Financial News Release

Target Corporation First Quarter Earnings Per Share From Continuing Operations $0.55
05/12/05

MINNEAPOLIS, May 12 /PRNewswire-FirstCall/ -- Target Corporation (NYSE: TGT) today reported earnings from continuing operations for the first quarter ended April 30, 2005 of $494 million, or 55 cents per share, compared with $392 million, or 43 cents per share in the first quarter ended May 1, 2004. All earnings per share figures refer to diluted earnings per share.

"We are pleased with our first quarter results," said Bob Ulrich, chairman and chief executive officer of Target Corporation. "Our performance reflects our discipline in executing our strategy and our success in delighting our guests with the right combination of innovation, design and value. We are optimistic about our ability to sustain our competitive advantage and remain confident that we will continue to enjoy profitable market share growth throughout 2005 and beyond."

Total revenues in the first quarter increased 12.7 percent to $11.477 billion from $10.180 billion in 2004, driven by a 6.2 percent increase in comparable store sales combined with the contribution from new store expansion and our credit card operations. (Total revenues include retail sales and net credit revenues. Comparable-store sales are sales from stores open longer than one year.)

For the quarter, earnings before interest and income taxes (EBIT) increased 17.4 percent to $907 million, compared with $773 million in the first quarter 2004. The contribution from the company's credit card operations to EBIT was $142 million, an increase of $31 million, or 27.9 percent.

In the first quarter, the company's gross margin rate improved from the prior year, reflecting favorable markup and shortage performance, while the company's expense rate was unfavorable to prior year. (Gross margin rate represents sales less cost of sales expressed as a percentage of sales. Expense rate represents selling, general and administrative expenses expressed as a percentage of sales.)

Net interest expense for the quarter decreased $32 million compared with first quarter 2004 reflecting the benefit of lower average funded balances resulting from the application of proceeds from the Mervyn's and Marshall Field's sale transactions, partially offset by a higher average portfolio interest rate.

Other Factors

The company's effective income tax rate for continuing operations for the first quarter was 37.9 percent in 2005 compared with 37.8 percent in 2004.

In June 2004, the company announced a $3 billion share repurchase program. Under this program, the company repurchased $453 million of its common stock during the first quarter of 2005, acquiring 9.2 million shares at an average price of $49.37 per share. Program to-date, the company has acquired 37.7 million shares of its common stock at an average price per share of $45.89, reflecting a total investment of approximately $1.73 billion. The company continues to expect that this share repurchase program will be completed within two to three years of its inception.

Miscellaneous

Target Corporation will webcast its first quarter earnings conference call at 9:30am CDT today. Investors and the media are invited to listen to the call through the company's website at http://www.target.com (scroll down to the bottom of the Home page and click on "Investors", then click on "webcasts"). A telephone replay of the call will be available beginning at approximately 11:30am CDT today through the end of business on May 13, 2005. The replay number is (402) 998-1599.

Forward-looking statements in this release should be read in conjunction with the cautionary statements in Exhibit (99)C to the company's 2004 Form 10-K.

Target Corporation's continuing operations include large, general merchandise discount stores, as well as an on-line business called Target.com. At quarter-end, the company operated 1,330 Target stores in 47 states.

Target Corporation news releases are available at http://www.target.com or http://www.prnewswire.com .


     (Tables Follow)


                                    TARGET
                      CONSOLIDATED RESULTS OF OPERATIONS

                                                 Three Months Ended
    (Millions, except per share data)        April 30,    May 1,      %
    (Unaudited)                                2005       2004      Change

    Sales                                    $11,171     $9,909      12.7 %
    Net credit revenues                          306        271      12.7

    Total revenues                            11,477     10,180      12.7

    Cost of sales                              7,556      6,769      11.6
    Selling, general and administrative
     expense                                   2,495      2,172      14.8
    Credit expense                               179        174       2.6
    Depreciation and amortization                340        292      16.4

    Earnings from continuing operations
     before interest expense and
     income taxes                                907        773      17.4

    Net interest expense                         111        143     (22.8)

    Earnings from continuing operations
     before income taxes                         796        630      26.6

    Provision for income taxes                   302        238      26.9

    Earnings from continuing operations          494        392      26.4

    Earnings from discontinued
     operations, net of $25 tax                  -           40       -

    Net earnings                                $494       $432      14.6 %


    Basic earnings per share:
               Continuing operations           $0.56      $0.43      30.0
               Discontinued operations           -         0.04       -
               Basic earnings per share        $0.56      $0.47      17.9 %

    Diluted earnings per share:
               Continuing operations           $0.55      $0.43      30.3
               Discontinued operations           -         0.04       -
               Diluted earnings per share      $0.55      $0.47      18.2 %

    Weighted average common shares
     outstanding:
               Basic                           887.0      912.6
               Diluted                         893.5      921.4



                                    TARGET
                CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

    SUBJECT TO RECLASSIFICATION
    (Millions)                                     April 30,           May 1,
    (Unaudited)                                      2005              2004

    ASSETS
    Cash and cash equivalents                       $1,152              $614
    Accounts receivable, net                         4,857             4,340
    Inventory                                        5,407             4,473
    Other current assets                             1,039               889
    Current assets of discontinued operations          -               2,083
       Total current assets                         12,455            12,399

    Property and equipment, net                     17,328            15,507
    Other non-current assets                         1,512             1,331
    Non-current assets of discontinued
     operations                                        -               1,910
    Total assets                                   $31,295           $31,147

