UNITED STATES SECURITIES AND EXCHANGE COMMISSION |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||||||||||||||||||||||
Smaller reporting company | Emerging growth company |
FINANCIAL STATEMENTS | ||||||||
Consolidated Statements of Operations | |||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(millions, except per share data) (unaudited) | August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | |||||||||||||||||||
Sales | $ | $ | $ | $ | |||||||||||||||||||
Other revenue | |||||||||||||||||||||||
Total revenue | |||||||||||||||||||||||
Cost of sales | |||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Depreciation and amortization (exclusive of depreciation included in cost of sales) | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
Net interest expense | |||||||||||||||||||||||
Net other (income) / expense | ( | ( | ( | ||||||||||||||||||||
Earnings from continuing operations before income taxes | |||||||||||||||||||||||
Provision for income taxes | |||||||||||||||||||||||
Net earnings from continuing operations | |||||||||||||||||||||||
Discontinued operations, net of tax | |||||||||||||||||||||||
Net earnings | $ | $ | $ | $ | |||||||||||||||||||
Basic earnings per share | |||||||||||||||||||||||
Continuing operations | $ | $ | $ | $ | |||||||||||||||||||
Discontinued operations | |||||||||||||||||||||||
Net earnings per share | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per share | |||||||||||||||||||||||
Continuing operations | $ | $ | $ | $ | |||||||||||||||||||
Discontinued operations | |||||||||||||||||||||||
Net earnings per share | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares outstanding | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Antidilutive shares |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 1 |
FINANCIAL STATEMENTS | ||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(millions) (unaudited) | August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | |||||||||||||||||||
Net earnings | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||
Pension, net of tax | |||||||||||||||||||||||
Currency translation adjustment and cash flow hedges, net of tax | ( | ( | |||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 2 |
FINANCIAL STATEMENTS | ||||||||
Consolidated Statements of Financial Position | |||||||||||||||||
(millions, except footnotes) (unaudited) | August 1, 2020 | February 1, 2020 | August 3, 2019 | ||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
Inventory | |||||||||||||||||
Other current assets | |||||||||||||||||
Total current assets | |||||||||||||||||
Property and equipment | |||||||||||||||||
Land | |||||||||||||||||
Buildings and improvements | |||||||||||||||||
Fixtures and equipment | |||||||||||||||||
Computer hardware and software | |||||||||||||||||
Construction-in-progress | |||||||||||||||||
Accumulated depreciation | ( | ( | ( | ||||||||||||||
Property and equipment, net | |||||||||||||||||
Operating lease assets | |||||||||||||||||
Other noncurrent assets | |||||||||||||||||
Total assets | $ | $ | $ | ||||||||||||||
Liabilities and shareholders’ investment | |||||||||||||||||
Accounts payable | $ | $ | $ | ||||||||||||||
Accrued and other current liabilities | |||||||||||||||||
Current portion of long-term debt and other borrowings | |||||||||||||||||
Total current liabilities | |||||||||||||||||
Long-term debt and other borrowings | |||||||||||||||||
Noncurrent operating lease liabilities | |||||||||||||||||
Deferred income taxes | |||||||||||||||||
Other noncurrent liabilities | |||||||||||||||||
Total noncurrent liabilities | |||||||||||||||||
Shareholders’ investment | |||||||||||||||||
Common stock | |||||||||||||||||
Additional paid-in capital | |||||||||||||||||
Retained earnings | |||||||||||||||||
Accumulated other comprehensive loss | ( | ( | ( | ||||||||||||||
Total shareholders’ investment | |||||||||||||||||
Total liabilities and shareholders’ investment | $ | $ | $ |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 3 |
FINANCIAL STATEMENTS | ||||||||
Consolidated Statements of Cash Flows | |||||||||||
Six Months Ended | |||||||||||
(millions) (unaudited) | August 1, 2020 | August 3, 2019 | |||||||||
Operating activities | |||||||||||
Net earnings | $ | $ | |||||||||
Earnings from discontinued operations, net of tax | |||||||||||
Net earnings from continuing operations | |||||||||||
Adjustments to reconcile net earnings to cash provided by operations | |||||||||||
Depreciation and amortization | |||||||||||
Share-based compensation expense | |||||||||||
Deferred income taxes | ( | ||||||||||
Noncash losses / (gains) and other, net | |||||||||||
Changes in operating accounts | |||||||||||
Inventory | |||||||||||
Other assets | ( | ||||||||||
Accounts payable | ( | ||||||||||
Accrued and other liabilities | ( | ||||||||||
Cash provided by operating activities—continuing operations | |||||||||||
Cash provided by operating activities—discontinued operations | |||||||||||
Cash provided by operations | |||||||||||
Investing activities | |||||||||||
Expenditures for property and equipment | ( | ( | |||||||||
Proceeds from disposal of property and equipment | |||||||||||
Other investments | |||||||||||
Cash required for investing activities | ( | ( | |||||||||
Financing activities | |||||||||||
