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Target Corporation Reports Fourth Quarter and Full-Year 2020 Earnings

03/02/21

MINNEAPOLIS, March 2, 2021 /PRNewswire/ --

Q4 2020 Highlights     

  • Comparable sales grew 20.5 percent, reflecting comparable traffic growth of 6.5 percent and a 13.1 percent increase in average ticket.
    • Store comparable sales increased 6.9 percent. Digital comparable sales grew 118 percent, accounting for two-thirds of the Company's overall comp growth.
    • Same-day services (Order Pick Up, Drive Up and Shipt) grew 212 percent, led by more than 500 percent growth in Drive Up.
    • More than 95 percent of Target's fourth quarter sales were fulfilled by its stores.
  • EPS established an all-time high with GAAP EPS of $2.73 and Adjusted EPS of $2.67.
  • The Company continued to gain market share across all five of its core merchandising categories.

Full-Year 2020 Highlights

  • Target's 2020 sales growth of more than $15 billion was greater than the Company's total sales growth over the prior 11 years.
  • Comparable sales grew 19.3 percent, reflecting 7.2 percent growth in store comparable sales, and 145 percent growth in digital comparable sales.
  • Target's digital sales grew by nearly $10 billion in 2020, driven by 235% growth in the Company's same-day services.
  • GAAP EPS from continuing operations of $8.64 was 36.3 percent higher than last year, while Adjusted EPS of $9.42 grew 47.4 percent compared with last year.
  • The Company gained approximately $9 billion in market share.

For additional media materials, please visit:
https://corporate.target.com/article/2021/03/q4-fy2020

 

1Adjusted EPS, a non-GAAP financial measure, excludes the impact of certain discretely managed items. See the tables of this release for additional information about the items that have been excluded from Adjusted EPS.

 

Target Corporation (NYSE: TGT) today announced its fourth-quarter and full-year 2020 results.  The company reported GAAP earnings per share (EPS) from continuing operations of $2.73 in fourth quarter and $8.64 for full-year 2020, compared with $1.63 and $6.34 in 2019, respectively.  Adjusted EPS was $2.67 for the fourth quarter and $9.42 for the full-year, compared with $1.69 and $6.39 in 2019, respectively. Full-year GAAP EPS included a $0.75 loss on debt extinguishment, which was excluded from Adjusted EPS.  The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS.

"Following years of investment to build a durable, scalable and sustainable business model, we saw record growth in 2020, as our guests turned to Target to safely provide for their families throughout the pandemic," said Brian Cornell, chairman and chief executive officer of Target Corporation. "With the strength of our unique, multi-category assortment and the flexibility we offer through our reliable and convenient fulfillment options, we gained nearly $9 billion in market share in 2020, and grew our revenue by $15 billion, which is more than the 11 prior years combined. As we look ahead to 2021 and beyond, we see continued opportunity to invest in our business and our team, building on the strong foundation we've established to drive market share gains and deliver profitable growth for years to come."

Fiscal 2021 Guidance

In the first quarter of 2020, the Company withdrew its guidance, in light of the highly fluid and uncertain outlook for consumer shopping patterns and the impact of COVID-19.  In the face of continued uncertainty, the company is not providing sales and EPS guidance for Fiscal 2021 and beyond.

Operating Results

The Company's total comparable sales grew 20.5 percent in the fourth quarter, reflecting comparable stores sales growth of 6.9 percent and digital sales growth of 118 percent. Total revenue of $28.3 billion grew 21.1 percent compared with last year, driven by sales growth of 21.0 percent and a 28.7 percent increase in other revenue. Operating income was $1.8 billion in fourth quarter 2020, up 53.2 percent from $1.2 billion in 2019.

Fourth quarter operating income margin rate was 6.5 percent in 2020 compared with 5.1 percent in 2019. Fourth quarter gross margin rate was 26.8 percent, compared with 26.3 percent in 2019, reflecting the benefit of merchandising actions, most notably the unusually low markdown rates, partially offset by the impact of higher digital fulfillment and supply chain costs, along with the impact of category mix. Fourth quarter SG&A expense rate was 19.2 percent in 2020, in line with 19.3 percent in 2019, as investments in safety and team member pay and benefits were offset by leverage resulting from strong revenue growth.

