(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices, including zip code) |
(Registrant’s telephone number, including area code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Emerging growth company |
(99) | ||||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL). |
TARGET CORPORATION | |||||
Date: August 19, 2020 | /s/ Michael J. Fiddelke | ||||
Michael J. Fiddelke | |||||
Executive Vice President and Chief Financial Officer |
Contacts: | John Hulbert, Investors, (612) 761-6627 | ||||
Erin Conroy, Media, (612) 761-5928 | |||||
Target Media Hotline, (612) 696-3400 |
1Adjusted EPS, a non-GAAP financial measure, excludes the impact of certain discretely managed items. See the tables of this release for additional information about the items that have been excluded from Adjusted EPS. | ||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
(millions, except per share data) (unaudited) | August 1, 2020 | August 3, 2019 | Change | August 1, 2020 | August 3, 2019 | Change | ||||||||||||||||||||||||||||||||
Sales | $ | 22,696 | $ | 18,183 | 24.8 | % | $ | 42,067 | $ | 35,584 | 18.2 | % | ||||||||||||||||||||||||||
Other revenue | 279 | 239 | 16.6 | 523 | 465 | 12.3 | ||||||||||||||||||||||||||||||||
Total revenue | 22,975 | 18,422 | 24.7 | 42,590 | 36,049 | 18.1 | ||||||||||||||||||||||||||||||||
Cost of sales | 15,673 | 12,625 | 24.1 | 30,183 | 24,874 | 21.3 | ||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 4,460 | 3,912 | 14.0 | 8,520 | 7,575 | 12.5 | ||||||||||||||||||||||||||||||||
Depreciation and amortization (exclusive of depreciation included in cost of sales) | 542 | 561 | (3.5) | 1,119 | 1,142 | (2.1) | ||||||||||||||||||||||||||||||||
Operating income | 2,300 | 1,324 | 73.8 | 2,768 | 2,458 | 12.6 | ||||||||||||||||||||||||||||||||
Net interest expense | 122 | 120 | 1.9 | 239 | 246 | (2.5) | ||||||||||||||||||||||||||||||||
Net other (income) / expense | (11) | (13) | (19.5) | 11 | (27) | (141.9) | ||||||||||||||||||||||||||||||||
Earnings from continuing operations before income taxes | 2,189 | 1,217 | 79.8 | 2,518 | 2,239 | 12.5 | ||||||||||||||||||||||||||||||||
Provision for income taxes | 499 | 279 | 78.3 | 544 | 509 | 7.0 | ||||||||||||||||||||||||||||||||
Net earnings from continuing operations | 1,690 | 938 | 80.3 | 1,974 | 1,730 | 14.1 | ||||||||||||||||||||||||||||||||
Discontinued operations, net of tax | — | — | — | 3 | ||||||||||||||||||||||||||||||||||
Net earnings | $ | 1,690 | $ | 938 | 80.3 | % | $ | 1,974 | $ | 1,733 | 13.9 | % | ||||||||||||||||||||||||||
Basic earnings per share | ||||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 3.38 | $ | 1.83 | 84.6 | % | $ | 3.94 | $ | 3.37 | 17.1 | % | ||||||||||||||||||||||||||
Discontinued operations | — | — | — | 0.01 | ||||||||||||||||||||||||||||||||||
Net earnings per share | $ | 3.38 | $ | 1.83 | 84.6 | % | $ | 3.94 | $ | 3.37 | 16.9 | % | ||||||||||||||||||||||||||
Diluted earnings per share | ||||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 3.35 | $ | 1.82 | 84.4 | % | $ | 3.91 | $ | 3.34 | 17.0 | % | ||||||||||||||||||||||||||
Discontinued operations | — | — | — | 0.01 | ||||||||||||||||||||||||||||||||||
Net earnings per share | $ | 3.35 | $ | 1.82 | 84.4 | % | $ | 3.91 | $ | 3.35 | 16.8 | % | ||||||||||||||||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||||||||||||||
Basic | 500.1 | 512.1 | (2.3) | % | 500.6 | 513.9 | (2.6) | % | ||||||||||||||||||||||||||||||
Diluted | 504.4 | 516.1 | (2.3) | % | 505.1 | 517.8 | (2.5) | % | ||||||||||||||||||||||||||||||
Antidilutive shares | — | — | — | — | ||||||||||||||||||||||||||||||||||
Dividends declared per share | $ | 0.68 | $ | 0.66 | 3.0 | % | $ | 1.34 | $ | 1.30 | 3.1 | % |
(millions, except footnotes) (unaudited) | August 1, 2020 | February 1, 2020 | August 3, 2019 | |||||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 7,284 | $ | 2,577 | $ | 1,656 | ||||||||||||||