Additions to long-term debt | |||||||||||
Reductions of long-term debt | ( | ( | |||||||||
Dividends paid | ( | ( | |||||||||
Repurchase of stock | ( | ( | |||||||||
Stock option exercises | |||||||||||
Cash provided by / (required for) financing activities | ( | ||||||||||
Net increase in cash and cash equivalents | |||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Supplemental information | |||||||||||
Leased assets obtained in exchange for new finance lease liabilities | $ | $ | |||||||||
Leased assets obtained in exchange for new operating lease liabilities |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 4 |
FINANCIAL STATEMENTS | ||||||||
Consolidated Statements of Shareholders’ Investment | |||||||||||||||||||||||||||||||||||
Common | Stock | Additional | Accumulated Other | ||||||||||||||||||||||||||||||||
Stock | Par | Paid-in | Retained | Comprehensive | |||||||||||||||||||||||||||||||
(millions) (unaudited) | Shares | Value | Capital | Earnings | (Loss) / Income | Total | |||||||||||||||||||||||||||||
February 2, 2019 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Dividends declared | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Repurchase of stock | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||
Accelerated share repurchase pending final settlement | ( | — | ( | ( | — | ( | |||||||||||||||||||||||||||||
Stock options and awards | — | — | — | ||||||||||||||||||||||||||||||||
May 4, 2019 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Dividends declared | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Repurchase of stock | ( | — | ( | — | |||||||||||||||||||||||||||||||
Stock options and awards | — | — | — | ||||||||||||||||||||||||||||||||
August 3, 2019 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Dividends declared | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Repurchase of stock | ( | ( | ( | — | ( | ||||||||||||||||||||||||||||||
Accelerated share repurchase pending final settlement | ( | — | ( | ( | — | ( | |||||||||||||||||||||||||||||
Stock options and awards | — | — | — | ||||||||||||||||||||||||||||||||
November 2, 2019 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Dividends declared | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Repurchase of stock | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||
Stock options and awards | — | — | — | ||||||||||||||||||||||||||||||||
February 1, 2020 | $ | $ | $ | $ | ( | $ |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 5 |
FINANCIAL STATEMENTS | ||||||||
Consolidated Statements of Shareholders’ Investment | |||||||||||||||||||||||||||||||||||
Common | Stock | Additional | Accumulated Other | ||||||||||||||||||||||||||||||||
Stock | Par | Paid-in | Retained | Comprehensive | |||||||||||||||||||||||||||||||
(millions) (unaudited) | Shares | Value | Capital | Earnings | (Loss) / Income | Total | |||||||||||||||||||||||||||||
February 1, 2020 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Dividends declared | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Repurchase of stock | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Stock options and awards | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
May 2, 2020 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Dividends declared | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Stock options and awards | — | — | — | ||||||||||||||||||||||||||||||||
August 1, 2020 | $ | $ | $ | $ | ( | $ |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 6 |
FINANCIAL STATEMENTS | ||||||||
INDEX |
INDEX TO NOTES | |||||||||||
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 7 |
FINANCIAL STATEMENTS | ||||||||
NOTES |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 8 |
FINANCIAL STATEMENTS | ||||||||
NOTES |
Revenues | Three Months Ended | Six Months Ended | |||||||||||||||||||||
(millions) | August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | |||||||||||||||||||
Apparel and accessories (a) | $ | $ | $ | $ | |||||||||||||||||||
Beauty and household essentials (b) | |||||||||||||||||||||||
Food and beverage (c) | |||||||||||||||||||||||
Hardlines (d) | |||||||||||||||||||||||
Home furnishings and décor (e) | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Sales | |||||||||||||||||||||||
Credit card profit sharing | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Other revenue | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Gift Card Liability Activity | February 1, 2020 | Gift Cards Issued During Current Period But Not Redeemed (b) | Revenue Recognized From Beginning Liability | August 1, 2020 | |||||||||||||||||||
(millions) | |||||||||||||||||||||||
Gift card liability (a) | $ | $ | $ | ( | $ |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 9 |
FINANCIAL STATEMENTS | ||||||||
NOTES |
Fair Value Measurements - Recurring Basis | Fair Value at | ||||||||||||||||||||||
(millions) | Classification | Pricing Category | August 1, 2020 | February 1, 2020 | August 3, 2019 | ||||||||||||||||||
Assets | |||||||||||||||||||||||
Short-term investments | Cash and Cash Equivalents | Level 1 | $ | $ | $ | ||||||||||||||||||
Prepaid forward contracts | Other Current Assets | Level 1 | |||||||||||||||||||||
Equity securities (a) | Other Current Assets | Level 1 | |||||||||||||||||||||