Full-year sales increased 19.8 percent to $92.4 billion from $77.1 billion last year, reflecting a 19.3 percent increase in comparable sales combined with sales from non-mature stores. Full-year revenue of $93.6 billion grew 19.8 percent compared with 2019, reflecting sales growth of 19.8 percent and an 18.2 percent increase in other revenue.

Full-year operating income was $6.5 billion in 2020, an increase of 40.4 percent from $4.7 billion last year. Full-year gross margin rate was 28.4 percent, compared with 28.9 percent in 2019. This rate decline reflects unfavorable category sales mix and higher supply chain and fulfillment costs from channel mix, partially offset by markdown favorability. Full-year SG&A expense rate was 19.9 percent in 2020, compared with 20.8 percent in 2019, reflecting significant leverage on fixed costs that offset investments in team member pay, benefits, and safety.

Interest Expense and Taxes

The Company's fourth quarter 2020 net interest expense was $106 million, compared with $118 million last year. The decrease was primarily due to a $10 million charge recognized for the early retirement of debt in the fourth quarter of 2019.

Full-year 2020 net interest expense was $977 million, compared with $477 million in 2019.  The increase was driven primarily by a $512 million charge related to the early retirement of debt in third quarter 2020.

Fourth quarter 2020 effective income tax rate was 20.2 percent, a decrease from 20.7 percent last year. The Company's full-year 2020 effective income tax rate from continuing operations was 21.2 percent compared with 22.0 percent in 2019, which reflects a larger rate benefit from discrete items, primarily related to share-based payments and resolution of certain income tax matters, partially offset by the rate impact of higher earnings, compared with the prior year.

Capital Deployment and Return on Invested Capital

The Company paid dividends of $341 million in the fourth quarter, compared with $334 million last year, reflecting a 3.0 percent increase in the dividend per share, partially offset by a decline in average share count.

Target did not repurchase any of its shares in the fourth quarter. The Company has resumed share repurchases in fiscal 2021, consistent with its long-standing capital deployment policies and within the limits of its strong, middle-A credit ratings.  As of the end of the fourth quarter, the Company had approximately $4.5 billion of remaining capacity under the repurchase program approved by Target's Board of Directors in September 2019.

For the trailing twelve months through fourth quarter 2020, after-tax return on invested capital (ROIC) was 23.5 percent, compared with 16.0 percent for the twelve months through fourth quarter 2019. This increase was driven primarily by higher profitability combined with a decrease in the base of invested capital. The tables in this release provide additional information about the Company's ROIC calculation.

Webcast Details

Target will webcast its financial community meeting, including a Q&A session, beginning at 8:00 a.m. CST today. Investors and the media are invited to listen to the meeting at Investors.Target.com (hover over "investors" then click on "events & presentations"). A replay of the webcast will be available within four hours of the meeting's conclusion.

Miscellaneous

Statements in this release regarding the Company's future financial performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties which could cause the Company's actions to differ materially.  The most important risks and uncertainties are described in Item 1A of the Company's Form 10-K for the fiscal year ended Feb. 1, 2020 and Item 1A of the Company's Form 10-Q for the fiscal quarter ended May 2, 2020. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update any forward-looking statement.

About Target

Minneapolis-based Target Corporation (NYSE: TGT) serves guests at nearly 1,900 stores and at Target.com. Since 1946, Target has given 5% of its profit to communities, which today equals millions of dollars a week. For the latest store count or for more information, visit Target.com/Pressroom. For a behind-the-scenes look at Target, visit Target.com/abullseyeview or follow @TargetNews on Twitter.

For more on the Target Foundation, click here.

