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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 19, 2021

Target Corporation
(Exact name of registrant as specified in its charter)
Minnesota 1-6049 41-0215170
(State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.)

1000 Nicollet Mall,Minneapolis,Minnesota55403
(Address of principal executive offices, including zip code)

(612)304-6073
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.0833 per shareTGTNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. o 




Item 2.02.             Results of Operations and Financial Condition.
 
On May 19, 2021, Target Corporation issued a News Release containing its financial results for the three months ended May 1, 2021. The News Release is attached hereto as Exhibit 99.

Item 9.01.             Financial Statements and Exhibits.
 
(d)                                 Exhibits.
(99)
104Cover Page Interactive Data File (formatted as inline XBRL).

SIGNATURE
 
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 hereunto duly authorized.
 
 TARGET CORPORATION
  
Date: May 19, 2021/s/ Michael J. Fiddelke
 Michael J. Fiddelke
 Executive Vice President and Chief Financial Officer

2
Document

Exhibit (99)

https://cdn.kscope.io/0ea369f6c773002cbcd51e994ca3b6c0-releasebullseyeq4191a.gif

FOR IMMEDIATE RELEASE

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

Target Corporation Reports First Quarter Earnings

First quarter comparable sales grew 22.9 percent, on top of 10.8 percent growth last year.
Store comparable sales increased 18.0 percent, on top of 0.9 percent growth last year. Digital comparable sales grew 50 percent, on top of 141 percent growth a year ago.
Same-day services (Order Pickup, Drive Up and Shipt) grew more than 90 percent, led by growth in Drive Up of 123 percent.
More than 95 percent of Target’s first quarter sales were fulfilled by its stores.
The Company gained more than $1 billion in market share in the first quarter, on top of a $1 billion share gain in first quarter 2020.
First quarter GAAP EPS of $4.17 was 643.2 percent higher than last year. First quarter Adjusted EPS1 of $3.69 was 525.0 percent higher than last year.
For additional media materials, please visit:
https://corporate.target.com/article/2021/05/q1-2021-earnings

MINNEAPOLIS (May 19, 2021) – Target Corporation (NYSE: TGT) today announced its first quarter 2021 financial results, which reflected robust growth in both sales and profitability. The Company reported first quarter GAAP earnings per share (EPS) of $4.17, up 643.2 percent from $0.56 in 2020. First quarter Adjusted EPS of $3.69, which excluded a $0.53 gain on the sale of Dermstore, grew 525.0 percent compared with $0.59 in 2020. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS.
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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 Reports First Quarter Earnings — Page 2 of 11
“Our performance in the first quarter was outstanding on every measure, and showcased the power of putting our stores at the center of our strategy. Store comp sales grew 18.0 percent in the quarter, even as they also fulfilled more than three quarters of Target’s digital sales - including more than 90-percent growth of our same-day services. Importantly, market-share gains of more than $1 billion in the first quarter, on top of $1 billion in share gains a year ago, demonstrate Target’s continued relevance with our guests, even as they have many more shopping options compared with a year ago,” said Brian Cornell, chairman and chief executive officer of Target Corporation.
“Given the trust we’ve built with our guests quarter after quarter and our commitment to adjusting along with them to the ongoing shifts in the macro environment, we're confident in continued comp growth in the second quarter and through the remainder of the year, as well as a healthy full-year operating margin rate.”

Fiscal 2021 Guidance
For the second quarter of 2021, the Company expects mid-to-high single digit growth in comparable sales. The Company expects its second-quarter operating margin rate will be well above the second quarter 2019 rate of 7.2 percent, but likely not as high as last year’s unprecedented 10.0 percent.
The Company expects positive single-digit comparable sales growth in the last two quarters of the year, and expects its full-year operating margin rate will be well above the 2020 rate of 7.0 percent, with the potential to reach 8 percent or somewhat higher.

