tgt-20250503



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 May 3, 2025

☐ 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 May 23, 2025, were 454,365,901.


						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
(millions, except per share data) (unaudited)	May 3, 2025		May 4, 2024


Net sales	$	23,846	$	24,531
Cost of sales	17,128		17,471
Selling, general, and administrative expenses	4,591		5,146
Depreciation and amortization (exclusive of depreciation included in cost of sales)	655		618
Operating income	1,472		1,296
Net interest expense	116		106
Net other income	(26)		(29)
Earnings before income taxes	1,382		1,219
Provision for income taxes	346		277
Net earnings	$	1,036	$	942
Basic earnings per share	$	2.28	$	2.04
Diluted earnings per share	$	2.27	$	2.03
Weighted average common shares outstanding
Basic	455.0		462.2
Diluted	456.5		463.9
Antidilutive shares	2.4		1.6

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q1 2025 Form 10-Q			1


			FINANCIAL STATEMENTS			Table of Contents
						Index to Notes


Consolidated Statements of Comprehensive Income
	Three Months Ended
(millions) (unaudited)	May 3, 2025		May 4, 2024
Net earnings	$	1,036	$	942
Other comprehensive (loss) / income, net of tax

Cash flow hedges and currency translation adjustment	(4)		(5)
Other comprehensive loss	(4)		(5)
Comprehensive income	$	1,032	$	937

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q1 2025 Form 10-Q			2


			FINANCIAL STATEMENTS			Table of Contents
						Index to Notes


Consolidated Statements of Financial Position
(millions, except footnotes) (unaudited)	May 3, 2025		February 1, 2025		May 4, 2024
Assets
Cash and cash equivalents	$	2,887	$	4,762	$	3,604
Inventory	13,048		12,740		11,730
Other current assets	1,824		1,952		1,744
Total current assets	17,759		19,454		17,078







Property and equipment, net	33,182		33,022		33,114
Operating lease assets	3,739		3,763		3,486
Other noncurrent assets	1,505		1,530		1,439
Total assets	$	56,185	$	57,769	$	55,117
Liabilities and shareholders’ investment
Accounts payable	$	11,823	$	13,053	$	11,561
Accrued and other current liabilities	6,029		6,110		5,684
Current portion of long-term debt and other borrowings	1,139		1,636		2,614
Total current liabilities	18,991		20,799		19,859
Long-term debt and other borrowings	14,334		14,304		13,487
Noncurrent operating lease liabilities	3,564		3,582		3,392
Deferred income taxes	2,338		2,303		2,543
Other noncurrent liabilities	2,011		2,115		1,996
Total noncurrent liabilities	22,247		22,304		21,418
Shareholders’ investment
Common stock	38		38		39
Additional paid-in capital	7,011		6,996		6,747
Retained earnings	8,360		8,090		7,519
Accumulated other comprehensive loss	(462)		(458)		(465)
Total shareholders’ investment	14,947		14,666		13,840
Total liabilities and shareholders’ investment	$	56,185	$	57,769	$	55,117

Common Stock Authorized 6,000,000,000 shares, $0.0833 par value; 454,364,799, 455,566,995, and 462,635,539 shares issued and outstanding as of May 3, 2025, February 1, 2025, and May 4, 2024, respectively.

Preferred Stock Authorized 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						Q1 2025 Form 10-Q			3


			FINANCIAL STATEMENTS			Table of Contents
						Index to Notes


Consolidated Statements of Cash Flows
	Three Months Ended
(millions) (unaudited)	May 3, 2025		May 4, 2024
Operating activities
Net earnings	$	1,036	$	942
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization	787		718
Share-based compensation expense	69		72
Deferred income taxes	36		64

Noncash (gains) / losses and other, net	(4)		(31)
Changes in operating accounts:
Inventory	(308)		156
Other assets	146		43
Accounts payable	(1,344)		(524)
Accrued and other liabilities	(143)		(339)
Cash provided by operating activities	275		1,101
Investing activities
Expenditures for property and equipment	(790)		(674)


Other	3		3
Cash required for investing activities	(787)		(671)
Financing activities

Additions to long-term debt	991		—
Reductions of long-term debt	(1,534)		(32)
Dividends paid	(510)		(508)
Repurchase of stock	(250)		—

Shares withheld for taxes on share-based compensation	(60)		(91)

Cash required for financing activities	(1,363)		(631)
Net decrease in cash and cash equivalents	(1,875)		(201)
Cash and cash equivalents at beginning of period	4,762		3,805
Cash and cash equivalents at end of period	$	2,887	$	3,604
Supplemental information
Leased assets obtained in exchange for new finance lease liabilities	$	17	$	122
Leased assets obtained in exchange for new operating lease liabilities	70		214

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q1 2025 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		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)


Share-based compensation	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)
Share-based compensation	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)

