Target Corporation

11/27/2024 | Press release | Distributed by Public on 11/27/2024 13:17

Quarterly Report for Quarter Ending November 2, 2024 (Form 10-Q)

tgt-20241102
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 2, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File Number 1-6049
TARGET CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota
(State or other jurisdiction of incorporation or organization)
1000 Nicollet Mall, Minneapolis, Minnesota
(Address of principal executive offices)
41-0215170
(I.R.S. Employer Identification No.)
55403
(Zip Code)
612-304-6073
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common stock, par value $0.0833 per share TGT New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Total shares of common stock, par value $0.0833, outstanding at November 21, 2024, were 458,211,929.
Table of Contents
Index to Notes
TARGET CORPORATION
TABLE OF CONTENTS
PART I
FINANCIAL INFORMATION
Item 1.
Financial Statements (unaudited)
Consolidated Statements of Operations
1
Consolidated Statements of Comprehensive Income
2
Consolidated Statements of Financial Position
3
Consolidated Statements of Cash Flows
4
Consolidated Statements of Shareholders' Investment
5
Notes to Consolidated Financial Statements
8
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
14
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
23
Item 4.
Controls and Procedures
23
PART II
OTHER INFORMATION
Item 1.
Legal Proceedings
24
Item 1A.
Risk Factors
24
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
24
Item 3.
Defaults Upon Senior Securities
24
Item 4.
Mine Safety Disclosures
24
Item 5.
Other Information
24
Item 6.
Exhibits
25
Signatures
26
FINANCIAL STATEMENTS
Table of Contents
Index to Notes
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Operations
Three Months Ended Nine Months Ended
(millions, except per share data) (unaudited) November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023
Sales $ 25,228 $ 25,004 $ 74,392 $ 74,336
Other revenue 440 394 1,259 1,157
Total revenue 25,668 25,398 75,651 75,493
Cost of sales 18,375 18,149 53,623 54,333
Selling, general and administrative expenses 5,486 5,316 16,046 15,525
Depreciation and amortization (exclusive of depreciation included in cost of sales) 639 616 1,883 1,793
Operating income 1,168 1,317 4,099 3,842
Net interest expense 105 107 321 395
Net other income (28) (25) (77) (64)
Earnings before income taxes 1,091 1,235 3,855 3,511
Provision for income taxes 237 264 867 755
Net earnings $ 854 $ 971 $ 2,988 $ 2,756
Basic earnings per share $ 1.86 $ 2.10 $ 6.47 $ 5.97
Diluted earnings per share $ 1.85 $ 2.10 $ 6.45 $ 5.96
Weighted average common shares outstanding
Basic 460.1 461.6 461.6 461.4
Diluted 461.5 462.6 462.9 462.7
Antidilutive shares 0.5 3.0 0.5 2.6
See accompanying Notes to Consolidated Financial Statements.
TARGET CORPORATION Q3 2024 Form 10-Q
1
FINANCIAL STATEMENTS
Table of Contents
Index to Notes
Consolidated Statements of Comprehensive Income
Three Months Ended Nine Months Ended
(millions) (unaudited) November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023
Net earnings $ 854 $ 971 $ 2,988 $ 2,756
Other comprehensive (loss) / income, net of tax
Pension benefit liabilities - - - 3
Cash flow hedges and currency translation adjustment (4) (5) (14) (14)
Other comprehensive loss (4) (5) (14) (11)
Comprehensive income $ 850 $ 966 $ 2,974 $ 2,745
See accompanying Notes to Consolidated Financial Statements.
TARGET CORPORATION Q3 2024 Form 10-Q
2
FINANCIAL STATEMENTS
Table of Contents
Index to Notes
Consolidated Statements of Financial Position
(millions, except footnotes) (unaudited) November 2, 2024 February 3,
2024 		October 28,
2023
Assets
Cash and cash equivalents $ 3,433 $ 3,805 $ 1,910
Inventory 15,165 11,886 14,731
Other current assets 1,956 1,807 1,958
Total current assets 20,554 17,498 18,599
Property and equipment
Land 6,666 6,547 6,520
Buildings and improvements 38,666 37,066 36,627
Fixtures and equipment 8,840 8,765 8,490
Computer hardware and software 3,549 3,428 3,312
Construction-in-progress 758 1,703 2,000
Accumulated depreciation (25,548) (24,413) (23,781)
Property and equipment, net 32,931 33,096 33,168
Operating lease assets 3,513 3,362 3,086
Other noncurrent assets 1,533 1,400 1,376
Total assets $ 58,531 $ 55,356 $ 56,229
Liabilities and shareholders' investment
Accounts payable $ 14,419 $ 12,098 $ 14,291
Accrued and other current liabilities 5,738 6,090 6,099
Current portion of long-term debt and other borrowings 1,635 1,116 1,112
Total current liabilities 21,792 19,304 21,502
Long-term debt and other borrowings 14,346 14,922 14,883
Noncurrent operating lease liabilities 3,418 3,279 3,031
Deferred income taxes 2,419 2,480 2,447
Other noncurrent liabilities 2,067 1,939 1,852
Total noncurrent liabilities 22,250 22,620 22,213
Shareholders' investment
Common stock 38 38 38
Additional paid-in capital 6,916 6,761 6,681
Retained earnings 8,009 7,093 6,225
Accumulated other comprehensive loss (474) (460) (430)
Total shareholders' investment 14,489 13,432 12,514
Total liabilities and shareholders' investment $ 58,531 $ 55,356 $ 56,229
Common StockAuthorized 6,000,000,000 shares, $0.0833 par value; 459,244,995, 461,675,441, and 461,651,176 shares issued and outstanding as of November 2, 2024, February 3, 2024, and October 28, 2023, respectively.
Preferred StockAuthorized 5,000,000 shares, $0.01 par value; no shares were issued or outstanding during any period presented.