Interest rate swaps | Other Noncurrent Assets | Level 2 | |||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Interest rate swaps | Other Noncurrent Liabilities | Level 2 |
Significant Financial Instruments Not Measured at Fair Value (a) (millions) | August 1, 2020 | February 1, 2020 | August 3, 2019 | |||||||||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||||||
Long-term debt, including current portion (b) | $ | $ | $ | $ | $ | $ |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 10 |
FINANCIAL STATEMENTS | ||||||||
NOTES |
Effect of Hedges on Debt | ||||||||||||||||||||
(millions) | August 1, 2020 | February 1, 2020 | August 3, 2019 | |||||||||||||||||
Long-term debt and other borrowings | ||||||||||||||||||||
Carrying amount of hedged debt | $ | $ | $ | |||||||||||||||||
Cumulative hedging adjustments, included in carrying amount |
Effect of Hedges on Net Interest Expense | Three Months Ended | Six Months Ended | |||||||||||||||||||||
(millions) | August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | |||||||||||||||||||
Gain (loss) on fair value hedges recognized in Net Interest Expense | |||||||||||||||||||||||
Interest rate swap designated as fair value hedges | $ | $ | $ | $ | |||||||||||||||||||
Hedged debt | ( | ( | ( | ( | |||||||||||||||||||
Total | $ | $ | $ | $ |
Share Repurchase Activity | Three Months Ended | Six Months Ended | |||||||||||||||||||||
(millions, except per share data) | August 1, 2020 | August 3, 2019 (a) | August 1, 2020 | August 3, 2019 (a) | |||||||||||||||||||
Number of shares purchased | |||||||||||||||||||||||
Average price paid per share | $ | $ | $ | $ | |||||||||||||||||||
Total investment | $ | $ | $ | $ |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 11 |
FINANCIAL STATEMENTS | ||||||||
NOTES |
Net Pension Benefits Expense | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
(millions) | Classification | August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | |||||||||||||||||||||
Service cost benefits earned | SG&A Expenses | $ | $ | $ | $ | |||||||||||||||||||||
Interest cost on projected benefit obligation | Net Other (Income) / Expense | |||||||||||||||||||||||||
Expected return on assets | Net Other (Income) / Expense | ( | ( | ( | ( | |||||||||||||||||||||
Amortization of losses | Net Other (Income) / Expense | |||||||||||||||||||||||||
Amortization of prior service cost | Net Other (Income) / Expense | ( | ( | ( | ( | |||||||||||||||||||||
Total | $ | $ | $ | $ |
Change in Accumulated Other Comprehensive Loss | Cash Flow Hedges | Currency Translation Adjustment | Pension | Total | |||||||||||||||||||
(millions) | |||||||||||||||||||||||
February 1, 2020 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income before reclassifications, net of tax | ( | ( | |||||||||||||||||||||
Amounts reclassified from AOCI, net of tax | |||||||||||||||||||||||
August 1, 2020 | $ | ( | $ | ( | $ | ( | $ | ( |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 12 |
MANAGEMENT'S DISCUSSION AND ANALYSIS | ||||||||
FINANCIAL SUMMARY |
Earnings Per Share from Continuing Operations | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||
August 1, 2020 | August 3, 2019 | Change | August 1, 2020 | August 3, 2019 | Change | ||||||||||||||||||||||||||||||
GAAP diluted earnings per share | $ | 3.35 | $ | 1.82 | 84.4 | % | $ | 3.91 | $ | 3.34 | 17.0 | % | |||||||||||||||||||||||
Adjustments | 0.03 | — | 0.06 | — | |||||||||||||||||||||||||||||||
Adjusted diluted earnings per share | $ | 3.38 | $ | 1.82 | 85.7 | % | $ | 3.96 | $ | 3.34 | 18.6 | % |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 13 |
MANAGEMENT'S DISCUSSION AND ANALYSIS | ||||||||
FINANCIAL SUMMARY |
Summary of Operating Income | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||
(dollars in millions) | 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 | % |
Rate Analysis | Three Months Ended | Six Months Ended | |||||||||||||||||||||
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 |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 14 |
MANAGEMENT'S DISCUSSION AND ANALYSIS | ||||||||
ANALYSIS OF OPERATIONS |
Comparable Sales | Three Months Ended | Six Months Ended | |||||||||||||||||||||
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 | |||||||||||||||||||||
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 | |||||||||||||||||||||
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 | % |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 15 |
MANAGEMENT'S DISCUSSION AND ANALYSIS | ||||||||
ANALYSIS OF OPERATIONS |
Sales by Product Category | Three Months Ended | Six Months Ended | |||||||||||||||||||||
August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | ||||||||||||||||||||
Apparel and accessories | 18 | % | 20 | % | 16 | % | 20 | % | |||||||||||||||
Beauty and household essentials | 27 | 28 | 29 | 28 | |||||||||||||||||||
Food and beverage | 19 | 19 | 21 | 20 | |||||||||||||||||||
Hardlines | 16 | 14 | 15 | 14 | |||||||||||||||||||
Home furnishings and décor | 20 | 19 | 19 | 18 | |||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
RedCard Penetration | Three Months Ended | Six Months Ended | |||||||||||||||||||||
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 | % |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 16 |
MANAGEMENT'S DISCUSSION AND ANALYSIS | ||||||||