TARGET CORPORATION

 

Consolidated Statements of Operations

   

Three Months Ended

     

Twelve Months Ended

   

(millions, except per share data) (unaudited)

 

January 30,

2021

 

February 1,

2020

 

Change

 

January 30,

2021

 

February 1,

2020

 

Change

Sales

 

$

27,997

   

$

23,133

   

21.0

%

 

$

92,400

   

$

77,130

   

19.8

%

Other revenue

 

342

   

265

   

28.7

   

1,161

   

982

   

18.2

 

Total revenue

 

28,339

   

23,398

   

21.1

   

93,561

   

78,112

   

19.8

 

Cost of sales

 

20,485

   

17,056

   

20.1

   

66,177

   

54,864

   

20.6

 

Selling, general and administrative expenses

 

5,448

   

4,504

   

20.9

   

18,615

   

16,233

   

14.7

 

Depreciation and amortization (exclusive of depreciation included in cost of sales)

 

570

   

640

   

(10.8)

   

2,230

   

2,357

   

(5.4)

 

Operating income

 

1,836

   

1,198

   

53.2

   

6,539

   

4,658

   

40.4

 

Net interest expense

 

106

   

118

   

(9.3)

   

977

   

477

   

105.1

 

Net other (income) / expense

 

   

29

   

(106.3)

   

16

   

(9)

   

(285.9)

 

Earnings from continuing operations before income taxes

 

1,730

   

1,051

   

64.7

   

5,546

   

4,190

   

32.4

 

Provision for income taxes

 

350

   

218

   

60.6

   

1,178

   

921

   

27.9

 

Net earnings from continuing operations

 

1,380

   

833

   

65.8

   

4,368

   

3,269

   

33.6

 

Discontinued operations, net of tax

 

   

1

       

   

12

     

Net earnings

 

$

1,380

   

$

834

   

65.6

%

 

$

4,368

   

$

3,281

   

33.1

%

Basic earnings per share

                       

Continuing operations

 

$

2.76

   

$

1.64

   

67.7

%

 

$

8.72

   

$

6.39

   

36.4

%

Discontinued operations

 

   

       

   

0.02

     

Net earnings per share

 

$

2.76

   

$

1.65

   

67.4

%

 

$

8.72

   

$

6.42

   

35.8

%

Diluted earnings per share

                       

Continuing operations

 

$

2.73

   

$

1.63

   

67.7

%

 

$

8.64

   

$

6.34

   

36.3

%

Discontinued operations

 

   

       

   

0.02

     

Net earnings per share

 

$

2.73

   

$

1.63

   

67.5

%

 

$

8.64

   

$

6.36

   

35.8

%

Weighted average common shares outstanding

                       

Basic

 

500.8

   

506.2

   

(1.1)

%

 

500.6

   

510.9

   

(2.0)

%

Diluted

 

506.0

   

511.9

   

(1.2)

%

 

505.4

   

515.6

   

(2.0)

%

Antidilutive shares

 

   

       

   

     

Dividends declared per share

 

$

0.68

   

$

0.66

   

3.0

%

 

$

2.70

   

$

2.62

   

3.1

%

 

Note:  Per share amounts may not foot due to rounding.

 

TARGET CORPORATION

 

Consolidated Statements of Financial Position

(millions, except footnotes) (unaudited)

 

January 30,

2021

 

February 1,

2020

Assets

       

Cash and cash equivalents

 

$

8,511

   

$

2,577

 

Inventory

 

10,653

   

8,992

 

Other current assets

 

1,592

   

1,333

 

Total current assets

 

20,756

   

12,902

 

Property and equipment

       

Land

 

6,141

   

6,036

 

Buildings and improvements

 

31,557

   

30,603

 

Fixtures and equipment

 

5,914

   

6,083

 

Computer hardware and software

 

2,765

   

2,692

 

Construction-in-progress

 

780

   

533

 

Accumulated depreciation

 

(20,278)

   

(19,664)

 

Property and equipment, net

 

26,879

   

26,283

 

Operating lease assets

 

2,227

   

2,236

 

Other noncurrent assets

 

1,386

   

1,358

 

Total assets

 

$

51,248

   

$

42,779

 

Liabilities and shareholders' investment

       

Accounts payable

 

$

12,859

   

$

9,920

 

Accrued and other current liabilities

 

6,122

   

4,406

 

Current portion of long-term debt and other borrowings

 

1,144

   

161

 

Total current liabilities

 

20,125

   

14,487

 

Long-term debt and other borrowings

 

11,536

   

11,338

 

Noncurrent operating lease liabilities

 

2,218

   

2,275

 

Deferred income taxes

 

990

   

1,122

 

Other noncurrent liabilities

 

1,939

   

1,724

 