See accompanying Notes to Consolidated Financial Statements.
TARGET CORPORATION Q3 2024 Form 10-Q
3
FINANCIAL STATEMENTS
Table of Contents
Index to Notes
Consolidated Statements of Cash Flows
Nine Months Ended
(millions) (unaudited) November 2, 2024 October 28, 2023
Operating activities
Net earnings $ 2,988 $ 2,756
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization 2,215 2,072
Share-based compensation expense 229 176
Deferred income taxes (58) 252
Noncash (gains) / losses and other, net (1) 101
Changes in operating accounts:
Inventory (3,279) (1,232)
Other assets (265) (208)
Accounts payable 2,362 887
Accrued and other liabilities (113) 528
Cash provided by operating activities
4,078 5,332
Investing activities
Expenditures for property and equipment (1,968) (3,952)
Proceeds from disposal of property and equipment 2 24
Other investments 24 18
Cash required for investing activities (1,942) (3,910)
Financing activities
Additions to long-term debt 741 -
Reductions of long-term debt (1,112) (114)
Dividends paid (1,533) (1,503)
Repurchase of stock (506) -
Shares withheld for taxes on share-based compensation (98) (124)
Cash required for financing activities (2,508) (1,741)
Net decrease in cash and cash equivalents (372) (319)
Cash and cash equivalents at beginning of period 3,805 2,229
Cash and cash equivalents at end of period $ 3,433 $ 1,910
Supplemental information
Leased assets obtained in exchange for new finance lease liabilities $ 312 $ 86
Leased assets obtained in exchange for new operating lease liabilities 416 679
See accompanying Notes to Consolidated Financial Statements.
TARGET CORPORATION Q3 2024 Form 10-Q
4
FINANCIAL STATEMENTS
Table of Contents
Index to Notes
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
January 28, 2023 460.3 $ 38 $ 6,608 $ 5,005 $ (419) $ 11,232
Net earnings - - - 950 - 950
Other comprehensive loss - - - - (3) (3)
Dividends declared - - - (507) - (507)
Stock options and awards 1.3 - (67) - - (67)
April 29, 2023 461.6 $ 38 $ 6,541 $ 5,448 $ (422) $ 11,605
Net earnings - - - 835 - 835
Other comprehensive loss - - - - (3) (3)
Dividends declared - - - (516) - (516)
Stock options and awards - - 69 - - 69
July 29, 2023 461.6 $ 38 $ 6,610 $ 5,767 $ (425) $ 11,990
Net earnings - - - 971 - 971
Other comprehensive loss - - - - (5) (5)
Dividends declared - - - (513) - (513)
Stock options and awards 0.1 - 71 - - 71
October 28, 2023 461.7 $ 38 $ 6,681 $ 6,225 $ (430) $ 12,514
Net earnings - - - 1,382 - 1,382
Other comprehensive loss - - - - (30) (30)
Dividends declared - - - (514) - (514)
Stock options and awards - - 80 - - 80
February 3, 2024 461.7 $ 38 $ 6,761 $ 7,093 $ (460) $ 13,432
TARGET CORPORATION Q3 2024 Form 10-Q
5
FINANCIAL STATEMENTS
Table of Contents
Index to Notes
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 3, 2024 461.7 $ 38 $ 6,761 $ 7,093 $ (460) $ 13,432
Net earnings - - - 942 - 942
Other comprehensive loss - - - - (5) (5)
Dividends declared - - - (516) - (516)
Stock options and awards 0.9 1 (14) - - (13)
May 4, 2024 462.6 $ 39 $ 6,747 $ 7,519 $ (465) $ 13,840
Net earnings - - - 1,192 - 1,192
Other comprehensive loss - - - - (5) (5)
Dividends declared - - - (527) - (527)
Repurchase of stock (1.1) (1) - (154) - (155)
Stock options and awards 0.1 - 84 - - 84
August 3, 2024 461.6 $ 38 $ 6,831 $ 8,030 $ (470) $ 14,429
Net earnings - - - 854 - 854
Other comprehensive loss
- - - - (4) (4)
Dividends declared - - - (521) - (521)
Repurchase of stock (2.4) - - (354) - (354)
Stock options and awards - - 85 - - 85
November 2, 2024 459.2 $ 38 $ 6,916 $ 8,009 $ (474) $ 14,489
We declared $1.12 and $1.10 dividends per share for the three months ended November 2, 2024, and October 28, 2023, respectively, and $4.38 per share for the fiscal year ended February 3, 2024.
See accompanying Notes to Consolidated Financial Statements.
TARGET CORPORATION Q3 2024 Form 10-Q
6
FINANCIAL STATEMENTS
Table of Contents
INDEX
Index to Notes
INDEX TO NOTES
Notes to Consolidated Financial Statements
8
Note 1
Accounting Policies
8
Note 2
Revenue
9
Note 3
Fair Value Measurements
10
Note 4
Property and Equipment
11
Note 5
Supplier Finance Programs
11
Note 6
Commercial Paper and Long-Term Debt
11
Note 7
Derivative Financial Instruments
11
Note 8
Share Repurchase
12
Note 9
Pension Benefits
12
Note 10
Accumulated Other Comprehensive Income (Loss)
13
TARGET CORPORATION Q3 2024 Form 10-Q
7
FINANCIAL STATEMENTS
Table of Contents
NOTES
Index to Notes
Notes to Consolidated Financial Statements (unaudited)
1. Accounting Policies
These unaudited condensed consolidated financial statements are prepared in accordance with the rules and regulations of the Securities and Exchange Commission 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 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 most recent Form 10-K.
We use the same accounting policies in preparing quarterly and annual financial statements.
We operate as a single segment that is 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.
