MINNEAPOLIS, Nov. 14 /PRNewswire/ -- Target Corporation (NYSE: TGT) today reported earnings per share for the third quarter ended October 28, 2000 of 24 cents, compared with 26 cents in third quarter 1999, both before extraordinary charges for debt extinguishment. All earnings per share figures refer to diluted earnings per share. Third quarter net earnings were $216 million, compared with $241 million in 1999, before a $1 million extraordinary charge in the current quarter and a $9 million extraordinary charge in third quarter 1999, both for debt extinguishment.

"Our third quarter results reflect the strength of last year's performance, particularly at Target, and are in line with our most recent guidance. Similarly, our current outlook for the holiday season is consistent with our expectation of low double-digit growth in EPS for the full year," said Bob Ulrich, chairman and chief executive officer of Target Corporation. "Over the long-term, we remain confident in our ability to achieve average annual earnings per share growth of 15 percent or more."

For the nine-month period, earnings per share increased 10 percent to 78 cents, compared with 71 cents in 1999. Nine-month net earnings were $712 million, an increase of 7 percent compared with $663 million in the first nine months of 1999, before an extraordinary charge of $13 million in 1999, for debt extinguishment.

Total revenues in the third quarter increased 8.3 percent to $8.582 billion from $7.927 billion in 1999, driven by a 10.5 percent revenue increase at Target. Comparable-store sales for third quarter 2000 increased 2.9 percent.

In the third quarter, gross margin rate was unfavorable to last year, principally due to higher markdowns at both Target and Department Stores. Operating expense rate was also unfavorable, reflecting lack of sales leverage.

Pre-tax segment profit decreased 8 percent to $493 million, compared with $536 million in third quarter 1999, as pre-tax profit declined 6% at Target and 42% at Department Stores. Mervyn's pre-tax profit increased 30 percent. (Pre-tax segment profit is earnings before LIFO, securitization effects, interest, other expense and unusual items.)

Other Factors

For the quarter and year-to-date, pre-tax contribution from credit increased due to the continued growth of the Target Guest Card and improving trends in delinquencies and writeoffs in each of the three segments.

The total of interest expense and interest equivalent for the quarter increased $7 million compared with third quarter 1999 due to higher average funded balances.

The Company's effective income tax rate was 38.5 percent, compared with 38.8 percent last year.

During the quarter, the Company repurchased $219 million of its common stock, buying back 8.5 million shares at an average price of $25.59 per share. Since the inception of its share repurchase program, the Company has repurchased a total of 39.2 million shares at an average price of $29.62 per share, representing a total investment of $1,161 million.

Miscellaneous

Target Corporation will webcast its third quarter earnings conference call at 9:30 am CST today. Investors and the media are invited to listen to the call through the Company's website at http://www.target.com (click on "company/Target Corporation/investor information/investors' overview"). A telephone replay of the call will be available beginning at approximately 11:30 am CST today through the end of business on November 15, 2000. The replay number is 800-633-8284 and the passcode is 16728737.

Forward-looking statements in this release should be read in conjunction with the cautionary statements in Exhibit (99)C to the Company's 1999 Form 10-K.

Target Corporation operates large-store general merchandise formats, including discount stores, moderate-priced promotional and traditional department stores. The company currently operates 1,309 stores in 46 states. This includes 978 Target stores, 267 Mervyn's stores and 64 Department Stores.

Target Corporation news releases are available at http://www.target.com or prnewswire.com or by fax through Company News on Call at 800-758-5804 extension 342677.

(Tables follow)

                              TARGET CORPORATION
                      CONSOLIDATED RESULTS OF OPERATIONS

                    Three Months Ended             Nine Months Ended
    (Millions, except
     per share
     data)       October 28, October 30,   %   October 28, October 30,   %
    (Unaudited)     2000        1999     Change   2000        1999     Change

    Sales         $8,444       $7,806     8.2%   $24,180     $22,408     7.9%
    Net credit
     revenues        138          121    13.3        399         364     9.5

      Total
       revenues    8,582        7,927     8.3     24,579      22,772     7.9

    Cost of sales  5,860        5,365     9.3     16,656      15,409     8.1
    Selling,
     general and
     administrative
     expense       2,024        1,855     9.1      5,768       5,355     7.7
    Depreciation
     and
     amortization    239          213    12.5        693         631     9.9
    Interest expense 108          102     5.7        304         294     3.4

    Earnings before
     income taxes and
     extraordinary
     charges         351          392   (10.6)     1,158       1,083     6.9
    Provision for
     income taxes    135          151   (11.3)       446         420     6.1

    Net earnings
     before
     extraordinary
     charges         216          241   (10.1)       712         663     7.4
    Extraordinary
     charges from
     debt
     extinguishment,
     net of tax        1            9                 --          13
    Net earnings    $215         $232    (7.4)%     $712        $650     9.5%

    Earnings before
     extraordinary
     charges       $0.24        $0.27   (10.6)%    $0.79       $0.73     6.8%
    Extraordinary
     charges          --        (0.01)                --       (0.01)
    Basic earnings
     per share     $0.24        $0.26    (7.8)%    $0.79       $0.72     8.9%

    Earnings before
     extraordinary
     charges       $0.24        $0.26    (7.8)%    $0.78       $0.71    10.1%
    Extraordinary
     charges          --        (0.01)                --       (0.01)
    Diluted earnings
     per share     $0.24        $0.25    (5.0)%    $0.78       $0.70    12.2%