Inventory | 8,876 | 8,992 | 9,122 | |||||||||||||||||
Other current assets | 1,463 | 1,333 | 1,341 | |||||||||||||||||
Total current assets | 17,623 | 12,902 | 12,119 | |||||||||||||||||
Property and equipment | ||||||||||||||||||||
Land | 6,027 | 6,036 | 6,054 | |||||||||||||||||
Buildings and improvements | 30,946 | 30,603 | 29,908 | |||||||||||||||||
Fixtures and equipment | 5,665 | 6,083 | 5,622 | |||||||||||||||||
Computer hardware and software | 2,631 | 2,692 | 2,627 | |||||||||||||||||
Construction-in-progress | 811 | 533 | 667 | |||||||||||||||||
Accumulated depreciation | (19,341) | (19,664) | (18,866) | |||||||||||||||||
Property and equipment, net | 26,739 | 26,283 | 26,012 | |||||||||||||||||
Operating lease assets | 2,233 | 2,236 | 2,062 | |||||||||||||||||
Other noncurrent assets | 1,405 | 1,358 | 1,373 | |||||||||||||||||
Total assets | $ | 48,000 | $ | 42,779 | $ | 41,566 | ||||||||||||||
Liabilities and shareholders’ investment | ||||||||||||||||||||
Accounts payable | $ | 10,726 | $ | 9,920 | $ | 9,152 | ||||||||||||||
Accrued and other current liabilities | 5,057 | 4,406 | 4,059 | |||||||||||||||||
Current portion of long-term debt and other borrowings | 109 | 161 | 1,153 | |||||||||||||||||
Total current liabilities | 15,892 | 14,487 | 14,364 | |||||||||||||||||
Long-term debt and other borrowings | 14,188 | 11,338 | 10,365 | |||||||||||||||||
Noncurrent operating lease liabilities | 2,241 | 2,275 | 2,111 | |||||||||||||||||
Deferred income taxes | 1,121 | 1,122 | 1,082 | |||||||||||||||||
Other noncurrent liabilities | 1,980 | 1,724 | 1,808 | |||||||||||||||||
Total noncurrent liabilities | 19,530 | 16,459 | 15,366 | |||||||||||||||||
Shareholders’ investment | ||||||||||||||||||||
Common stock | 42 | 42 | 43 | |||||||||||||||||
Additional paid-in capital | 6,248 | 6,226 | 6,114 | |||||||||||||||||
Retained earnings | 7,121 | 6,433 | 6,461 | |||||||||||||||||
Accumulated other comprehensive loss | (833) | (868) | (782) | |||||||||||||||||
Total shareholders’ investment | 12,578 | 11,833 | 11,836 | |||||||||||||||||
Total liabilities and shareholders’ investment | $ | 48,000 | $ | 42,779 | $ | 41,566 |
Six Months Ended | ||||||||||||||
(millions) (unaudited) | August 1, 2020 | August 3, 2019 | ||||||||||||
Operating activities | ||||||||||||||
Net earnings | $ | 1,974 | $ | 1,733 | ||||||||||
Earnings from discontinued operations, net of tax | — | 3 | ||||||||||||
Net earnings from continuing operations | 1,974 | 1,730 | ||||||||||||
Adjustments to reconcile net earnings to cash provided by operations: | ||||||||||||||
Depreciation and amortization | 1,245 | 1,267 | ||||||||||||
Share-based compensation expense | 104 | 86 | ||||||||||||
Deferred income taxes | (12) | 104 | ||||||||||||
Noncash losses / (gains) and other, net | 86 | 42 | ||||||||||||
Changes in operating accounts: | ||||||||||||||
Inventory | 116 | 375 | ||||||||||||
Other assets | (14) | 64 | ||||||||||||
Accounts payable | 795 | (731) | ||||||||||||
Accrued and other liabilities | 822 | (127) | ||||||||||||
Cash provided by operating activities—continuing operations | 5,116 | 2,810 | ||||||||||||
Cash provided by operating activities—discontinued operations | — | 2 | ||||||||||||
Cash provided by operations | 5,116 | 2,812 | ||||||||||||
Investing activities | ||||||||||||||
Expenditures for property and equipment | (1,414) | (1,394) | ||||||||||||
Proceeds from disposal of property and equipment | 10 | 10 | ||||||||||||
Other investments | 2 | — | ||||||||||||
Cash required for investing activities | (1,402) | (1,384) | ||||||||||||
Financing activities | ||||||||||||||
Additions to long-term debt | 2,480 | 994 | ||||||||||||
Reductions of long-term debt | (126) | (1,026) | ||||||||||||
Dividends paid | (662) | (658) | ||||||||||||
Repurchase of stock | (706) | (662) | ||||||||||||
Stock option exercises | 7 | 24 | ||||||||||||