ANALYSIS OF OPERATIONS |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 17 |
MANAGEMENT'S DISCUSSION AND ANALYSIS | ||||||||
ANALYSIS OF OPERATIONS |
Change in Number of Stores | Three Months Ended | Six Months Ended | |||||||||||||||||||||
August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | ||||||||||||||||||||
Beginning store count | 1,871 | 1,851 | 1,868 | 1,844 | |||||||||||||||||||
Opened | — | 4 | 3 | 11 | |||||||||||||||||||
Closed | — | (2) | — | (2) | |||||||||||||||||||
Ending store count | 1,871 | 1,853 | 1,871 | 1,853 | |||||||||||||||||||
Number of Stores and Retail Square Feet | Number of Stores | Retail Square Feet (a) | |||||||||||||||||||||
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 |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 18 |
MANAGEMENT'S DISCUSSION AND ANALYSIS | ||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
Reconciliation of Non-GAAP Adjusted EPS | Three Months Ended | |||||||||||||||||||||||||||||||||||||
August 1, 2020 | August 3, 2019 | |||||||||||||||||||||||||||||||||||||
(millions, except per share data) | Pretax | Net of Tax | Per Share Amounts | Pretax | Net of Tax | Per Share Amounts | ||||||||||||||||||||||||||||||||
GAAP diluted earnings per share from continuing operations | $ | 3.35 | $ | 1.82 | ||||||||||||||||||||||||||||||||||
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 |
Reconciliation of Non-GAAP Adjusted EPS | Six Months Ended | |||||||||||||||||||||||||||||||||||||
August 1, 2020 | August 3, 2019 | |||||||||||||||||||||||||||||||||||||
(millions, except per share data) | Pretax | Net of Tax | Per Share Amounts | Pretax | Net of Tax | Per Share Amounts | ||||||||||||||||||||||||||||||||
GAAP diluted earnings per share from continuing operations | $ | 3.91 | $ | 3.34 | ||||||||||||||||||||||||||||||||||
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 |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 19 |
MANAGEMENT'S DISCUSSION AND ANALYSIS | ||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
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 | % |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 20 |
MANAGEMENT'S DISCUSSION AND ANALYSIS | ||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
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 | % |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 21 |
MANAGEMENT'S DISCUSSION AND ANALYSIS | ||||||||
ANALYSIS OF FINANCIAL CONDITION |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 22 |
MANAGEMENT'S DISCUSSION AND ANALYSIS | ||||||||
ANALYSIS OF FINANCIAL CONDITION |
Credit Ratings | Moody’s | Standard and Poor’s | Fitch | ||||||||
Long-term debt | A2 | A | A- | ||||||||
Commercial paper | P-1 | A-1 | F1 |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 23 |
MANAGEMENT'S DISCUSSION AND ANALYSIS & SUPPLEMENTAL INFORMATION | ||||||||
FORWARD LOOKING STATEMENTS & CONTROLS AND PROCEDURES |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 24 |
SUPPLEMENTAL INFORMATION | ||||||||
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 25 |
SUPPLEMENTAL INFORMATION | ||||||||
(3)A | ||||||||
(3)B | ||||||||
(10)D | ||||||||
(10)T | ||||||||
(10)U | ||||||||
(10)V | ||||||||
(10)Y | ||||||||
(31)A | ||||||||
(31)B | ||||||||
(32)A | ||||||||
(32)B | ||||||||
101.INS | XBRL Instance Document | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 26 |
SUPPLEMENTAL INFORMATION | ||||||||
TARGET CORPORATION | |||||||||||
Dated: August 28, 2020 | By: | /s/ Michael J. Fiddelke | |||||||||
Michael J. Fiddelke | |||||||||||
Executive Vice President and | |||||||||||
Chief Financial Officer | |||||||||||
(Duly Authorized Officer and | |||||||||||
Principal Financial Officer) | |||||||||||
/s/ Robert M. Harrison | |||||||||||
Robert M. Harrison | |||||||||||
Senior Vice President, Chief Accounting Officer | |||||||||||
and Controller | |||||||||||
TARGET CORPORATION | ![]() | Q2 2020 Form 10-Q | 27 |
Date: August 28, 2020 | ||
/s/ Brian C. Cornell | ||
Brian C. Cornell | ||
Chairman and Chief Executive Officer |
Date: August 28, 2020 | ||
/s/ Michael J. Fiddelke | ||
Michael J. Fiddelke | ||
Executive Vice President and Chief Financial Officer |
Date: August 28, 2020 | ||
/s/ Brian C. Cornell | ||
Brian C. Cornell | ||
Chairman and Chief Executive Officer |
Date: August 28, 2020 | ||
/s/ Michael J. Fiddelke | ||
Michael J. Fiddelke | ||
Executive Vice President and Chief Financial Officer |
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Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2020 |
Aug. 03, 2019 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 1,690 | $ 938 | $ 1,974 | $ 1,733 |
Other comprehensive income | ||||
Pension, net of tax | 22 | 10 | 44 | 20 |
Currency translation adjustment and cash flow hedges, net of tax | (1) | 0 | (9) | 3 |
Other comprehensive income | 21 | 10 | 35 | 23 |
Comprehensive income | $ 1,711 | $ 948 | $ 2,009 | $ 1,756 |
Consolidated Statements of Financial Position (Parenthetical) - $ / shares |
Aug. 01, 2020 |
Feb. 01, 2020 |
Aug. 03, 2019 |
---|---|---|---|
Statement of Financial Position [Abstract] | |||
Common stock, shares authorized (in shares) | 6,000,000,000 | 6,000,000,000 | 6,000,000,000 |
Common stock, par value (in dollars per share) | $ 0.0833 | $ 0.0833 | $ 0.0833 |