TARGET CORPORATION Q3 2024 Form 10-Q
8
FINANCIAL STATEMENTS
Table of Contents
NOTES
Index to Notes
2. Revenue
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).
Revenue Three Months Ended Nine Months Ended
(millions) November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023
Apparel & accessories (a)
$ 4,003 $ 4,007 $ 12,161 $ 12,075
Beauty (b)
3,226 3,013 9,729 9,114
Food & beverage (c)
5,917 5,736 17,308 17,125
Hardlines (d)
3,152 3,192 9,634 9,966
Home furnishings & décor (e)
4,185 4,420 11,612 12,230
Household essentials (f)
4,715 4,606 13,828 13,700
Other 30 30 120 126
Sales 25,228 25,004 74,392 74,336
Credit card profit sharing 148 165 433 508
Other 292 229 826 649
Other revenue 440 394 1,259 1,157
Total revenue $ 25,668 $ 25,398 $ 75,651 $ 75,493
(a)Includes apparel for women, men, young adults, kids, toddlers, and babies, as well as jewelry, accessories, and shoes.
(b)Includes skin and bath care, cosmetics, hair care, oral care, deodorant, and shaving products.
(c)Includes dry and perishable grocery, including snacks, candy, beverages, deli, bakery, meat, produce and food service (primarily Starbucks) in our stores.
(d)Includes electronics, including video games and consoles, toys, sporting goods, entertainment, and luggage.
(e)Includes bed and bath, home décor, school/office supplies, storage, small appliances, kitchenware, greeting cards, party supplies, furniture, lighting, home improvement, and seasonal merchandise.
(f)Includes household cleaning, paper products, over-the-counter healthcare, vitamins and supplements, baby gear, and pet supplies.
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 November 2, 2024, February 3, 2024, and October 28, 2023, the accrual for estimated returns was $204 million, $170 million, and $207 million, respectively.
Revenue from Target gift card sales is recognized upon gift card redemption, which is typically within one year of issuance.
Gift Card Liability Activity February 3,
2024
Gift Cards Issued During Current Period But Not Redeemed (b)
Revenue Recognized From Beginning Liability November 2,
2024
(millions)
Gift card liability (a)
$ 1,162 $ 493 $ (711) $ 944
(a)Included in Accrued and Other Current Liabilities.
(b)Net of estimated breakage.
TARGET CORPORATION Q3 2024 Form 10-Q
9
FINANCIAL STATEMENTS
Table of Contents
NOTES
Index to Notes
Other Revenue
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 Circle credit card receivables in exchange for performing account servicing and primary marketing functions. TD underwrites, funds, and owns Target Circle credit card receivables, controls risk management policies, and oversees regulatory compliance.
Other- Includes advertising revenue, commissions earned on third-party sales through Target.com, Shipt membership and service revenues, rental income, and other miscellaneous revenues.
3. Fair Value Measurements
Fair value measurements are reported in one of three levels reflecting the significant inputs used to determine fair value.
Financial Instruments Measured On a Recurring Basis Fair Value
(millions) Classification Measurement Level November 2, 2024 February 3, 2024 October 28, 2023
Assets
Short-term investments Cash and Cash Equivalents Level 1 $ 2,456 $ 2,897 $ 1,004
Prepaid forward contracts Other Current Assets Level 1 26 25 18
Liabilities
Interest rate swaps Other Current Liabilities Level 2 - 3 7
Interest rate swaps Other Noncurrent Liabilities Level 2 105 123 190
Significant Financial Instruments Not Measured at Fair Value (a)
(millions)
November 2, 2024 February 3, 2024 October 28, 2023
Carrying
Amount 		Fair
Value 		Carrying
Amount 		Fair
Value 		Carrying
Amount 		Fair
Value
Long-term debt, including current portion (b)
$ 13,901 $ 13,029 $ 14,151 $ 13,467 $ 14,149 $ 12,485
(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, fair value hedge adjustments, and lease liabilities.
TARGET CORPORATION Q3 2024 Form 10-Q
10
FINANCIAL STATEMENTS
Table of Contents
NOTES
Index to Notes
4. Property and Equipment
We 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, office, or distribution center, discontinue a project, or make significant software changes-indicate that the asset's carrying value may not be recoverable. We recognized impairment charges of $1 million and $37 million for the three and nine months ended November 2, 2024, and $64 million and $98 million for the three and nine months ended October 28, 2023. These impairment charges are included in Selling, General and Administrative (SG&A) Expenses.
5. Supplier Finance Programs
We have arrangements with several financial institutions to act as our paying agents to certain vendors. The arrangements also permit the financial institutions to provide vendors with an option, at our vendors' sole discretion, to sell their receivables from Target to the financial institutions. A vendor's election to receive early payment at a discounted amount from the financial institutions does not change the amount that we must remit to the financial institutions or our payment date, which is up to 120 days from the invoice date.
We do not pay any fees or pledge any security to these financial institutions under these arrangements. The arrangements can be terminated by either party with notice ranging up to 120 days.
Our outstanding vendor obligations eligible for early payment under these arrangements totaled $4.7 billion, $3.4 billion, and $4.5 billion as of November 2, 2024, February 3, 2024, and October 28, 2023, respectively, and are included within Accounts Payable on our Consolidated Statements of Financial Position. Our outstanding vendor obligations do not represent actual receivables sold by our vendors to the financial institutions, which have historically been lower.
6. Commercial Paper and Long-Term Debt
In September 2024, we issued $750 million of unsecured debt with a fixed rate of 4.5 percent that matures in September 2034.
We obtain short-term financing from time to timeunder our commercial paper program. There was no commercial paper outstanding at any time during the three and nine months ended November 2, 2024, or during the three months ended October 28, 2023. For the nine months ended October 28, 2023, the maximum amount outstanding was $90 million, and the average daily amount outstanding was $1 million, at a weighted average annual interest rate of 4.8 percent.