    LIABILITIES AND SHAREHOLDERS'
     INVESTMENT
    Accounts payable                                $5,110            $4,355
    Current portion of long-term debt and
     notes payable                                       4             1,359
    Other current liabilities                        2,059             1,610
    Current liabilities of discontinued
     operations                                        -                 907
       Total current liabilities                     7,173             8,231

    Long-term debt                                   9,005             9,529
    Deferred income taxes                              973               632
    Other non-current liabilities                    1,097               964
    Non-current liabilities of
     discontinued operations                           -                 257
    Shareholders' investment                        13,047            11,534
    Total liabilities and shareholders'
     investment                                    $31,295           $31,147

    Common shares outstanding                        883.3             913.4



                                    TARGET
                    CONSOLIDATED STATEMENTS OF CASH FLOWS

    SUBJECT TO RECLASSIFICATION                         Three Months Ended
    (Millions)                                      April 30,           May 1,
    (Unaudited)                                        2005             2004

    OPERATING ACTIVITIES
    Net earnings                                       $494             $432
    Earnings from and gain on disposal of
     discontinued operations, net of tax                -                 40
    Earnings from continuing operations                 494              392
    Reconciliation to cash flow:
       Depreciation and amortization                    340              292
       Bad debt provision                               106              111
       Loss on disposal of fixed assets, net              6                7
       Other non-cash items affecting earnings           60               21
       Changes in operating accounts
        providing/(requiring) cash:
          Accounts receivable originated at Target       90               82
          Inventory                                     (23)              58
          Other current assets                          151              124
          Other non-current assets                       (2)              10
          Accounts payable                             (669)            (601)
          Accrued liabilities                           (59)             (97)
          Income taxes payable                          163               33
       Other                                             (6)             -
    Cash Flow Provided by Operations                    651              432

    INVESTING ACTIVITIES
    Expenditures for property and equipment            (768)            (632)
    Proceeds from the disposal of fixed assets            4                1
    Change in accounts receivable
     originated at third parties                         16               89
    Cash Flow Required by Investing Activities         (748)            (542)

    FINANCING ACTIVITIES
    Reductions of long term debt                       (511)            (108)
    Dividends paid                                      (71)             (64)
    Repurchase of stock                                (450)             (15)
    Stock option exercises                               36               48
    Cash Flow Required for Financing Activities        (996)            (139)

    Net Cash Provided by Discontinued Operations        -                155
    Net Decrease in Cash and Cash Equivalents        (1,093)             (94)

    Cash and Cash Equivalents at Beginning
     of Period                                        2,245              708
    Cash and Cash Equivalents at End of Period       $1,152             $614



                                                          Target Corporation
                                                                  (Millions)
                                                                 (Unaudited)

    NUMBER OF STORES, RETAIL SQUARE FEET and COMPARABLE STORE SALES
    Retail square feet in thousands; reflects total square feet less office,
    warehouse and vacant space.

                                         Number of
                                          Stores        Retail Square Feet
                                        April  May     April    May
                                         30,    1,      30,      1,      %
                                        2005   2004    2005     2004  Change
    Target General Merchandise Stores  1,189  1,130  143,288  134,626   6.4
    SuperTarget Stores                   141    119   24,936   21,100  18.2
    Total                              1,330  1,249  168,224  155,726   8.0 %

                                    Three Months Ended
                                        April  May
                                         30,    1,
                                        2005   2004
    Continuing Operations Comparable
     Store Sales                        6.2%   7.3%



    CREDIT CARD CONTRIBUTION
    OF CONTINUING OPERATIONS
                                                       Three Months Ended
                                                    April 30,          May 1,
                                                      2005              2004
    Revenues
    Finance charges, late fees and other
     revenues                                         $279              $251
    Merchant fees
      Intracompany                                      15                14
      Third-party                                       27                20
    Total revenues                                     321               285
    Expenses
    Bad debt provision                                 106               111
    Operations and marketing                            73                63
    Total expenses                                     179               174

    Pre-tax credit card contribution                  $142              $111

    As a percent of average receivables
     (annualized)                                    10.7%              9.2%


    ALLOWANCE FOR DOUBTFUL ACCOUNTS
                                                       Three Months Ended
                                                    April 30,          May 1,
                                                      2005              2004
    Allowance at beginning of period                  $387              $352
    Bad debt provision                                 106               111
    Net write-offs                                     (99)             (114)
    Allowance at end of period                        $394              $349

    As a percent of period-end receivables            7.5%              7.4%


    SUPPLEMENTAL DATA
                                                    April 30,          May 1,
                                                      2005              2004
    Period-end receivables                          $5,251            $4,689

    Total past due as a percent of
     period-end receivables *                         3.0%              3.9%

     * Accounts with three or more payments past due.


                                                       Three Months Ended
                                                    April 30,          May 1,
                                                      2005              2004

    Total revenues as a percent
     of average receivables (annualized):            24.1%             23.7%

    Net write-offs as a percent
     of average receivables (annualized):             7.4%              9.5%

    Average receivables                             $5,322            $4,798

SOURCE Target Corporation
05/12/2005
CONTACT: investors, Susan Kahn, +1-612-761-6735, or financial media,
Cathy Wright, +1-612-761-6627, or +1-847-615-1538, both of Target Corporation
Web site: http://www.target.com
(TGT)

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