Total noncurrent liabilities

 

16,683

   

16,459

 

Shareholders' investment

       

Common stock

 

42

   

42

 

Additional paid-in capital

 

6,329

   

6,226

 

Retained earnings

 

8,825

   

6,433

 

Accumulated other comprehensive loss

 

(756)

   

(868)

 

Total shareholders' investment

 

14,440

   

11,833

 

Total liabilities and shareholders' investment

 

$

51,248

   

$

42,779

 

Common Stock Authorized 6,000,000,000 shares, $0.0833 par value; 500,877,129 and 504,198,962 shares issued and outstanding as of January 30, 2021, and February 1, 2020, respectively.

Preferred Stock Authorized 5,000,000 shares, $0.01 par value; no shares were issued or outstanding during any period presented.

TARGET CORPORATION

 

Consolidated Statements of Cash Flows

   

Twelve Months Ended

(millions) (unaudited)

 

January 30,

2021

 

February 1,

2020

Operating activities

       

Net earnings

 

$

4,368

   

$

3,281

 

Earnings from discontinued operations, net of tax

 

   

12

 

Net earnings from continuing operations

 

4,368

   

3,269

 

Adjustments to reconcile net earnings to cash provided by operations:

       

Depreciation and amortization

 

2,485

   

2,604

 

Share-based compensation expense

 

200

   

147

 

Deferred income taxes

 

(184)

   

178

 

Loss on debt extinguishment

 

512

   

10

 

Noncash losses / (gains) and other, net

 

86

   

29

 

Changes in operating accounts:

       

Inventory

 

(1,661)

   

505

 

Other assets

 

(137)

   

18

 

Accounts payable

 

2,925

   

140

 

Accrued and other liabilities

 

1,931

   

199

 

Cash provided by operating activities—continuing operations

 

10,525

   

7,099

 

Cash provided by operating activities—discontinued operations

 

   

18

 

Cash provided by operations

 

10,525

   

7,117

 

Investing activities

       

Expenditures for property and equipment

 

(2,649)

   

(3,027)

 

Proceeds from disposal of property and equipment

 

42

   

63

 

Other investments

 

16

   

20

 

Cash required for investing activities

 

(2,591)

   

(2,944)

 

Financing activities

       

Additions to long-term debt

 

2,480

   

1,739

 

Reductions of long-term debt

 

(2,415)

   

(2,069)

 

Dividends paid

 

(1,343)

   

(1,330)

 

Repurchase of stock

 

(745)

   

(1,565)

 

Stock option exercises

 

23

   

73

 

Cash required for financing activities

 

(2,000)

   

(3,152)

 

Net increase in cash and cash equivalents

 

5,934

   

1,021

 

Cash and cash equivalents at beginning of period

 

2,577

   

1,556

 

Cash and cash equivalents at end of period

 

$

8,511

   

$

2,577

 

 

TARGET CORPORATION

 

Operating Results

Rate Analysis

 

Three Months Ended

 

Twelve Months Ended

(unaudited)

 

January 30,

2021

 

February 1,

2020

 

January 30,

2021

 

February 1,

2020

Gross margin rate

 

26.8

%

 

26.3

%

 

28.4

%

 

28.9

%

SG&A expense rate

 

19.2

   

19.3

   

19.9

   

20.8

 

Depreciation and amortization (exclusive of depreciation included in cost of sales) expense rate

 

2.0

   

2.7

   

2.4

   

3.0

 

Operating income margin rate

 

6.5

   

5.1

   

7.0

   

6.0

 
 

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. Other revenue includes $178 million and $666 million of profit-sharing income under our credit card program agreement for the three and twelve months ended January 30, 2021, respectively, and $176 million and $680 million for the three and twelve months ended February 1, 2020, respectively.