In October 2024, we obtained a new committed $1.0 billion 364-day unsecured revolving credit facility that will expire in October 2025 and terminated our prior 364-day facility. No balances were outstanding under our credit facilities at any time during 2024 or 2023.
7. 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 3to the Consolidated Financial Statements provides the fair value and classification of these instruments.
We were party to interest rate swaps with notional amounts totaling $2.20 billion as of November 2, 2024, and $2.45 billion as of both February 3, 2024, and October 28, 2023. We pay a floating rate and receive a fixed rate under each of these agreements. All of the agreements are designated as fair value hedges, and all were considered to be perfectly effective under the shortcut method during the three and nine months ended November 2, 2024, and October 28, 2023.
TARGET CORPORATION Q3 2024 Form 10-Q
11
FINANCIAL STATEMENTS
Table of Contents
NOTES
Index to Notes
Effect of Hedges on Debt
(millions)
November 2, 2024 February 3, 2024 October 28, 2023
Long-term debt and other borrowings
Carrying amount of hedged debt $ 2,088 $ 2,316 $ 2,245
Cumulative hedging adjustments, included in carrying amount (105) (126) (197)
Effect of Hedges on Net Interest Expense Three Months Ended Nine Months Ended
(millions) November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023
Gain (loss) on fair value hedges recognized in Net Interest Expense
Interest rate swaps designated as fair value hedges $ (26) $ (60) $ 21 $ (123)
Hedged debt 26 60 (21) 123
Gain on cash flow hedges recognized in Net Interest Expense 6 6 18 18
Total $ 6 $ 6 $ 18 $ 18
8. 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 arrangements, and other privately negotiated transactions with financial institutions.
Share Repurchase Activity Three Months Ended Nine Months Ended
(millions, except per share data) November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023
Number of shares purchased 2.4 - 3.5 -
Average price paid per share $ 147.43 $ - $ 146.97 $ -
Total investment $ 354 $ - $ 509 $ -
9. Pension Benefits
We provide pension plan benefits to eligible team members.
Net Pension Benefits Expense Three Months Ended Nine Months Ended
(millions) Classification November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023
Service cost benefits earned SG&A Expenses $ 19 $ 19 $ 58 $ 58
Interest cost on projected benefit obligation Net Other Income 41 42 124 125
Expected return on assets Net Other Income (69) (67) (209) (201)
Amortization of losses Net Other Income - - - 1
Prior service cost Net Other Income - - 8 11
Total $ (9) $ (6) $ (19) $ (6)
TARGET CORPORATION Q3 2024 Form 10-Q
12
FINANCIAL STATEMENTS
Table of Contents
NOTES
Index to Notes
10. Accumulated Other Comprehensive Income (Loss)
Change in Accumulated Other Comprehensive Income (Loss) Cash Flow Hedges Currency Translation Adjustment Pension Total
(millions)
February 3, 2024 $ 283 $ (24) $ (719) $ (460)
Other comprehensive income (loss) before reclassifications, net of tax - (1) - (1)
Amounts reclassified from AOCI, net of tax (13) - - (13)
November 2, 2024 $ 270 $ (25) $ (719) $ (474)
TARGET CORPORATION Q3 2024 Form 10-Q
13
MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
FINANCIAL SUMMARY
Index to Notes
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Financial Summary
Third quarter 2024 included the following notable items:
•GAAP and adjusted diluted earnings per share (Adjusted EPS) were $1.85.
•Total revenue was $25.7 billion, an increase of 1.1 percent from the comparable prior-year period, reflecting a total sales increase of 0.9 percent and a 11.5 percent increase in other revenue.
•Comparable sales increased 0.3 percent, reflecting a 2.4 percent increase in traffic and a 2.0 percent decrease in average transaction amount.
◦Comparable stores-originated sales declined 1.9 percent.
◦Comparable digitally-originated sales increased 10.8 percent.
•Operating income of $1.2 billion was 11.2 percent lower than the comparable prior-year period.
Earnings Per Share Three Months Ended Nine Months Ended
November 2, 2024 October 28, 2023 Change November 2, 2024 October 28, 2023 Change
GAAP and Adjusted EPS $ 1.85 $ 2.10 (11.9) % $ 6.45 $ 5.96 8.3 %
Note: Adjusted EPS, a non-GAAP metric, excludes the impact of certain items when applicable. However, there are no adjustments in any period presented. Management believes that Adjusted EPS is useful in providing period-to-period comparisons of the results of our operations. A reconciliation of non-GAAP financial measures to GAAP measures is provided on page 19.
We report after-tax return on invested capital (ROIC) because we believe ROIC provides a meaningful measure of our capital allocation effectiveness over time. For the trailing twelve months ended November 2, 2024, after-tax ROIC was 15.9 percent,compared with 13.9 percent for the trailing twelve months ended October 28, 2023. The calculation of ROIC is provided on page 20.
TARGET CORPORATION Q3 2024 Form 10-Q
14
MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
ANALYSIS OF RESULTS OF OPERATIONS
Index to Notes
Analysis of Results of Operations
Summary of Operating Income Three Months Ended Nine Months Ended
(dollars in millions) November 2, 2024 October 28, 2023 Change November 2, 2024 October 28, 2023 Change
Sales $ 25,228 $ 25,004 0.9 % $ 74,392 $ 74,336 0.1 %
Other revenue 440 394 11.5 1,259 1,157 8.8
Total revenue 25,668 25,398 1.1 75,651 75,493 0.2
Cost of sales 18,375 18,149 1.2 53,623 54,333 (1.3)
SG&A expenses 5,486 5,316 3.2 16,046 15,525 3.4
Depreciation and amortization (exclusive of depreciation included in cost of sales) 639 616 3.6 1,883 1,793 5.0
Operating income $ 1,168 $ 1,317 (11.2) % $ 4,099 $ 3,842 6.7 %
Rate Analysis Three Months Ended Nine Months Ended
November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023
Gross margin rate 27.2 % 27.4 % 27.9 % 26.9 %
SG&A expense rate 21.4 20.9 21.2 20.6
Depreciation and amortization expense rate (exclusive of depreciation included in cost of sales) 2.5 2.4 2.5 2.4
Operating income margin rate 4.6 5.2 5.4 5.1
Note: Gross margin rate is calculated as gross margin (sales less cost of sales) divided by sales. All other rates are calculated by dividing the applicable amount by total revenue.
