Target delivered a strong fiscal first-quarter performance on Wednesday, beating Wall Street expectations on both earnings and revenue while raising its full-year sales outlook, signaling early signs of a turnaround after a prolonged slump in customer traffic.

The retailer reported net sales of $25.44 billion, surpassing analyst estimates of $24.64 billion, with same-store sales climbing 5.6% — the first positive reading in that key metric in five quarters. Total net sales grew more than 6% year over year, driven by broad-based strength across all six of Target’s core merchandising categories, with particularly robust demand in health and wellness, toys, and baby segments.

CEO Michael Fiddelke, who assumed leadership earlier this year, emphasized that the company is seeing encouraging early results from strategic changes. “Even with this early progress, we know our work is just beginning, and we have confidence we’re on the right path because guests are responding in areas where we are leaning in and driving change,” Fiddelke said. Traffic across stores and digital platforms grew 4.4% compared with the same quarter last year, while digital comparable sales surged 8.9%, fueled by same-day delivery through the Target Circle 360 membership program.

Nonmerchandise sales spiked nearly 25%, reflecting strong growth in membership revenue and the Target+ marketplace. The company opened seven new stores during the quarter, with more than 100 remodel projects underway. Target raised its full-year revenue outlook to 4% net sales growth, up two percentage points from its prior forecast, and expects earnings per share near the high end of its $7.50 to $8.50 range.

Despite the positive results, shares fell in morning trading as investors weighed the retailer’s progress against ongoing macroeconomic uncertainty. Fiddelke maintained a cautious outlook, noting the company plans significant changes to its merchandising and guest experience in the coming year.