Common stock, shares issued (in shares) | 500,252,831 | 504,198,962 | 511,335,375 |
Common stock, shares outstanding (in shares) | 500,252,831 | 504,198,962 | 511,335,375 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, shares issued (in shares) | 0 | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 |
Consolidated Statements of Shareholders' Investment - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Aug. 01, 2020 |
May 02, 2020 |
Feb. 01, 2020 |
Nov. 02, 2019 |
Aug. 03, 2019 |
May 04, 2019 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
Increase (Decrease) in Shareholders' Investment | ||||||||
Beginning balance (in shares) | 504,198,962 | 511,335,375 | 504,198,962 | |||||
Beginning balance | $ 11,169 | $ 11,833 | $ 11,545 | $ 11,836 | $ 11,117 | $ 11,297 | $ 11,833 | $ 11,297 |
Net earnings | 1,690 | 284 | 834 | 714 | 938 | 795 | 1,974 | 1,733 |
Other comprehensive income (loss) | 21 | 14 | (95) | 9 | 10 | 13 | $ 35 | $ 23 |
Dividends declared | $ (344) | (333) | (336) | (338) | $ (341) | (330) | ||
Repurchase of stock (in shares) | 0 | (4,300,000) | (5,700,000) | (7,900,000) | ||||
Repurchase of stock | (609) | (157) | (296) | $ 59 | (277) | |||
Accelerated share repurchase pending final settlement | (450) | (400) | ||||||
Stock options and awards | $ 42 | (20) | $ 42 | 70 | $ 53 | 19 | ||
Ending balance (in shares) | 500,252,831 | 504,198,962 | 511,335,375 | 500,252,831 | 511,335,375 | |||
Ending balance | $ 12,578 | $ 11,169 | $ 11,833 | $ 11,545 | $ 11,836 | $ 11,117 | $ 12,578 | $ 11,836 |
Common Stock | ||||||||
Increase (Decrease) in Shareholders' Investment | ||||||||
Beginning balance (in shares) | 499,900,000 | 504,200,000 | 506,700,000 | 511,300,000 | 512,300,000 | 517,800,000 | 504,200,000 | 517,800,000 |
Beginning balance | $ 42 | $ 42 | $ 42 | $ 43 | $ 43 | $ 43 | $ 42 | $ 43 |
Repurchase of stock (in shares) | (5,700,000) | (2,600,000) | (3,000,000.0) | (1,300,000) | (3,600,000) | |||
Repurchase of stock | $ (1) | $ 0 | ||||||
Accelerated share repurchase pending final settlement (in shares) | (2,500,000) | (3,000,000.0) | ||||||
Stock options and awards (in shares) | 400,000 | 1,400,000 | 100,000 | 900,000 | 300,000 | 1,100,000 | ||
Ending balance (in shares) | 500,300,000 | 499,900,000 | 504,200,000 | 506,700,000 | 511,300,000 | 512,300,000 | 500,300,000 | 511,300,000 |
Ending balance | $ 42 | $ 42 | $ 42 | $ 42 | $ 43 | $ 43 | $ 42 | $ 43 |
Additional Paid-in Capital | ||||||||
Increase (Decrease) in Shareholders' Investment | ||||||||
Beginning balance | 6,206 | 6,226 | 6,006 | 6,114 | 5,908 | 6,042 | 6,226 | 6,042 |
Repurchase of stock | 178 | 0 | 153 | |||||
Accelerated share repurchase pending final settlement | (178) | (153) | ||||||
Stock options and awards | 42 | (20) | 42 | 70 | 53 | 19 | ||
Ending balance | 6,248 | 6,206 | 6,226 | 6,006 | 6,114 | 5,908 | 6,248 | 6,114 |
Retained Earnings | ||||||||
Increase (Decrease) in Shareholders' Investment | ||||||||
Beginning balance | 5,775 | 6,433 | 6,270 | 6,461 | 5,958 | 6,017 | 6,433 | 6,017 |
Net earnings | 1,690 | 284 | 834 | 714 | 938 | 795 | ||
Dividends declared | (344) | (333) | (336) | (338) | (341) | (330) | ||
Repurchase of stock | (609) | (335) | (295) | (94) | (277) | |||
Accelerated share repurchase pending final settlement | (272) | (247) | ||||||
Ending balance | 7,121 | 5,775 | 6,433 | 6,270 | 6,461 | 5,958 | 7,121 | 6,461 |
Accumulated Other Comprehensive (Loss)/Income | ||||||||
Increase (Decrease) in Shareholders' Investment | ||||||||
Beginning balance | (854) | (868) | (773) | (782) | (792) | (805) | (868) | (805) |
Other comprehensive income (loss) | 21 | 14 | (95) | 9 | 10 | 13 | ||
Ending balance | $ (833) | $ (854) | $ (868) | $ (773) | $ (782) | $ (792) | $ (833) | $ (782) |
Consolidated Statements of Shareholders' Investment (Parenthetical) - $ / shares |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Aug. 01, 2020 |
Aug. 03, 2019 |
Feb. 01, 2020 |
|
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared per share (in dollars per share) | $ 0.68 | $ 0.66 | $ 2.62 |
Accounting Policies |
6 Months Ended |
---|---|
Aug. 01, 2020 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies These unaudited condensed consolidated financial statements are prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC) applicable to interim financial statements. While these statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by United States (U.S.) generally accepted accounting principles (U.S. GAAP) for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the financial statement disclosures in our 2019 Form 10-K. We use the same accounting policies in preparing quarterly and annual financial statements. Unless otherwise noted, amounts presented within the Notes to Consolidated Financial Statements refer to our continuing operations. We operate as a single segment that includes all of our continuing operations, which are designed to enable guests to purchase products seamlessly in stores or through our digital channels. Nearly all of our revenues are generated in the U.S. The vast majority of our long-lived assets are located within the U.S. Due to the seasonal nature of our business, quarterly revenues, expenses, earnings, and cash flows are not necessarily indicative of the results that may be expected for the full year.