Sales
Sales include all merchandise sales, net of expected returns, and our estimate of gift card breakage. We use comparable sales to evaluate the performance of our stores and digital channel sales by measuring the change in sales for a period over the comparable prior-year period of equivalent length. Comparable sales include all sales, except sales from stores open less than 13 months, digital acquisitions we have owned less than 13 months, stores that have been closed, and digital acquisitions that we no longer operate. Comparable sales measures vary across the retail industry. As a result, our comparable sales calculation is not necessarily comparable to similarly titled measures reported by other companies. Digitally originated sales include all sales initiated through mobile applications and our websites. Our stores fulfill the majority of digitally originated sales, including shipment from stores to guests, store Order Pickup or Drive Up, and delivery via Shipt. Digitally originated sales may also be fulfilled through our distribution centers, our vendors, or other third parties.
Sales growth-from both comparable sales and new stores-represents an important driver of our long-term profitability. We expect that comparable sales growth will drive the majority of our total sales growth. We believe that our ability to successfully differentiate our guests' shopping experience through a careful combination of merchandise assortment, price, convenience, guest experience, and other factors will, over the long-term, drive both increasing shopping frequency (number of transactions, or "traffic") and the amount spent each visit (average transaction amount).
TARGET CORPORATION Q3 2024 Form 10-Q
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MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
ANALYSIS OF RESULTS OF OPERATIONS
Index to Notes
Comparable Sales Three Months Ended Nine Months Ended
November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023
Comparable sales change 0.3 % (4.9) % (0.5) % (3.5) %
Drivers of change in comparable sales
Number of transactions (traffic) 2.4 (4.1) 1.1 (2.7)
Average transaction amount (2.0) (0.8) (1.6) (0.8)
Comparable Sales by Channel Three Months Ended Nine Months Ended
November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023
Stores originated comparable sales change (1.9) % (4.6) % (2.0) % (2.8) %
Digitally originated comparable sales change 10.8 (6.0) 6.9 (6.7)
Sales by Channel Three Months Ended Nine Months Ended
November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023
Stores originated 81.5 % 83.2 % 81.8 % 82.9 %
Digitally originated 18.5 16.8 18.2 17.1
Total 100 % 100 % 100 % 100 %
Sales by Fulfillment Channel Three Months Ended Nine Months Ended
November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023
Stores 97.7 % 97.7 % 97.8 % 97.5 %
Other 2.3 2.3 2.2 2.5
Total 100 % 100 % 100 % 100 %
Note: Sales fulfilled by stores include in-store purchases and digitally originated sales fulfilled by shipping merchandise from stores to guests, Order Pickup, Drive Up, and Shipt.
Sales by Product Category Three Months Ended Nine Months Ended
November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023
Apparel & accessories 16 % 16 % 16 % 16 %
Beauty 13 12 13 12
Food & beverage 23 23 23 23
Hardlines 12 13 13 13
Home furnishings & décor 17 18 16 17
Household essentials 19 18 19 19
Total 100 % 100 % 100 % 100 %
Note 2to the Financial Statements provides additional product category sales information. The collective interaction of a broad array of macroeconomic, competitive, and consumer behavioral factors, as well as sales mix and the transfer of sales to new stores, makes further analysis of sales metrics infeasible.
TARGET CORPORATION Q3 2024 Form 10-Q
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MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
ANALYSIS OF RESULTS OF OPERATIONS
Index to Notes
We monitor the percentage of purchases that are paid for using Target Circle Cards™ (Target Circle Card Penetration) because our internal analysis has indicated that a meaningful portion of the incremental purchases on Target Circle Cards are also incremental sales for Target. Guests receive a 5 percent discount on virtually all purchases when they use a Target Circle Card at Target. For the three months ended November 2, 2024 and October 28, 2023, total Target Circle Card Penetration was 17.7 percent and 18.3 percent, respectively. For the nine months ended November 2, 2024 and October 28, 2023, total Target Circle Card Penetration was 17.8 percent and 18.6 percent, respectively.
Gross Margin Rate
Quarter-to-Date
Year-to-Date
For the three months ended November 2, 2024, our gross margin rate was 27.2 percent compared with 27.4 percent in the comparable prior-year period. For the nine months ended November 2, 2024, our gross margin rate was 27.9 percent compared with 26.9 percent in the comparable prior-year period. For both the three and nine months ended November 2, 2024, the changes reflected the net impact of
•higher digital fulfillment & supply chain costs due to
•costs of managing elevated inventory levels during the third quarter, including the impact of receipt timing;
•an increase in digital volume; and
•new supply chain facilities coming online;
•lower book to physical inventory adjustments compared to the prior-year period; and
•merchandising activities, including cost improvements which more than offset higher promotional and clearance markdown rates.
TARGET CORPORATION Q3 2024 Form 10-Q
17
MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
ANALYSIS OF RESULTS OF OPERATIONS
Index to Notes
Selling, General, and Administrative Expense Rate
For the three months ended November 2, 2024, our SG&A expense rate was 21.4 percent compared with 20.9 percent for the comparable prior-year period. For the nine months ended November 2, 2024, our SG&A expense rate was 21.2 percent compared with 20.6 percent for the comparable prior-year period. The increases reflected the net impact of cost increases across our business, including higher team member pay and benefits and higher general liability expenses, partially offset by the benefit of lower store remodel-related expenses.