 
 

Comparable Sales

 

Three Months Ended

 

Twelve Months Ended

(unaudited)

 

January 30,

2021

 

February 1,

2020

 

January 30,

2021

 

February 1,

2020

Comparable sales change

 

20.5

%

 

1.5

%

 

19.3

%

 

3.4

%

Drivers of change in comparable sales:

               

Number of transactions

 

6.5

   

1.3

   

3.7

   

2.7

 

Average transaction amount

 

13.1

   

0.2

   

15.0

   

0.7

 
 

Contribution to Comparable Sales Change

 

Three Months Ended

 

Twelve Months Ended

(unaudited)

 

January 30,

2021

 

February 1,

2020

 

January 30,

2021

 

February 1,

2020

Stores originated channel comparable sales change

 

6.9

%

 

(0.7)

%

 

7.2

%

 

1.4

%

Contribution from digitally originated sales to comparable sales

 

13.6

   

2.2

   

12.1

   

1.9

 

Total comparable sales change

 

20.5

%

 

1.5

%

 

19.3

%

 

3.4

%

 

Note: Amounts may not foot due to rounding.

 
 

Sales by Channel

 

Three Months Ended

 

Twelve Months Ended

(unaudited)

 

January 30,

2021

 

February 1,

2020

 

January 30,

2021

 

February 1,

2020

Stores originated

 

77.9

%

 

87.7

%

 

82.1

%

 

91.2

%

Digitally originated

 

22.1

   

12.3

   

17.9

   

8.8

 

Total

 

100

%

 

100

%

 

100

%

 

100

%

 

RedCard Penetration

 

Three Months Ended

 

Twelve Months Ended

(unaudited)

 

January 30,

2021

 

February 1,

2020

 

January 30,

2021

 

February 1,

2020

Target Debit Card

 

12.4

%

 

12.4

%

 

12.3

%

 

12.6

%

Target Credit Cards

 

9.3

   

10.9

   

9.2

   

10.7

 

Total RedCard Penetration

 

21.7

%

 

23.3

%

 

21.5

%

 

23.3

%

 

Note: Amounts may not foot due to rounding.

 
 

Number of Stores and Retail Square Feet

 

Number of Stores

 

Retail Square Feet (a)

(unaudited)

 

January 30,

2021

 

February 1,

2020

 

January 30,

2021

 

February 1,

2020

170,000 or more sq. ft.

 

273

   

272

   

48,798

   

48,619

 

50,000 to 169,999 sq. ft.

 

1,509

   

1,505

   

189,508

   

189,227

 

49,999 or less sq. ft.

 

115

   

91

   

3,342

   

2,670

 

Total

 

1,897

   

1,868

   

241,648

   

240,516

 
   

(a)

In thousands, reflects total square feet less office, distribution center, and vacant space.

TARGET CORPORATION

Reconciliation of Non-GAAP Financial Measures

To provide additional transparency, we have disclosed non-GAAP adjusted diluted earnings per share from continuing operations (Adjusted EPS). This metric excludes certain items presented below. We believe this information is useful in providing period-to-period comparisons of the results of our continuing operations. This measure is not in accordance with, or an alternative to, generally accepted accounting principles in the United States (GAAP). The most comparable GAAP measure is diluted earnings per share from continuing operations. 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

   
 

January 30, 2021

 

February 1, 2020

   

(millions, except per share data) (unaudited)

 

Pretax

 

Net of Tax

 

Per Share

 

Pretax

 

Net of Tax

 

Per Share

 

Change

GAAP diluted earnings per share from continuing operations

         

$

2.73

           

$

1.63

   

67.7

%

Adjustments

                           

Loss on debt extinguishment

 

$

   

$

   

$

   

$

10

   

$

8

   

$

0.02

     

(Gain) / loss on investment (a)

 

   

(3)

   

(0.01)

   

41

   

31

   

0.06

     

Other (b)

 

(5)

   

(4)

   

(0.01)

   

(9)

   

(6)

   

(0.01)

     

Other income tax matters (c)

 

   

(21)

   

(0.04)

   

   

   

     

Adjusted diluted earnings per share from continuing operations

         

$

2.67

           

$

1.69

   

58.2

%

 
 

Reconciliation of Non-GAAP

Adjusted EPS

 

Twelve Months Ended

   
 

January 30, 2021

 

February 1, 2020

   

(millions, except per share data) (unaudited)

 

Pretax

 

Net of Tax

 

Per Share

 

Pretax

 

Net of Tax

 

Per Share

 

Change

GAAP diluted earnings per share from continuing operations

         

$

8.64

           

$

6.34

   

36.3

%

Adjustments

                           

Loss on debt extinguishment

 

$

512

   

$

379

   

$

0.75

   

$

10

   

$

8

   

$

0.01

     

Loss on investment (a)

 

19

   

14

   

0.03

   

41

   

31

   

0.06

     

Other (b)

 

28

   

20

   

0.04

   

(17)

   

(13)

   

(0.02)

     

Other income tax matters (c)

 

   

(21)

   

(0.04)

   

   

   

     

Adjusted diluted earnings per share from continuing operations

         

$

9.42

           

$

6.39

   

47.4

%

   

Note: Amounts may not foot due to rounding.

