US department store chains are steadily becoming the go-to place to shop for beauty, as both Walmart and Target’s Q1 2026 sales were driven by bumper demand for cosmetics.
The two companies, which are among America’s largest retail corporations, have been heavily investing in their beauty offerings over the past year, which shows in their latest financials.
Overall sales for Target during the quarter were driven by a robust beauty performance, increasing to $3.39bn, up from $3.1bn in 2025.
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In March, Target unveiled its upcoming Beauty Studios, set to open in autumn this year and described as an immersive destination that pairs “speciality-level” presentation and service with accessibility.
This forms part of an overall upgrade to Target’s beauty offering, focused on premium and emerging brands, updating presentation and piloting an enhanced service model.
Walmart, meanwhile, has reported a strong first quarter of trading in Q1, with revenues increasing 7.3% to $177.8bn.
It has created a pilot scheme centred on the new Beauty Expert role, which aims to empower staff to provide professional guidance and better serve beauty shoppers.
The scheme was initially trialled in a select few stores, and will be rolled out across Walmart’s entire portfolio by the end of 2026 – sitting within the retailer’s wider Beauty 2.0 initiative.
This aims to revamp stores so that the beauty departments are more prominent for consumers, alongside key areas highlighting popular products on social media.
However, the focus on beauty follows Target reporting fluctuating financial results and Walmart being impacted by the ongoing conflict in the Middle East.
Target’s Beauty Studios were launched alongside a wider turnaround strategy to return to growth following a slump in quarterly sales.
It includes plans to refresh the store experience, invest in store payroll and training to elevate the guest experience, and strengthen key areas of the assortment.
For Walmart, the war in Iran and the subsequent impact on global fuel prices have raised concerns about pressure on household budgets.
Is beauty the answer to these financial hurdles, and can it continue to deliver in 2026 beyond?
Cosmetics Business explores Target and Walmart’s Q1 updates below.
Target’s first quarter 2026 trading shows signs of recovery
Target’s first quarter net sales grew 6.7% to US$25.4bn compared with the same period last year, exceeding the department store chain’s expectations for the start of 2026.
This reflected a 6.4% increase in merchandise sales and a 24.6% increase in non-merchandise sales.
However, operating income was $1.1bn, a 22.9% decrease from the prior year, while net interest expense was $117m, in line with the $116m reported last year.
Overall sales during the quarter were driven by a robust beauty performance, increasing to $3.39bn, up from $3.1bn in 2025.
"First quarter financial results were stronger than expected, providing encouraging early signs that our clarified strategy is resonating with our guests and driving broad-based growth across our business," said Michael Fiddelke, CEO of Target.
“While we are pleased with our Q1 performance, our focus remains on building consistent, long-term growth, and we recognise there is much more work in front of us.
“As we look ahead, we are focused on staying disciplined and flexible in an uncertain operating environment, and continuing to invest boldly in our team, capabilities and an elevated guest experience to unlock our full potential over time."
In terms of maintaining the beauty momentum, Target stated that its preparation work for the launch of its Beauty Studios across more than 600 stores is continuing at pace.
Cara Sylvester, Target’s Executive VP and Chief Merchandising Officer, said in an investor relations call: “This includes working to minimise the disruption that these changes will cause, cultivating an assortment of trending beauty products, and building out robust plans to support an efficient transition.”
Although beauty has become a core focus for Target over the past year, Fiddelke said the updated offering builds on “ten years of growth in beauty”.
He stated in the investor call: “Our ambition is to just truly be an incredible beauty destination for our guests, and our working beauty studio plays an important role there.
“That is another place where you will see us do the right work on assortments to have loved brands.”
Walmart upbeat in Q1 2026, but feels the impact of the Middle East conflict
Walmart has reported a strong first quarter of trading in Q1, with revenues increasing 7.3% to $177.8bn.
Global e-commerce sales also grew 26%, led by store-fulfilled pick-up and delivery, as well as a robust Marketplace performance – Walmart’s e-commerce platform for approved third-party sellers to list and sell their products directly on walmart.com.
“Our results reflect our continued focus on delivering across the enterprise – better shopping experiences, a broader assortment and faster delivery,” said John Furner President and CEO of Walmart.
“Our teams are adopting innovative technologies, driving productivity through automation, and growing higher-margin commerce solutions.
“It is a disciplined approach that is helping us grow the business and strengthen returns.”
Walmart highlighted its beauty category as being a standout performer for the quarter.
John Furner, President, CEO and Director, Walmart, said in an investor relations call held on 21 May: “There have been a number of investments in the experience, both online and in-store, that are making a difference.”
Some 75% of the growth in beauty came from newly onboarded brands, including L’Oréal-owned skin care and SPF brand La Roche-Posay.
John David Rainey, Executive VP and CFO of Walmart, stated in the investor call: “We are expanding our assortment… and providing an assortment that appeals to customers of all income levels.”
However, the ongoing impact in the Middle East and the impact it has had on global fuel prices have raised concerns around consumer shopping habits.
Rainey added: “If fuel prices persist at this level, you may see some upward pressure on average unit retail prices.”
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