Store Data
Change in Number of Stores Three Months Ended Nine Months Ended
November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023
Beginning store count 1,966 1,955 1,956 1,948
Opened 13 10 23 21
Closed (1) (9) (1) (13)
Ending store count 1,978 1,956 1,978 1,956
Number of Stores and Number of Stores
Retail Square Feet (a)
Retail Square Feet November 2, 2024 February 3, 2024 October 28, 2023 November 2, 2024 February 3, 2024 October 28, 2023
170,000 or more sq. ft. 273 273 273 48,824 48,824 48,824
50,000 to 169,999 sq. ft. 1,559 1,542 1,542 195,050 192,908 192,877
49,999 or less sq. ft. 146 141 141 4,404 4,207 4,207
Total 1,978 1,956 1,956 248,278 245,939 245,908
(a)In thousands; reflects total square feet less office, supply chain facilities, and vacant space.
Other Performance Factors
Net Interest Expense
Net interest expense was $105 million and $321 million for the three and nine months ended November 2, 2024, respectively, compared with $107 million and $395 million in the comparable prior-year periods. The decrease in net interest expense was primarily due to an increase in interest income.
Provision for Income Taxes
Our effective income tax rates for the three and nine months ended November 2, 2024, were 21.7 percent and 22.5 percent, respectively, compared with 21.3 percent and 21.5 percent in the comparable prior-year periods. The increase in both periods reflects the impact of lower discrete tax benefits compared to the prior-year.
TARGET CORPORATION Q3 2024 Form 10-Q
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MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Index to Notes
Reconciliation of Non-GAAP Financial Measures to GAAP Measures
To provide additional transparency, we disclose non-GAAP Adjusted EPS. When applicable, this metric excludes certain discretely managed items. However, there are no adjustments in any period presented. We believe this information is useful in providing period-to-period comparisons of the results of our operations. This measure is not in accordance with, or an alternative to, U.S. GAAP. The most comparable GAAP measure is diluted earnings per share. Adjusted EPS should not be considered in isolation or as a substitution for analysis of our results as reported in accordance with GAAP. Other companies may calculate Adjusted EPS differently, limiting the usefulness of the measure for comparisons with other companies.
Reconciliation of Non-GAAP Adjusted EPS Three Months Ended Nine Months Ended
November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023
GAAP and Adjusted EPS $ 1.85 $ 2.10 $ 6.45 $ 5.96
Earnings before interest expense and income taxes (EBIT) and earnings before interest expense, income taxes, depreciation, and amortization (EBITDA) are non-GAAP financial measures. We believe these measures provide meaningful information about our operational efficiency compared with our competitors by excluding the impact of differences in tax jurisdictions and structures, debt levels, and, for EBITDA, capital investment. These measures are not in accordance with, or an alternative to, GAAP. The most comparable GAAP measure is net earnings. EBIT and EBITDA should not be considered in isolation or as a substitution for analysis of our results as reported in accordance with GAAP. Other companies may calculate EBIT and EBITDA differently, limiting the usefulness of the measures for comparisons with other companies.
EBIT and EBITDA Three Months Ended Nine Months Ended
(dollars in millions) November 2, 2024 October 28, 2023 Change November 2, 2024 October 28, 2023 Change
Net earnings $ 854 $ 971 (12.1) % $ 2,988 $ 2,756 8.4 %
+ Provision for income taxes 237 264 (9.9) 867 755 14.9
+ Net interest expense 105 107 (1.5) 321 395 (18.7)
EBIT $ 1,196 $ 1,342 (10.8) % $ 4,176 $ 3,906 6.9 %
+ Total depreciation and amortization (a)
754 722 4.2 2,215 2,072 6.8
EBITDA $ 1,950 $ 2,064 (5.5) % $ 6,391 $ 5,978 6.9 %
(a)Represents total depreciation and amortization, including amounts classified within Depreciation and Amortization and within Cost of Sales.
TARGET CORPORATION Q3 2024 Form 10-Q
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MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Index to Notes
We have also disclosed after-tax ROIC, which is a ratio based on GAAP information, with the exception of the add-back of operating lease interest to operating income. We believe this metric is useful in assessing the effectiveness of our capital allocation over time. Other companies may calculate ROIC differently, limiting the usefulness of the measure for comparisons with other companies.
After-Tax Return on Invested Capital
(dollars in millions)
Trailing Twelve Months
Numerator
November 2, 2024 (a)
October 28, 2023
Operating income $ 5,964 $ 5,001
+ Net other income 105 79
EBIT 6,069 5,080
+ Operating lease interest (b)
157 106
- Income taxes (c)
1,403 1,050
Net operating profit after taxes $ 4,823 $ 4,136
Denominator November 2, 2024 October 28, 2023 October 29, 2022
Current portion of long-term debt and other borrowings $ 1,635 $ 1,112 $ 2,207
+ Noncurrent portion of long-term debt 14,346 14,883 14,237
+ Shareholders' investment 14,489 12,514 11,019
+ Operating lease liabilities (d)
3,765 3,351 2,879
- Cash and cash equivalents 3,433 1,910 954
Invested capital $ 30,802 $ 29,950 $ 29,388
Average invested capital (e)
$ 30,376 $ 29,670
After-tax return on invested capital 15.9 % 13.9 %
(a)The trailing twelve months ended November 2, 2024, consisted of 53 weeks compared with 52 weeks in the prior-year period.
(b)Represents the add-back to operating income driven by the hypothetical interest expense we would incur if the property under our operating leases were owned or accounted for as finance leases. Calculated using the discount rate for each lease and recorded as a component of rent expense within Operating Income. Operating lease interest is added back to Operating Income in the ROIC calculation to control for differences in capital structure between us and our competitors.