Operating Results
Comparable sales grew 22.9 percent in the first quarter, reflecting comparable store sales growth of 18.0 percent and comparable digital sales growth of 50 percent. Total revenue of $24.2 billion grew 23.4 percent compared with last year, driven by total sales growth of 23.3 percent and a 30.4 percent increase in other revenue. Operating income was $2.4 billion in first quarter 2021, up 407 percent from $0.5 billion in 2020.
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Target Corporation Reports First Quarter Earnings — Page 3 of 11
First quarter operating income margin rate was 9.8 percent in 2021 compared with 2.4 percent in 2020. First quarter gross margin rate was 30.0 percent, compared with 25.1 percent in 2020. This year's gross margin rate reflected the benefit of favorable category mix and merchandising actions, primarily from low markdown rates, while last year's gross margin rate reflected elevated inventory costs and impairment charges. First quarter SG&A expense rate was 18.6 percent in 2021, compared with 20.7 percent in 2020, reflecting the benefit of leverage from strong sales growth, partially offset by the net impact of other factors, primarily investments in team member pay, benefits, and safety.

Interest Expense and Taxes
The Company’s first quarter 2021 net interest expense was $108 million, compared with $117 million last year. The decrease was primarily due to a lower weighted-average interest rate on the Company's debt portfolio.
First quarter 2021 effective income tax rate was 19.6 percent, compared with 13.9 percent last year. The rate increase was driven by significantly higher earnings, diluting the benefit of fixed and discrete tax items.

Capital Deployment and Return on Invested Capital
The Company paid dividends of $340 million in the first quarter, compared with $332 million last year, reflecting a 3.0 percent increase in the dividend per share, partially offset by a decline in average share count.
The Company resumed share repurchases in first quarter 2021, consistent with its long-standing capital deployment policies and within the limits of its strong, middle-A credit ratings. Share repurchases of $1.2 billion retired 6.1 million shares of common stock at an average price of $190.77.
As of the end of the first quarter, the Company had approximately $3.4 billion of remaining capacity under the repurchase program approved by Target’s Board of Directors in September 2019.
For the trailing twelve months through first quarter 2021, after-tax return on invested capital (ROIC) was 30.7 percent, compared with 13.4 percent for the trailing twelve months through first quarter 2020. The increase in ROIC was driven primarily by increased profitability. The tables in this release provide additional information about the Company’s ROIC calculation.

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Target Corporation Reports First Quarter Earnings — Page 4 of 11
Webcast Details
Target will webcast its first quarter earnings conference call at 7:00 a.m. CT today. Investors and the media are invited to listen to the meeting at Investors.Target.com (click on link under "Upcoming Events"). A replay of the webcast will be provided when available. The replay number is 1-800-876-9512.

Miscellaneous
Statements in this release regarding second quarter and full year comparable sales growth and operating margin rates 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 January 30, 2021. 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 more than 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 Reports First Quarter Earnings — Page 5 of 11
TARGET CORPORATION
 
Consolidated Statements of Operations
 Three Months Ended 
(millions, except per share data) (unaudited)May 1, 2021May 2, 2020Change
Sales $23,879 $19,371 23.3 %
Other revenue318 244 30.4 
Total revenue24,197 19,615 23.4 
Cost of sales16,716 14,510 15.2 
Selling, general and administrative expenses
4,509 4,060 11.0 
Depreciation and amortization (exclusive of depreciation included in cost of sales)
598 577 3.9 
Operating income
2,374 468 407.0 
Net interest expense108 117 (7.6)
Net other (income) / expense(343)22 (1,663.1)
Earnings before income taxes
2,609 329 692.2 
Provision for income taxes512 45 1,017.1 
Net earnings $2,097 $284 639.8 %
Basic earnings per share
$4.20 $0.57 643.0 %
Diluted earnings per share
$4.17 $0.56 643.2 %
Weighted average common shares outstanding
Basic498.6 501.0 (0.5)%
Diluted503.4 505.8 (0.5)%
Antidilutive shares— 0.2 
Dividends declared per share$0.68 $0.66 3.0 %
Note: Per share amounts may not foot due to rounding.