|
Impact of Coronavirus (COVID-19) |
6 Months Ended |
---|---|
Aug. 01, 2020 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Impact of Coronavirus (COVID-19) | Impact of Coronavirus (COVID-19) On March 11, 2020, the World Health Organization declared the novel coronavirus disease (COVID-19) a pandemic, and on March 13, 2020, the United States declared a national emergency. States and cities have taken various measures in response to COVID-19, including mandating the closure of certain businesses and encouraging or requiring citizens to avoid large gatherings. To date all of our stores, digital channels, and distribution centers remain open. Throughout the six months ended August 1, 2020, guest shopping patterns changed significantly and unpredictably in reaction to the COVID-19 pandemic. Four of our five core merchandise categories have experienced significant sales growth year-to-date; however, sales of Apparel and Accessories declined significantly in the first quarter before rebounding in the second quarter. Note 3 provides sales by category. In response to these changes, we have taken many actions, including accelerating purchases of certain merchandise in our core categories and slowing or canceling certain purchase orders, primarily for Apparel and Accessories. As a result of these actions, during the first quarter of 2020, we recorded $216 million of purchase order cancellation fees in Cost of Sales.
|
Revenues |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 01, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Revenues General merchandise sales represent the vast majority of our revenues. We also earn revenues from a variety of other sources, most notably credit card profit sharing income from our arrangement with TD Bank Group (TD).
(a)Includes apparel for women, men, boys, girls, toddlers, infants and newborns, as well as jewelry, accessories, and shoes. (b)Includes beauty and personal care, baby gear, cleaning, paper products, and pet supplies. (c)Includes dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, produce, and food service in our stores. (d)Includes electronics (including video game hardware and software), toys, entertainment, sporting goods, and luggage. (e)Includes furniture, lighting, storage, kitchenware, small appliances, home décor, bed and bath, home improvement, school/office supplies, greeting cards and party supplies, and other seasonal merchandise. Merchandise sales – We record almost all retail store revenues at the point of sale. Digitally originated sales may include shipping revenue and are recorded upon delivery to the guest or upon guest pickup at the store. Sales are recognized net of expected returns, which we estimate using historical return patterns and our expectation of future returns. As of August 1, 2020, February 1, 2020, and August 3, 2019, the accrual for estimated returns was $201 million, $117 million, and $131 million, respectively. Other than as described below, we have not historically had notable adjustments to our returns estimates. From March 26, 2020 to April 26, 2020, we did not accept in-store merchandise returns and exchanges to protect our team members from COVID-19. We lengthened the return period for merchandise affected by this change. Our returns estimate for sales during the suspension period included significant assumptions, including the impact of the lengthened return period, sales mix, and recent changes in guest returns behavior. At May 2, 2020, the returns reserve totaled $398 million. After resuming guest returns, we received fewer returns than originally expected. During the second quarter, we reduced our estimate of sales returns, which increased sales by $146 million and operating income by $110 million. Revenue from Target gift card sales is recognized upon gift card redemption, which is typically within one year of issuance.
(a)Included in Accrued and Other Current Liabilities. (b)Net of estimated breakage. Credit card profit sharing – We receive payments under a credit card program agreement with TD. Under the agreement, we receive a percentage of the profits generated by the Target Credit Card and Target MasterCard receivables in exchange for performing account servicing and primary marketing functions. TD underwrites, funds, and owns Target Credit Card and Target MasterCard receivables, controls risk management policies, and oversees regulatory compliance.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value measurements are reported in one of three levels reflecting the valuation techniques used to determine fair value.
(a)Represents our investment in Casper Sleep Inc. common stock.
(a)The carrying amounts of certain other current assets, commercial paper, accounts payable, and certain accrued and other current liabilities approximate fair value due to their short-term nature. (b)The fair value of debt is generally measured using a discounted cash flow analysis based on current market interest rates for the same or similar types of financial instruments and would be classified as Level 2. These amounts exclude commercial paper, unamortized swap valuation adjustments, and lease liabilities.