Cash provided by / (required for) financing activities | 993 | (1,328) | ||||||||||||
Net increase in cash and cash equivalents | 4,707 | 100 | ||||||||||||
Cash and cash equivalents at beginning of period | 2,577 | 1,556 | ||||||||||||
Cash and cash equivalents at end of period | $ | 7,284 | $ | 1,656 |
Rate Analysis | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
(unaudited) | August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | ||||||||||||||||||||||
Gross margin rate | 30.9 | % | 30.6 | % | 28.3 | % | 30.1 | % | ||||||||||||||||||
SG&A expense rate | 19.4 | 21.2 | 20.0 | 21.0 | ||||||||||||||||||||||
Depreciation and amortization (exclusive of depreciation included in cost of sales) expense rate | 2.4 | 3.0 | 2.6 | 3.2 | ||||||||||||||||||||||
Operating income margin rate | 10.0 | 7.2 | 6.5 | 6.8 |
Comparable Sales | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
(unaudited) | August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | ||||||||||||||||||||||
Comparable sales change | 24.3 | % | 3.4 | % | 17.7 | % | 4.1 | % | ||||||||||||||||||
Drivers of change in comparable sales | ||||||||||||||||||||||||||
Number of transactions | 4.6 | 2.4 | 1.6 | 3.3 | ||||||||||||||||||||||
Average transaction amount | 18.8 | 0.9 | 15.8 | 0.7 |
Contribution to Comparable Sales Change | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
(unaudited) | August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | ||||||||||||||||||||||
Stores originated channel comparable sales change | 10.9 | % | 1.5 | % | 6.0 | % | 2.1 | % | ||||||||||||||||||
Contribution from digitally originated sales | 13.4 | 1.8 | 11.7 | 1.9 | ||||||||||||||||||||||
Total comparable sales change | 24.3 | % | 3.4 | % | 17.7 | % | 4.1 | % |
Sales by Channel | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
(unaudited) | August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | ||||||||||||||||||||||
Stores originated | 82.8 | % | 92.7 | % | 83.7 | % | 92.8 | % | ||||||||||||||||||
Digitally originated | 17.2 | 7.3 | 16.3 | 7.2 | ||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
RedCard Penetration | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
(unaudited) | August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | ||||||||||||||||||||||
Target Debit Card | 11.8 | % | 12.5 | % | 12.2 | % | 12.8 | % | ||||||||||||||||||
Target Credit Cards | 8.7 | 10.7 | 9.2 | 10.6 | ||||||||||||||||||||||
Total RedCard Penetration | 20.5 | % | 23.2 | % | 21.4 | % | 23.4 | % |
Number of Stores and Retail Square Feet | Number of Stores | Retail Square Feet (a) | ||||||||||||||||||||||||||||||||||||
(unaudited) | August 1, 2020 | February 1, 2020 | August 3, 2019 | August 1, 2020 | February 1, 2020 | August 3, 2019 | ||||||||||||||||||||||||||||||||
170,000 or more sq. ft. | 272 | 272 | 272 | 48,613 | 48,619 | 48,619 | ||||||||||||||||||||||||||||||||
50,000 to 169,999 sq. ft. | 1,505 | 1,505 | 1,499 | 189,224 | 189,227 | 188,711 | ||||||||||||||||||||||||||||||||
49,999 or less sq. ft. | 94 | 91 | 82 | 2,745 | 2,670 | 2,357 | ||||||||||||||||||||||||||||||||
Total | 1,871 | 1,868 | 1,853 | 240,582 | 240,516 | 239,687 |
Reconciliation of Non-GAAP Adjusted EPS | Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||
August 1, 2020 | August 3, 2019 | |||||||||||||||||||||||||||||||||||||||||||
(millions, except per share data) (unaudited) | Pretax | Net of Tax | Per Share | Pretax | Net of Tax | Per Share | Change | |||||||||||||||||||||||||||||||||||||
GAAP diluted earnings per share from continuing operations | $ | 3.35 | $ | 1.82 | 84.4 | % | ||||||||||||||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||||||||||||||||||||
Gain on investment (a) | $ | (9) | $ | (6) | $ | (0.01) | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||
Other (b) | 25 | 18 | 0.04 | — | — | — | ||||||||||||||||||||||||||||||||||||||
Adjusted diluted earnings per share from continuing operations | $ | 3.38 | $ | 1.82 | 85.7 | % |