Target Corporation Reports First Quarter Earnings — Page 6 of 11
TARGET CORPORATION
 
Consolidated Statements of Financial Position
(millions, except footnotes) (unaudited)May 1, 2021January 30, 2021May 2, 2020
Assets
Cash and cash equivalents$7,816 $8,511 $4,566 
Inventory10,539 10,653 8,584 
Other current assets1,576 1,592 1,465 
Total current assets19,931 20,756 14,615 
Property and equipment
Land6,146 6,141 6,034 
Buildings and improvements31,710 31,557 30,756 
Fixtures and equipment5,496 5,914 5,486 
Computer hardware and software2,256 2,765 2,597 
Construction-in-progress973 780 803 
Accumulated depreciation(19,777)(20,278)(19,087)
Property and equipment, net26,804 26,879 26,589 
Operating lease assets2,362 2,227 2,235 
Other noncurrent assets1,374 1,386 1,367 
Total assets$50,471 $51,248 $44,806 
Liabilities and shareholders’ investment
Accounts payable$11,637 $12,859 $9,625 
Accrued and other current liabilities5,788 6,122 4,619 
Current portion of long-term debt and other borrowings1,173 1,144 168 
Total current liabilities18,598 20,125 14,412 
Long-term debt and other borrowings11,509 11,536 14,073 
Noncurrent operating lease liabilities2,337 2,218 2,249 
Deferred income taxes1,169 990 1,122 
Other noncurrent liabilities1,899 1,939 1,781 
Total noncurrent liabilities16,914 16,683 19,225 
Shareholders’ investment
Common stock41 42 42 
Additional paid-in capital6,271 6,329 6,206 
Retained earnings9,372 8,825 5,775 
Accumulated other comprehensive loss(725)(756)(854)
Total shareholders’ investment14,959 14,440 11,169 
Total liabilities and shareholders’ investment$50,471 $51,248 $44,806 
Common Stock Authorized 6,000,000,000 shares, $0.0833 par value; 496,093,160, 500,877,129 and 499,919,691 shares issued and outstanding as of May 1, 2021, January 30, 2021, and May 2, 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 Reports First Quarter Earnings — Page 7 of 11
TARGET CORPORATION
 
Consolidated Statements of Cash Flows
 Three Months Ended
(millions) (unaudited)May 1, 2021May 2, 2020
Operating activities  
Net earnings $2,097 $284 
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization667 641 
Share-based compensation expense79 49 
Deferred income taxes170 (4)
Gain on Dermstore sale(335)— 
Noncash losses / (gains) and other, net (30)
Changes in operating accounts:  
Inventory114 408 
Other assets(5)11 
Accounts payable(1,205)(280)
Accrued and other liabilities(413)170 
Cash provided by operating activities1,139 1,284 
Investing activities  
Expenditures for property and equipment(540)(751)
Proceeds from disposal of property and equipment12 
Proceeds from Dermstore sale 356 — 
Other investments
Cash required for investing activities(165)(744)
Financing activities  
Additions to long-term debt— 2,480 
Reductions of long-term debt(21)(17)
Dividends paid(340)(332)
Repurchase of stock(1,310)(686)
Stock option exercises
Cash (required for) / provided by financing activities(1,669)1,449 
Net (decrease) / increase in cash and cash equivalents(695)1,989 
Cash and cash equivalents at beginning of period8,511 2,577 
Cash and cash equivalents at end of period$7,816 $4,566 



Target Corporation Reports First Quarter Earnings — Page 8 of 11
TARGET CORPORATION
 
Operating Results

Rate AnalysisThree Months Ended
(unaudited)May 1, 2021May 2, 2020
Gross margin rate30.0 %25.1 %
SG&A expense rate18.6 20.7 
Depreciation and amortization (exclusive of depreciation included in cost of sales) expense rate
2.5 2.9 
Operating income margin rate9.8 2.4 
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 $171 million and $166 million of profit-sharing income under our credit card program agreement for the three months ended May 1, 2021, and May 2, 2020, respectively.

Comparable SalesThree Months Ended
(unaudited)May 1, 2021May 2, 2020
Comparable sales change22.9 %10.8 %
Drivers of change in comparable sales
Number of transactions17.1 (1.5)
Average transaction amount5.0 12.5 

Comparable Sales by ChannelThree Months Ended
(unaudited)May 1, 2021May 2, 2020
Stores originated comparable sales change18.0 %0.9 %
Digitally originated comparable sales change50.2 140.6 
 
Sales by ChannelThree Months Ended
(unaudited)May 1, 2021May 2, 2020
Stores originated81.7 %84.7 %
Digitally originated18.3 15.3 
Total100 %100 %

Sales by Fulfillment ChannelThree Months Ended
(unaudited)May 1, 2021May 2, 2020
Stores 96.3 %96.7 %
Other3.7 3.3 
Total100 %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.

