hikes.
In 1976, fast-food giant McDonald's (NYSE: MCD) issued a dividend of $0.025 per share, after its chairman, Ray Kroc, announced a 27% jump in profits for the first quarter.
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Because of the seven stock splits and 49 annual dividend hikes since, McDonald's dividend has grown from a split-adjusted payout of $0.0006 per share to $1.86 per share today. That's a 310,000% increase, and it means that anyone who invested $1,000 in McDonald's in 1976 would be receiving almost $500,000 a year in dividends today.
These gains are, alas, in the past. But McDonald's has raised its dividends at a respectable rate in recent years, too. As you can see below, its dividend growth has generally outpaced the inflation rate this decade, sometimes handily so.
McDonald's Dividend Hikes
Year
Inflation Rate
Dividend Growth
McDonald's 5% dividend increase for 2025, announced on Wednesday, is its 49th dividend increase since 1976. That means that this time next year, it may have raised dividends 50 times in 50 years, giving it "Dividend King" status.
Dividend Kings are extremely rare. Of the 53,800 publicly traded companies worldwide last year, only 56 had earned that distinction, so barely one in 1,000 stocks made the cut. Examples include global retailer Target, tobacco giant Altria, and soft drink icon Coca-Cola.
How big might McDonald's historic dividend hike for 2026 be? Recent history and some fundamentals offer clues.
Three clues on McDonald's 50th dividend hike
One of the best indicators of a company's ability to increase dividends is the payout ratio, or the percentage of net income it delivers to shareholders as dividends. The lower the payout ratio, the more easily a company can raise payouts.
As you can see below, McDonald's payout ratio has trended lower over the last five years, albeit not in a steady decrease. This is good news for investors and makes sense when you consider that net income has nearly doubled from $4.7 billion in 2020 to $8.2 billion in 2024, outpacing McDonald's dividend growth of 37% in that timeframe.
Another indicator that bodes well for a healthy dividend hike is robust earnings growth. McDonald's grew quarterly earnings by 11.4% year over year last quarter, which makes a similarly healthy dividend increase easy to envision.
Third, if a company is growing its operating margins, it's a strong sign that it's efficient and profitable enough to continue rewarding shareholders. Operating margin is the percentage of revenue that's available to cover non-operational expenses, such as interest on debt, share buybacks, or dividends, so it provides insight into how sustainable a company's payouts are.
In McDonald's case, operating margin is a healthy 47.7%. For context, Coca-Cola, an official Dividend King, has an operating margin of 34.7%. The historical average operating margin for S&P 500 companies is 10.8%, so the number for McDonald's indicates a truly special company.
There's also a bonus reason to feel confident that McDonald's can keep up its dividend hot streak.
Share buybacks provide breathing room
The company spent $2.8 billion on share buybacks in 2024, after spending $5.3 billion on buybacks in 2023. McDonald's habit of buying back shares, which is shareholder-friendly because it increases earnings per share, also makes its dividend more sustainable, as it means the company owes payouts on a smaller number of shares. It also means that, should the company come under pressure in the years ahead, it can dip into the billions of dollars earmarked for share buybacks rather than sacrifice its hard-won status as a dividend powerhouse.
No one can know what the next half-century will bring to McDonald's. But for the near term, the company is well-positioned to join the Dividend King club in 2026 and continue growing payouts for years after that. Because its current 2.3% dividend yield is nearly double the S&P 500 average, this could mean a very powerful income stream down the road for investors who act now.
Should you invest $1,000 in McDonald's right now?
Before you buy stock in McDonald's, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and McDonald's wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $602,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,105,092!*
Now, it’s worth noting Stock Advisor’s total average return is 1,028% — a market-crushing outperformance compared to 190% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
*Stock Advisor returns as of October 20, 2025
William Dahl has no position in McDonald's, Target, or Altria. William Dahl owns shares of Coca-Cola. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

McDonald's Could Reach a Milestone Next Year That Barely 1 in 1,000 Companies Achieve: Are Shares a Buy?