Reconciliation of Non-GAAP Adjusted EPS | Six Months Ended | |||||||||||||||||||||||||||||||||||||||||||
August 1, 2020 | August 3, 2019 | |||||||||||||||||||||||||||||||||||||||||||
(millions, except per share data) (unaudited) | Pretax | Net of Tax | Per Share | Pretax | Net of Tax | Per Share | Change | |||||||||||||||||||||||||||||||||||||
GAAP diluted earnings per share from continuing operations | $ | 3.91 | $ | 3.34 | 17.0 | % | ||||||||||||||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||||||||||||||||||||
Loss on investment (a) | $ | 12 | $ | 9 | $ | 0.02 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||
Other (b) | 25 | 18 | 0.04 | — | — | — | ||||||||||||||||||||||||||||||||||||||
Adjusted diluted earnings per share from continuing operations | $ | 3.96 | $ | 3.34 | 18.6 | % |
EBIT and EBITDA | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||||
(dollars in millions) (unaudited) | August 1, 2020 | August 3, 2019 | Change | August 1, 2020 | August 3, 2019 | Change | ||||||||||||||||||||||||||||||||
Net earnings from continuing operations | $ | 1,690 | $ | 938 | 80.3 | % | $ | 1,974 | $ | 1,730 | 14.1 | % | ||||||||||||||||||||||||||
+ Provision for income taxes | 499 | 279 | 78.3 | 544 | 509 | 7.0 | ||||||||||||||||||||||||||||||||
+ Net interest expense | 122 | 120 | 1.9 | 239 | 246 | (2.5) | ||||||||||||||||||||||||||||||||
EBIT | $ | 2,311 | $ | 1,337 | 72.8 | % | $ | 2,757 | $ | 2,485 | 11.0 | % | ||||||||||||||||||||||||||
+ Total depreciation and amortization (a) | 604 | 624 | (3.2) | 1,245 | 1,267 | (1.9) | ||||||||||||||||||||||||||||||||
EBITDA | $ | 2,915 | $ | 1,961 | 48.6 | % | $ | 4,002 | $ | 3,752 | 6.7 | % |
After-Tax Return on Invested Capital | ||||||||||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||||
Trailing Twelve Months | ||||||||||||||||||||||||||
Numerator | August 1, 2020 | August 3, 2019 | ||||||||||||||||||||||||
Operating income | $ | 4,968 | $ | 4,395 | ||||||||||||||||||||||
+ Net other income / (expense) | (28) | 42 | ||||||||||||||||||||||||
EBIT | 4,940 | 4,437 | ||||||||||||||||||||||||
+ Operating lease interest (a) | 87 | 85 | ||||||||||||||||||||||||
- Income taxes (b) | 1,076 | 937 | ||||||||||||||||||||||||
Net operating profit after taxes | $ | 3,951 | $ | 3,585 |
Denominator | August 1, 2020 | August 3, 2019 | August 4, 2018 | |||||||||||||||||
Current portion of long-term debt and other borrowings | $ | 109 | $ | 1,153 | $ | 1,044 | ||||||||||||||
+ Noncurrent portion of long-term debt | 14,188 | 10,365 | 10,108 | |||||||||||||||||
+ Shareholders' investment | 12,578 | 11,836 | 11,167 | |||||||||||||||||
+ Operating lease liabilities (c) | 2,448 | 2,285 | 2,183 | |||||||||||||||||
- Cash and cash equivalents | 7,284 | 1,656 | 1,180 | |||||||||||||||||
Invested capital | $ | 22,039 | $ | 23,983 | $ | 23,322 | ||||||||||||||
Average invested capital (d) | $ | 23,011 | $ | 23,652 |
After-tax return on invested capital | 17.2 | % | 15.2 | % |
Document and Entity Information Document and Entity Information |
Aug. 19, 2020 |
---|---|
Cover Page [Abstract] | |
Document Type | 8-K |
Document Period End Date | Aug. 19, 2020 |
Entity Registrant Name | Target Corp |
Entity Central Index Key | 0000027419 |
Amendment Flag | false |
Entity Incorporation, State or Country Code | MN |
Entity File Number | 1-6049 |
Entity Tax Identification Number | 41-0215170 |
Entity Address, Address Line One | 1000 Nicollet Mall, |
Entity Address, City or Town | Minneapolis, |
Entity Address, State or Province | MN |
Entity Address, Postal Zip Code | 55403 |
City Area Code | (612) |
Local Phone Number | 304-6073 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common stock, par value $0.0833 per share |
Trading Symbol | TGT |
Security Exchange Name | NYSE |
Entity Emerging Growth Company | false |
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