(c)Calculated using the effective tax rates, which were22.5 percentand 20.3 percent for the trailing twelve months ended November 2, 2024 and October 28, 2023, respectively. For the trailing twelve months ended November 2, 2024 and October 28, 2023, includes tax effect of $1.4 billion and $1.0 billion, respectively, related to EBIT and $35 million and $22 million, respectively, related to operating lease interest.
(d)Total short-term and long-term operating lease liabilities included within Accrued and Other Current Liabilities and Noncurrent Operating Lease Liabilities, respectively.
(e)Average based on the invested capital at the end of the current period and the invested capital at the end of the comparable prior period.
TARGET CORPORATION Q3 2024 Form 10-Q
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MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
ANALYSIS OF FINANCIAL CONDITION
Index to Notes
Analysis of Financial Condition
Liquidity and Capital Resources
Capital Allocation
We follow a disciplined and balanced approach to capital allocation based on the following priorities, ranked in order of importance: first, we fully invest in opportunities to profitably grow our business, create sustainable long-term value, and maintain our current operations and assets; second, we maintain a competitive quarterly dividend and seek to grow it annually; and finally, we return any excess cash to shareholders by repurchasing shares within the limits of our credit rating goals.
Our cash and cash equivalents balance was $3.4 billion, $3.8 billion, and $1.9 billion as of November 2, 2024, February 3, 2024, and October 28, 2023, respectively. Our cash and cash equivalents balance includes short-term investments of $2.5 billion, $2.9 billion, and $1.0 billion as of November 2, 2024, February 3, 2024, and October 28, 2023, respectively. Our investment policy is designed to preserve principal and liquidity of our short-term investments. This policy allows investments in large money market funds or in highly-rated direct short-term instruments that mature in 60 days or less. We also place dollar limits on our investments in individual funds or instruments.
Operating Cash Flows
Cash flows provided by operating activities were $4.1 billion and $5.3 billion for the nine months ended November 2, 2024, and October 28, 2023, respectively. The operating cash flow decrease is primarily due to increased inventory levels and slightly lower accounts payable leverage, in addition to higher income tax and incentive compensation payments.
Inventory
Inventory was $15.2 billion as of November 2, 2024, compared with $11.9 billion and $14.7 billion as of February 3, 2024, and October 28, 2023, respectively. The increase from February 3, 2024, primarily reflects the seasonal inventory build ahead of the November and December holiday sales period. The increase from October 28, 2023, primarily reflects the impact of lower-than-expected sales in certain discretionary categories during the three months ended November 2, 2024, as well as an improved in-stock position.
Investing Cash Flows
Cash required for investing activities decreased to $1.9 billion for the nine months ended November 2, 2024, compared to $3.9 billion for the nine months ended October 28, 2023, due to lower capital investments.
Dividends
We paid dividends totaling $516 million ($1.12 per share) and $1.5 billion ($3.32 per share) for the three and nine months ended November 2, 2024, respectively, and $507 million ($1.10 per share) and $1.5 billion ($3.26 per share) for the three and nine months ended October 28, 2023, respectively, a per share increase of 1.8 percent. We declared dividends totaling $521 million ($1.12 per share) during the third quarter of 2024 and $513 million ($1.10 per share) during the third quarter of 2023, a per share increase of 1.8 percent. We have paid dividends every quarter since our 1967 initial public offering, and it is our intent to continue to do so in the future.
Share Repurchase
We deployed $509 million to repurchase shares during the nine months ended November 2, 2024. See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceedsof this Quarterly Report on Form 10-Q and Note 8to the Financial Statements for more information.
TARGET CORPORATION Q3 2024 Form 10-Q
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MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
ANALYSIS OF FINANCIAL CONDITION
Index to Notes
Financing
Our financing strategy is to ensure liquidity and access to capital markets, to maintain a balanced spectrum of debt maturities, and to manage our net exposure to floating interest rate volatility. Within these parameters, we seek to minimize our borrowing costs. Our ability to access the long-term debt and commercial paper markets has provided us with ample sources of liquidity. Our continued access to these markets depends on multiple factors, including the condition of debt capital markets, our operating performance, and maintaining strong credit ratings. As of November 2, 2024, our credit ratings were as follows:
Credit Ratings Moody's Standard and Poor's Fitch
Long-term debt A2 A A
Commercial paper P-1 A-1 F1
If our credit ratings were lowered, our ability to access the debt markets, our cost of funds, and other terms for new debt issuances could be adversely impacted. Each of the credit rating agencies reviews its rating periodically, and there is no guarantee our current credit ratings will remain the same as described above.
In September 2024, we issued $750 million of debt. Note 6to the Financial Statements provides additional information.
We have the ability to obtain short-term financing from time to time under our commercial paper program and credit facilities. In October 2024, we obtained a new committed $1.0 billion 364-day unsecured revolving credit facility that will expire in October 2025 and terminated our prior 364-day credit facility. This credit facility and our $3.0 billion unsecured revolving credit facility that will expire in October 2028 backstop our commercial paper program. No balances were outstanding under either credit facility at any time during 2024 or 2023. There was no commercial paper outstanding as of either November 2, 2024 or October 28, 2023. Note 6to the Financial Statements provides additional information.
Most of our long-term debt obligations contain covenants related to secured debt levels. In addition to a secured debt level covenant, our credit facilities also contain a debt leverage covenant. We are, and expect to remain, in compliance with these covenants. Additionally, as of November 2, 2024, no notes or debentures contained provisions requiring acceleration of payment upon a credit rating downgrade, except that certain outstanding notes allow the note holders to put the notes to us if within a matter of months of each other we experience both (i) a change in control and (ii) our long-term credit ratings are either reduced and the resulting rating is non-investment grade, or our long-term credit ratings are placed on watch for possible reduction and those ratings are subsequently reduced and the resulting rating is non-investment grade.
