Target Expands Beauty Strategy With 600-Store Studio Rollout
Target Corporation TGT is leaning into its high-performing categories to maintain top-line growth, placing beauty at the forefront of its retail strategy. During the second quarter of fiscal 2026, the retailer experienced high single-digit net sales growth in its beauty segment. Building on this sustained momentum, Target is taking a bold step in its Beauty strategy with the Sept. 10 launch of Target Beauty Studio in more than 600 stores nationwide and on Target.com.
The new concept will feature more than 1,600 products from 90 prestige, emerging and global brands, with more than two-thirds of the featured brands new to Target. In the second quarter, Beauty net sales rose to $3,639 million from $3,396 million a year earlier. Management had also highlighted sustained guest response to Beauty investments made earlier in the year.
Target Beauty Studio takes that strategy beyond assortment expansion. The concept centers on discovery, combining dedicated Beauty Advisors with product testing, rotating features, exclusive Target Circle offers and a center table that showcases brands through storytelling and sampling. The assortment spans skincare, makeup, haircare, fragrance, bath and body, nails and other fast-evolving beauty segments.
The launch also adds a stronger prestige and global dimension through brands such as Sunday Riley, Briogeo, Rom&nd, Lake & Skye and Tan-Luxe. Target had previously described Beauty Studio as an elevated, immersive experience supported by dedicated advisers.
As one of seven core priority areas receiving disproportionate capital and operational resources, the beauty segment represents a key pillar in Target’s effort to drive relevance with busy families. The upcoming studio expansion marks the next chapter in Target’s multi-year effort to expand its merchandising authority in beauty.
How Does Target Stack Up Against Its Industry?
Target, which competes with Dollar General Corporation DG and Costco Wholesale Corporation COST, has seen its shares rally 31.9% over the past three months against the industry’s 2.2% decline. While shares of Dollar General have risen 26.4%, those of Costco have fallen 4.5% in the aforementioned period.
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What Does Target’s Current Valuation Suggest?
From a valuation standpoint, Target's forward 12-month price-to-earnings ratio stands at 16.77, lower than the industry’s 28.25. However, the stock is trading above its 12-month median level of 14.61.
Target is trading at a discount to Costco (with a forward 12-month P/E ratio of 45.42) but at a premium to Dollar General (16.75).
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What Do Earnings Estimates Signal for Target?
The Zacks Consensus Estimate for Target’s earnings per share for the current and next fiscal year has increased by $2.08 and 44 cents to $10.42 and $9.31, respectively, over the past 30 days.
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Target 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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This article originally published on Zacks Investment Research (zacks.com).