RedCard PenetrationThree Months Ended
(unaudited)May 1, 2021May 2, 2020
Target Debit Card12.1 %12.7 %
Target Credit Cards8.4 9.7 
Total RedCard Penetration20.5 %22.4 %

 


Target Corporation Reports First Quarter Earnings — Page 9 of 11
Number of Stores and Retail Square FeetNumber of Stores
Retail Square Feet (a)
(unaudited)May 1,
2021
January 30,
2021
May 2,
2020
May 1,
2021
January 30,
2021
May 2,
2020
170,000 or more sq. ft.273 273 272 48,798 48,798 48,613 
50,000 to 169,999 sq. ft.1,510 1,509 1,505 189,618 189,508 189,226 
49,999 or less sq. ft.126 115 94 3,690 3,342 2,745 
Total1,909 1,897 1,871 242,106 241,648 240,584 
(a)In thousands, reflects total square feet less office, distribution center, and vacant space.



Target Corporation Reports First Quarter Earnings — Page 10 of 11
TARGET CORPORATION
 
Reconciliation of Non-GAAP Financial Measures
 
To provide additional transparency, we have disclosed non-GAAP adjusted diluted earnings per share (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 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. 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
May 1, 2021May 2, 2020
(millions, except per share data) (unaudited)PretaxNet of TaxPer SharePretaxNet of TaxPer ShareChange
GAAP diluted earnings per share
$4.17 $0.56 643.2 %
Adjustments
Gain on Dermstore sale$(335)$(269)$(0.53)$— $— $— 
Loss on investment (a)
— — — 21 15 0.03 
Other (b)
41 30 0.06 — — — 
Adjusted diluted earnings per share
$3.69 $0.59 525.0 %
Note: Amounts may not foot due to rounding.
(a)Represented an unrealized loss on our investment in Casper Sleep Inc., which was not core to our operations. We sold this investment during the fourth quarter of 2020.
(b)Represents asset impairment charges resulting from the consolidation of our headquarters office space.


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 EBITDAThree Months Ended 
(dollars in millions) (unaudited)May 1, 2021May 2, 2020Change
Net earnings $2,097 $284 639.8 %
 + Provision for income taxes512 45 1,017.1 
 + Net interest expense108 117 (7.6)
EBIT
$2,717 $446 508.7 %
 + Total depreciation and amortization (a)
667 641 4.1 
EBITDA
$3,384 $1,087 211.3 %
(a)Represents total depreciation and amortization, including amounts classified within Depreciation and Amortization and within Cost of Sales.






Target Corporation Reports First Quarter Earnings — Page 11 of 11
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
May 1, 2021May 2, 2020
Operating income
$8,444 $3,992 
 + Net other income / (expense)
350 (26)
EBIT
8,794 3,966 
 + Operating lease interest (a)
85 87 
  - Income taxes (b)
1,864 855 
Net operating profit after taxes$7,015 $3,198 

Denominator
May 1, 2021May 2, 2020May 4, 2019
Current portion of long-term debt and other borrowings$1,173 $168 $1,056 
 + Noncurrent portion of long-term debt11,509 14,073 11,357 
 + Shareholders' investment14,959 11,169 11,117 
 + Operating lease liabilities (c)
2,563 2,448 2,231 
  - Cash and cash equivalents
7,816 4,566 1,173 
Invested capital$22,388 $23,292 $24,588 
Average invested capital (d)
$22,840 $23,940 

After-tax return on invested capital
30.7 %13.4 %
(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, which were 21.0 percent and 21.1 percent for the trailing twelve months ended May 1, 2021, and May 2, 2020, respectively. For the twelve months ended May 1, 2021, and May 2, 2020, includes tax effect of $1.8 billion and $837 million, respectively, related to EBIT, and $18 million 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, respectively.
(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.