   

(a)

Represents a (gain) / loss on our investment in Casper Sleep Inc., which is not core to our continuing operations.

(b)

For 2020, represents store damage and inventory losses related to civil unrest, net of insurance recoveries. For 2019, represents insurance recoveries related to the 2013 data breach.

(c)

Represents benefits from the resolution of certain income tax matters unrelated to current period operations.

Earnings from continuing operations before interest expense and income taxes (EBIT) and earnings from continuing operations 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 for, GAAP. The most comparable GAAP measure is net earnings from continuing operations. 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

     

Twelve Months Ended

   

(dollars in millions) (unaudited)

 

January 30,

2021

 

February 1,

2020

 

Change

 

January 30,

2021

 

February 1,

2020

 

Change

Net earnings from continuing operations

 

$

1,380

   

$

833

   

65.8

%

 

$

4,368

   

$

3,269

   

33.6

%

 + Provision for income taxes

 

350

   

218

   

60.6

   

1,178

   

921

   

27.9

 

 + Net interest expense

 

106

   

118

   

(9.3)

   

977

   

477

   

105.1

 

EBIT

 

$

1,836

   

$

1,169

   

57.3

%

 

$

6,523

   

$

4,667

   

39.8

%

 + Total depreciation and amortization (a)

 

637

   

699

   

(9.2)

   

2,485

   

2,604

   

(4.6)

 

EBITDA

 

$

2,473

   

$

1,868

   

32.4

%

 

$

9,008

   

$

7,271

   

23.9

%

   

(a)

Represents total depreciation and amortization, including amounts classified within Depreciation and Amortization and within Cost of Sales.

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

 

January 30,

2021

 

February 1,

2020

   

Operating income

 

$

6,539

   

$

4,658

     

 + Net other income / (expense)

 

(16)

   

9

     

EBIT

 

6,523

   

4,667

     

 + Operating lease interest (a)

 

87

   

86

     

 - Income taxes (b)

 

1,404

   

1,045

     

Net operating profit after taxes

 

$

5,206

   

$

3,708

     
 

Denominator

 

January 30,

2021

 

February 1,

2020

 

February 2,

2019

Current portion of long-term debt and other borrowings

 

$

1,144

   

$

161

   

$

1,052

 

 + Noncurrent portion of long-term debt

 

11,536

   

11,338

   

10,223

 

 + Shareholders' investment

 

14,440

   

11,833

   

11,297

 

 + Operating lease liabilities (c)

 

2,429

   

2,475

   

2,170

 

 - Cash and cash equivalents

 

8,511

   

2,577

   

1,556

 

Invested capital

 

$

21,038

   

$

23,230

   

$

23,186

 

Average invested capital (d)

 

$

22,134

   

$

23,208

     
 

After-tax return on invested capital

 

23.5

%

 

16.0

%

   
   

(a)

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 SG&A. 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.

(b)

Calculated using the effective tax rates for continuing operations, which were 21.2 percent and 22.0 percent for the trailing twelve months ended January 30, 2021, and February 1, 2020, respectively. For the twelve months ended January 30, 2021, and February 1, 2020, includes tax effect of $1.4 billion and $1.0 billion, respectively, related to EBIT and $18 million and $19 million, respectively, related to operating lease interest.

(c)

Total short-term and long-term operating lease liabilities included within Accrued and Other Current Liabilities and Noncurrent Operating Lease Liabilities.

(d)

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.

 

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SOURCE Target Corporation

Contacts: John Hulbert, Investors, (612) 761-6627, Erin Conroy, Media, (612) 761-5928, Target Media Hotline, (612) 696-3400







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