Key Points
Conagra Brands sports a 7.5% forward dividend, and could stage a major comeback as the macro situation improves and a company turnaround takes shape.
Investors may be critical of Keurig Dr. Pepper's latest acquisition plans, but the market's negative overreaction could work to your advantage.
Target is once again the subject of buyout rumors, but shares still have major upside, even if the big box retailer ends up staying a public company.
So far, issues ranging from trade war concerns, the U.S. federal government shutdown, and the Federal Reserve's next moves with interest rates have all weighed on the performance of the broad market, consumer goods stocks included.
However, while uncertainty still runs high, there are plenty of consumer stocks that are now oversold. Investors have overreacted to negative macro and company-specific news.
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While some of these oversold consumer stocks could become value traps, there are plenty that could bounce back in a big way, as the companies make improvements and as subsequent results prove better than feared.
The following three consumer goods stocks fall firmly in that category.
1. Conagra Brands pays you while you wait for the turnaround
Conagra Brands (NYSE: CAG) is a packaged foods company, best known for its brands like Duncan Hines, Healthy Choice, and Slim Jim. Like many of its publicly traded competitors, negative sentiment has placed pressure on shares. Blame this on concerns such as inflationary pressures, low growth, and high debt.
But Conagra, at a forward price-to-earnings (P/E) ratio of 10.9, trades a discount to many of these peers, including General Mills, which trades at a forward P/E of 13.8.
In time, Conagra's turnaround efforts like asset sales could lower debt and boost profits, which in turn could narrow the valuation gap. While waiting for a rebound, you can earn a steady return, from the stock's 7.5% forward dividend yield.
2. Concerns about Keurig Dr. Pepper's latest acquisition may be overblown
Keurig Dr. Pepper (NASDAQ: KDP) is another consumer goods stock under pressure due to negative market sentiment. However, in the case of this beverage giant, key concerns are company-specific. That is, investors aren't liking Keurig Dr. Pepper's plans to buy coffee giant JDE Peet's for $18 billion, then split into two independent companies.
However, this complex transaction could both unlock and create value. Trading for less than 12 times forward earnings, Keurig Dr. Pepper sells at a discount to beverage industry peers, mostly on uncertainty regarding coffee commodity prices.
Split into two, though, the soft drink segment could rerate to a forward multiple of 15 to 20, on par with Coca-Cola and Pepsico. The coffee business will likely sport a lower valuation, but this could still result in a net gain for investors prior to the split-up. The JDE Peet's deal could also produce $400 million in cost synergies, creating further value for investors.
3. Target could rebound in a big way, even if a takeover bid fails to emerge
Recently, I have discussed how retailer Target (NYSE: TGT) has been the subject of private equity takeover rumors yet again. I wouldn't buy Target for this reason, but there is another strong reason to buy it.
Why? There's high upside potential, just from Target staying independent and successfully executing a turnaround. Moving forward, lower interest rates could help ease issues like weak consumer demand. At the same time, efforts to improve the customer experience could also enhance profitability.
In turn, the stock could surge on both earnings growth as well as valuation expansion. In the meantime, you can collect a 5% annual yield from this Dividend King. Target's dividend has increased 56 years in a row.
Should you invest $1,000 in Conagra Brands right now?
Before you buy stock in Conagra Brands, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Conagra Brands wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,449!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,110,486!*
Now, it’s worth noting Stock Advisor’s total average return is 1,076% — a market-crushing outperformance compared to 191% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
*Stock Advisor returns as of October 20, 2025
Thomas Niel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Indicator	TTM Median
P/E	11.07 20.90
Price/Sales	0.43 0.83
P/B	3.05 1.82
P/FCF	10.12 19.11

Indicator	TTM Median
ROE	28.50 13.30
ROA	7.20 5.85
ROI	14.45 9.19
Net Worth	45.31 1.38
Quick Ratio	0.32 0.86
Current Ratio	0.94 1.37

Indicator	TTM Median
Net Profit Margin	3.84 5.78
Operating Margin	5.22 9.26
Gross Margin	28.21 34.60
Return on tangible equity	28.50 24.12

Indicator	TTM Median
EPS	1.30 0.51
EPS Forecast	1.62 0.41
Revenue	30.92B 141.00M
Gross Profit	8.04B —
EBITDA	2.23B —

Target Corporation

TTM metrics for the latest quarter under IFRS and their historical dynamics

Valuation

Debts

Efficiency

Other ratios

Revenue