    Weighted average
     common shares
     outstanding:
      Basic        900.4        878.6              905.8       881.9
      Diluted      907.8        927.4              914.7       933.1


                              TARGET CORPORATION
                CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

    (Millions)                                       October 28,  October 30,
    (Unaudited)                                         2000         1999

    ASSETS
    Cash and cash equivalents                             $370        $246
    Retained securitized receivables                     1,708       1,479
    Inventory                                            5,219       4,757
    Other                                                  626         622
      Total current assets                               7,923       7,104

    Property and equipment, net                         10,957       9,766
    Other                                                  745         752
    Total assets                                       $19,625     $17,622

    LIABILITIES AND SHAREHOLDERS' INVESTMENT
    Accounts payable                                    $3,974      $3,394
    Current portion of long-tem debt and notes payable   2,276       1,015
    Other                                                1,627       1,561
      Total current liabilities                          7,877       5,970

    Long-term debt                                       4,846       5,263
    Other                                                  956         887
    Shareholders' investment                             5,946       5,502
    Total liabilities and shareholders' investment     $19,625     $17,622

    Common shares outstanding                            895.7       876.4


                                                          Target Corporation
                                                                   (Millions)

(Unaudited)

    REVENUES
                      Three Months Ended             Nine Months Ended
                  October 28, October 30,   %   October 28, October 30,   %
                     2000         1999    Change   2000        1999     Change

    Target          $6,721      $6,083     10.5%  $19,377    $17,517     10.6%
    Mervyn's         1,005         965      4.1     2,836      2,826      O.3
    Department Stores  739         757     (2.4)    2,067      2,139     (3.4)
    Other              117         122     (3.2)      299        290      3.3

    TOTAL           $8,582      $7,927     8.3%   $24,579    $22,772      7.9%

COMPARABLE-STORE SALES

Comparable-store sales are sales from stores open longer than one year.

                                         % Change            % Change
                               Three Months Ended   Nine Months Ended
                                 October 28, 2000    October 28, 2000
    Target                                    3.5%                3.8%
    Mervyn's                                  3.9                 0.5
    Department Stores                        (3.0)               (4.2)

    TOTAL                                     2.9%                2.6%

INVENTORY

                                       October 28,         October 30,     %
                                             2000                1999   Change

    Target                                 $3,723              $3,297    12.9%
    Mervyn's                                  691                 739    (6.5)
    Department Stores                         563                 605    (6.8)
    Other                                     242                 116     n/a

    TOTAL                                  $5,219              $4,757     9.7%


                                                           Target Corporation
    (Unaudited)                                                     (Millions)

PRE-TAX SEGMENT PROFIT AND EARNINGS RECONCILIATION

Pre-tax segment profit is earnings before LIFO, securitization effects,

interest, other expense and unusual items.

                       Three Months Ended             Nine Months Ended
                   October 28, October 30,   %   October 28, October 30,   %
                       2000       1999     Change    2000       1999    Change
    Target             $386       $411     (6.1)%   $1,331     $1,211    10.0%
    Mervyn's             60         46     29.5        161        136    17.7
    Department Stores    47         79    (41.5)       111        176   (37.1)
    Total pre-tax
     segment profit     493        536     (8.3)     1,603      1,523     5.2
    Securitization
     adjustment
     (interest
     equivalent)        (13)       (12)                (37)       (36)
    Interest expense   (108)      (102)               (304)      (294)
    Other               (21)       (30)               (104)      (110)
      Earnings before
       income taxes and
       extraordinary
       items           $351       $392    (10.6)%   $1,158     $1,083     6.9%

EBITDA

EBITDA is pre-tax segment profit before depreciation and amortization.

                      Three Months Ended              Nine Months Ended
                  October 28, October 30,   %    October 28, October 30,   %
                     2000        1999    Change     2000        1999    Change
    Target           $553        $553       --%    $1,814      $1,628    11.5%
    Mervyn's           92         80      13.9        259         240     7.5
    Department Stores  82        112     (26.9)       211         276   (23.5)

    TOTAL            $727       $745      (2.5)%   $2,284       2,144     6.5%


                    Three Months Ended  Nine Months Ended  Twelve Months Ended
                    Oct. 28,  Oct. 30,  Oct. 28,  Oct. 30,  Oct. 28,  Oct. 30,
                       2000      1999      2000      1999      2000      1999
    Pre-tax Segment
     Profit as a %
     of Revenues:
    Target              5.7%      6.8%      6.9%      6.9%      7.7%      7.4%
    Mervyn's            6.0%      4.8%      5.7%      4.8%      5.6%      5.8%
    Department Stores   6.3%     10.5%      5.4%      8.2%      7.7%      9.4%

    EBITDA as a % of
     Revenues:
    Target              8.2%      9.1%      9.4%      9.3%      9.9%      9.6%
    Mervyn's            9.1%      8.3%      9.1%      8.5%      8.8%      9.1%
    Department Stores  11.1%     14.8%     10.2%     12.9%     12.1%     13.7%

NUMBER OF STORES AND RETAIL SQUARE FEET

                             Number of Stores         Retail Square Feet
                          October 28,  October 30,   October 28,  October 30,
                             2000         1999          200O         1999
    Target                    978          914        112,332       102,859
    Mervyn's                  267          267         21,628        21,661
    Department Stores          64           64         14,175        14,058

    TOTAL                   1,309        1,245        148,135       138,578

Retail square feet in thousands; reflects total square feet less office,

warehouse and vacant space. SOURCE Target Corporation

CONTACT: Susan Kahn of Target Corporation, 612-370-6735/