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Property and Equipment |
6 Months Ended |
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Aug. 01, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and EquipmentWe review long-lived assets for impairment when store performance expectations, events, or changes in circumstances—such as a decision to relocate or close a store or distribution center, discontinue projects, or make significant software changes—indicate that the asset’s carrying value may not be recoverable. We recognized impairment charges of $25 million and $60 million during the three and six months ended August 1, 2020, respectively. We recognized impairment charges of $10 million and $13 million during the three and six months ended August 3, 2019, respectively. These impairment charges are included in Selling, General and Administrative Expenses (SG&A). |
Commercial Paper and Long-Term Debt |
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Aug. 01, 2020 | |
Debt Disclosure [Abstract] | |
Commercial Paper and Long-Term Debt | Commercial Paper and Long-Term Debt In March 2020, we issued unsecured fixed rate debt of $1.5 billion at 2.250 percent that matures in April 2025 and $1.0 billion at 2.650 percent that matures in September 2030. We obtain short-term financing from time to time under our commercial paper program. No balances were outstanding at any time during the six months ended August 1, 2020. For the six months ended August 3, 2019, the maximum amount outstanding was $744 million, and the average daily amount outstanding was $74 million at a weighted average annual interest rate of 2.4 percent, with no balance outstanding as of August 3, 2019. In April 2020, we obtained a committed $900 million 364-day unsecured revolving credit facility that expires in April 2021. This new facility is in addition to our $2.5 billion unsecured revolving credit facility that expires in October 2023. No balances were outstanding under either credit facility at any time during 2020 or 2019.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments Our derivative instruments consist of interest rate swaps used to mitigate interest rate risk. As a result, we have counterparty credit exposure to large global financial institutions, which we monitor on an ongoing basis. Note 4 to the Consolidated Financial Statements provides the fair value and classification of these instruments. As of August 1, 2020, and August 3, 2019, we were party to interest rate swaps with notional amounts totaling $1.5 billion. We pay a variable rate and receive a fixed rate under each of these agreements. All of the agreements are designated as fair value hedges, and all were perfectly effective during the three and six months ended August 1, 2020, and August 3, 2019. As of August 1, 2020, we were party to forward-starting interest rate swaps with notional amounts totaling $250 million to hedge the interest rate exposure of anticipated future debt issuances. We designated these derivative financial instruments as cash flow hedges. We assess, both at inception and on an ongoing basis, whether the derivative financial instrument is highly effective in offsetting changes in cash flows of the hedged item and whether it is probable that the hedged forecasted transaction will occur. As of August 1, 2020, a $12 million loss was recorded in Accumulated Other Comprehensive Loss and will be reclassified to Net Interest Expense when the forecasted transaction affects earnings.
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Share Repurchase |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Repurchase | Share Repurchase We periodically repurchase shares of our common stock under a board-authorized repurchase program through a combination of open market transactions, accelerated share repurchase (ASR) arrangements, and other privately negotiated transactions with financial institutions.
(a)This table includes activity related to the ASR arrangement entered in first quarter 2019 because final settlement occurred in second quarter 2019. Under the ASR arrangement, we repurchased 4.2 million shares for a total cash investment of $340 million. We did not enter into any new ASR arrangements during second quarter 2019. In March 2020, we suspended share repurchase activity.
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Pension Benefits |
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Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Benefits | Pension Benefits We provide pension plan benefits to eligible team members.
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Accumulated Other Comprehensive Loss |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss
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Revenues (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue |
(a)Includes apparel for women, men, boys, girls, toddlers, infants and newborns, as well as jewelry, accessories, and shoes. (b)Includes beauty and personal care, baby gear, cleaning, paper products, and pet supplies. (c)Includes dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, produce, and food service in our stores. (d)Includes electronics (including video game hardware and software), toys, entertainment, sporting goods, and luggage. (e)Includes furniture, lighting, storage, kitchenware, small appliances, home décor, bed and bath, home improvement, school/office supplies, greeting cards and party supplies, and other seasonal merchandise.
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Schedule of Gift Card Liability | Revenue from Target gift card sales is recognized upon gift card redemption, which is typically within one year of issuance.
(a)Included in Accrued and Other Current Liabilities. (b)Net of estimated breakage.
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Measurements - Recurring Basis | Fair value measurements are reported in one of three levels reflecting the valuation techniques used to determine fair value.
(a)Represents our investment in Casper Sleep Inc. common stock.
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Significant Financial Instruments Not Measured at Fair Value |
(a)The carrying amounts of certain other current assets, commercial paper, accounts payable, and certain accrued and other current liabilities approximate fair value due to their short-term nature. (b)The fair value of debt is generally measured using a discounted cash flow analysis based on current market interest rates for the same or similar types of financial instruments and would be classified as Level 2. These amounts exclude commercial paper, unamortized swap valuation adjustments, and lease liabilities.
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Derivative Financial Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of derivatives |
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Share Repurchase (Tables) |
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Schedule of Share Repurchase (excluding ASR) |
(a)This table includes activity related to the ASR arrangement entered in first quarter 2019 because final settlement occurred in second quarter 2019. Under the ASR arrangement, we repurchased 4.2 million shares for a total cash investment of $340 million. We did not enter into any new ASR arrangements during second quarter 2019.