We believe our sources of liquidity, namely operating cash flows, credit facility capacity, and access to capital markets, will continue to be adequate to meet our contractual obligations, working capital, and planned capital expenditures, finance anticipated expansion and strategic initiatives, fund debt maturities, pay dividends, and execute purchases under our share repurchase program for the foreseeable future.
New Accounting Pronouncements
We do not expect any recently issued accounting pronouncements to have a material effect on our financial statements.
TARGET CORPORATION Q3 2024 Form 10-Q
22
MANAGEMENT'S DISCUSSION AND ANALYSIS & SUPPLEMENTAL INFORMATION
Table of Contents
FORWARD LOOKING STATEMENTS & CONTROLS AND PROCEDURES
Index to Notes
Forward-Looking Statements
This report contains forward-looking statements, which are based on our current assumptions and expectations. These statements are typically accompanied by the words "anticipate," "believe," "could," "expect," "may," "might," "seek," "will," "would," or similar words. The principal forward-looking statements in this report include statements regarding: our future financial and operational performance, the adequacy of and costs associated with our sources of liquidity, the funding of debt maturities, the execution of our share repurchase program, our expected capital expenditures and new lease commitments, the expected compliance with debt covenants, the expected impact of new accounting pronouncements, our intentions regarding future dividends, the expected return on plan assets, the expected outcome of, and adequacy of our reserves for, claims, litigation, and the resolution of tax matters, and changes in our assumptions and expectations.
All such forward-looking statements are intended to enjoy the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended. Although we believe there is a reasonable basis for the forward-looking statements, our actual results could be materially different. The most important factors which could cause our actual results to differ from our forward-looking statements are set forth in our description of risk factors included in Part I, Item 1A, Risk Factors of our Form 10-Kfor the fiscal year ended February 3, 2024, which should be read in conjunction with the forward-looking statements in this report. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update any forward-looking statement.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in our primary risk exposures or management of market risks from those disclosed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk of our Form 10-Kfor the fiscal year ended February 3, 2024.
Item 4. Controls and Procedures
Changes in Internal Control Over Financial Reporting
There were no changes during the most recent fiscal quarter which materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this quarterly report, we conducted an evaluation, under supervision and with the participation of management, including the chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934, as amended (Exchange Act). Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective at a reasonable assurance level. Disclosure controls and procedures are defined by Rules 13a-15(e) and 15d-15(e) of the Exchange Act as controls and other procedures that are designed to ensure that information required to be disclosed by us in reports filed with the SEC under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
TARGET CORPORATION Q3 2024 Form 10-Q
23
SUPPLEMENTAL INFORMATION
Table of Contents
Index to Notes
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On November 15, 2024, the United States District Court for the District of Minnesota dismissed the purported federal securities law class action relating to certain prior disclosures of Target about its business model, strategy, and inventory. This proceeding was previously disclosed in Target's Annual Report on Form 10-K for the year ended February 3, 2024, and Target's Quarterly Report on Form 10-Q for the quarter ended April 29, 2023.
Item 1A. Risk Factors
There have been no material changes to the risk factors described in Part I, Item 1A, Risk Factors of our Form 10-Kfor the fiscal year ended February 3, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On August 11, 2021, our Board of Directors authorized a $15 billion share repurchase program with no stated expiration. Under the program, we have repurchased 27.3 million shares of common stock for a total investment of $5.8 billion. The table below presents information with respect to Target common stock purchases made during the three months ended November 2, 2024, by Target or any "affiliated purchaser" of Target, as defined in Rule 10b-18(a)(3) under the Exchange Act.
Share Repurchase Activity Total Number
of Shares
Purchased 		Average
Price
Paid per
Share 		Total Number of
Shares Purchased
as Part of Publicly Announced Programs 		Dollar Value of
Shares that May
Yet Be Purchased
Under Publicly Announced Programs
Period
August 4, 2024 through August 31, 2024
Open market and privately negotiated purchases 1,198,758 $ 142.56 1,198,758 $ 9,354,476,292
September 1, 2024 through October 5, 2024
Open market and privately negotiated purchases 1,201,693 152.28 1,201,693 9,171,483,556
October 6, 2024 through November 2, 2024
Open market and privately negotiated purchases - - - 9,171,483,556
Total 2,400,451 $ 147.43 2,400,451 $ 9,171,483,556
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Not applicable.
TARGET CORPORATION Q3 2024 Form 10-Q
24
SUPPLEMENTAL INFORMATION
Table of Contents
Index to Notes
Item 6. Exhibits
3.1
3.2
10.20
** ‡
364-Day Credit Agreement, dated as of October 15, 2024, among Target Corporation, the Banks listed therein, the Co-Documentation Agents and Syndication Agent listed therein, and Bank of America, N.A., as Administrative Agent.
10.23 ** *
Transition Agreement, dated as of August 12, 2024, among Target Corporation, Target Enterprise, Inc., and Don H. Liu.
31.1 **
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 **
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 ***
Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 ***
Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS ** Inline 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)
* Management contract or compensatory plan or arrangement.
**
Filed herewith.
***
Furnished herewith.
‡ Certain schedules and attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish a copy of such schedules and attachments to the Securities and Exchange Commission upon its request.
TARGET CORPORATION Q3 2024 Form 10-Q
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SUPPLEMENTAL INFORMATION
Table of Contents
Index to Notes
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
TARGET CORPORATION
Dated: November 27, 2024 By: /s/ Jim Lee
Jim Lee
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
/s/ Matthew A. Liegel
Matthew A. Liegel
Senior Vice President, Chief Accounting Officer
and Controller
TARGET CORPORATION Q3 2024 Form 10-Q
26