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Pension Benefits (Tables) |
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Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Pension Plan Benefits |
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Accumulated Other Comprehensive Loss (Tables) |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the Changes in Accumulated Other Comprehensive Loss |
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Impact of Coronavirus (COVID-19) (Details) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
May 02, 2020
USD ($)
|
Aug. 01, 2020
merchandiseCategory
|
|
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of core merchandise categories (in merchandise categories) | 5 | |
Coronavirus (COVID-19) | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Number of merchandise categories with significant sales growth | 4 | |
Cost of Sales | Coronavirus (COVID-19) | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Purchase order cancellation fees | $ | $ 216 |
Revenues - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Aug. 01, 2020 |
Aug. 03, 2019 |
Aug. 01, 2020 |
Aug. 03, 2019 |
May 02, 2020 |
Feb. 01, 2020 |
|
Disaggregation of Revenue [Line Items] | ||||||
Reserve | $ 201 | $ 131 | $ 201 | $ 131 | $ 398 | $ 117 |
Revenue | 22,975 | 18,422 | 42,590 | 36,049 | ||
Operating Income (Loss) | 2,300 | $ 1,324 | $ 2,768 | $ 2,458 | ||
Sales returns and allowances | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 146 | |||||
Operating Income (Loss) | $ 110 |
Revenues - Gift Card Liability (Details) $ in Millions |
6 Months Ended |
---|---|
Aug. 01, 2020
USD ($)
| |
Change in Contract with Customer, Liability [Roll Forward] | |
Beginning balance | $ 935 |
Gift Cards Issued During Current Period But Not Redeemed | 315 |
Revenue Recognized From Beginning Liability | (475) |
Ending balance | $ 775 |
Fair Value Measurements - Schedule of Significant Financial Instruments not Measured at Fair Value (Details) - USD ($) $ in Millions |
Aug. 01, 2020 |
Feb. 01, 2020 |
Aug. 03, 2019 |
---|---|---|---|
Carrying Amount | |||
Financial Instruments, Balance Sheet Groupings | |||
Long-term debt, including current portion | $ 12,384 | $ 9,992 | $ 10,244 |
Fair Value | |||
Financial Instruments, Balance Sheet Groupings | |||
Long-term debt, including current portion | $ 15,457 | $ 11,864 | $ 11,635 |
Property and Equipment (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2020 |
Aug. 03, 2019 |
Aug. 01, 2020 |
Aug. 03, 2019 |
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Property, Plant and Equipment [Abstract] | ||||
Impairment charges | $ 25 | $ 10 | $ 60 | $ 13 |
Derivative Financial Instruments - Narrative (Details) - Designated as Hedging Instrument - USD ($) |
6 Months Ended | |
---|---|---|
Aug. 01, 2020 |
Aug. 03, 2019 |
|
Interest Rate Swaps | ||
Derivative Contracts - Effect on Results of Operations (millions) | ||
Notional amount | $ 1,500,000,000 | $ 1,500,000,000 |
Forward-Starting Interest Rate Swap | ||
Derivative Contracts - Effect on Results of Operations (millions) | ||
Notional amount | 250,000,000 | |
Loss to be reclassified | $ 12,000,000 |
Derivative Financial Instruments - Effect of Hedges on Debt (Details) - Long-term debt and other borrowings - USD ($) $ in Millions |
Aug. 01, 2020 |
Feb. 01, 2020 |
Aug. 03, 2019 |
---|---|---|---|
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Carrying amount of hedged debt | $ 1,732 | $ 1,630 | $ 1,600 |
Cumulative hedging adjustments, included in carrying amount | $ 239 | $ 137 | $ 108 |
Derivative Financial Instruments - Effect of Hedges on Net Interest Expense (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2020 |
Aug. 03, 2019 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Interest rate swap designated as fair value hedges | $ 11 | $ 86 | $ 102 | $ 101 |
Hedged debt | (11) | (86) | (102) | (101) |
Total | $ 0 | $ 0 | $ 0 | $ 0 |
Share Repurchase - Schedule of Share Repurchases (excluding ASR) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2020 |
Aug. 03, 2019 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
Equity, Class of Treasury Stock [Line Items] | ||||
Number of shares purchased (in shares) | 0.0 | 4.3 | 5.7 | 7.9 |
Average price paid per share (in dollars per share) | $ 0 | $ 80.02 | $ 107.58 | $ 78.63 |
Total cash investment | $ 0 | $ 341 | $ 609 | $ 618 |
Share Repurchase Program 2019 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Total cash investment | $ 340 | |||
Stock repurchased (in shares) | 4.2 |
Pension Benefits (Details) - Pension Plan - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2020 |
Aug. 03, 2019 |
Aug. 01, 2020 |
Aug. 03, 2019 |
|
Net Pension Benefits Expense | ||||
Service cost benefits earned | $ 25 | $ 23 | $ 51 | $ 46 |
Interest cost on projected benefit obligation | 29 | 37 | 59 | 74 |
Expected return on assets | (60) | (62) | (121) | (124) |
Amortization of losses | 32 | 16 | 64 | 31 |
Amortization of prior service cost | (3) | (3) | (6) | (5) |
Total | $ 23 | $ 11 | $ 47 | $ 22 |
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