Share-based compensation	—	—		85		—		—		85
November 2, 2024	459.2	$	38	$	6,916	$	8,009	$	(474)	$	14,489
Net earnings	—	—		—		1,103		—		1,103
Other comprehensive income	—	—		—		—		16		16
Dividends declared	—	—		—		(516)		—		(516)
Repurchase of stock	(3.7)	—		—		(506)		—		(506)
Share-based compensation	0.1	—		80		—		—		80
February 1, 2025	455.6	$	38	$	6,996	$	8,090	$	(458)	$	14,666


TARGET CORPORATION						Q1 2025 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		Total
February 1, 2025	455.6	$	38	$	6,996	$	8,090	$	(458)	$	14,666
Net earnings	—	—		—		1,036		—		1,036
Other comprehensive loss	—	—		—		—		(4)		(4)
Dividends declared	—	—		—		(515)		—		(515)
Repurchase of stock	(2.2)	—		—		(251)		—		(251)

Share-based compensation	1.0	—		15		—		—		15
May 3, 2025	454.4	$	38	$	7,011	$	8,360	$	(462)	$	14,947

We declared $1.12 and $1.10 dividends per share for the three months ended May 3, 2025, and May 4, 2024, respectively, and $4.46 per share for the fiscal year ended February 1, 2025.

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q1 2025 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	Net Sales	9
Note 3	Interchange Fee Settlements	10
Note 4	Fair Value Measurements	10

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 Loss	12
Note 11	Segment Reporting	13


TARGET CORPORATION						Q1 2025 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 (U.S.) generally accepted accounting principles (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.

Certain prior-year amounts have been reclassified to conform to the current-year presentation.

We operate as a single segment that includes all of our operations, which are 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						Q1 2025 Form 10-Q			8


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

2. Net Sales

Merchandise sales represent the vast majority of our revenues. We also earn revenues from a variety of other sources, most notably advertising revenue and credit card profit-sharing income.


Net Sales	Three Months Ended
(millions)	May 3, 2025		May 4, 2024
Apparel & accessories (a)	$	3,711	$	3,897
Beauty (b)	3,101		3,119
Food & beverage (c)	5,902		5,853
Hardlines (d)	3,074		3,160
Home furnishings & décor (e)	3,220		3,519
Household essentials (f)	4,357		4,549
Other merchandise sales	40		46
Merchandise sales	23,405		24,143
Advertising revenue	163		130
Credit card profit sharing	141		142
Other	137		116
Net sales	$	23,846	$	24,531

(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 May 3, 2025, February 1, 2025, and May 4, 2024, the accrual for estimated returns was $186 million, $172 million, and $198 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 1, 2025		Gift Cards Issued During Current Period But Not Redeemed (b)		Revenue Recognized From Beginning Liability		May 3, 2025
(millions)
Gift card liability (a)	$	1,209	$	251	$	(429)	$	1,031

(a)Included in Accrued and Other Current Liabilities.

(b)Net of estimated breakage.

Advertising revenue — Primarily represents revenue related to advertising services provided via our Roundel digital advertising business offering. Roundel services are classified as either Net Sales or as a reduction of Cost of Sales or Selling, General, and Administrative (SG&A) Expenses, depending on the nature of the advertising arrangement.


TARGET CORPORATION						Q1 2025 Form 10-Q			9


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

Credit card profit sharing — We receive payments under a credit card program agreement with TD Bank Group (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 commissions earned on third-party sales through our Target Plus third-party digital marketplace, Shipt membership and service revenues, rental income, Target Circle 360 membership revenue, and other miscellaneous revenues.

3. Interchange Fee Settlements

In March 2025, we entered into settlement agreements to resolve credit card interchange fee litigation matters in which we were a plaintiff. As a result of these lump-sum settlements, we recorded gains within SG&A Expenses of $593 million, net of legal fees.

4. 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	May 3, 2025		February 1, 2025		May 4, 2024
Assets
Short-term investments	Cash and Cash Equivalents	Level 1	$	1,975	$	3,893	$	2,726
Prepaid forward contracts	Other Current Assets	Level 1	17		23		27



Liabilities
Interest rate swaps	Other Current Liabilities	Level 2	3		—		3
Interest rate swaps	Other Noncurrent Liabilities	Level 2	65		125		154


Significant Financial Instruments Not Measured at Fair Value (a) (millions)	May 3, 2025				February 1, 2025				May 4, 2024
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion (b)	$	13,398	$	12,377	$	13,904	$	12,953	$	14,155	$	13,123

(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 long-term debt is estimated using Level 2 inputs based on quoted prices for the instruments. Where quoted prices are not available, fair value is estimated using discounted cash flows and market-based expectations for interest rates. These amounts exclude commercial paper, fair value hedge adjustments, and lease liabilities.


TARGET CORPORATION						Q1 2025 Form 10-Q			10


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

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 $3.3 billion, $3.7 billion, and $3.3 billion as of May 3, 2025, February 1, 2025, and May 4, 2024, 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 March 2025, we issued $1.0 billion of unsecured debt with a fixed rate of 5.0 percent that matures in April 2035.

In April 2025, we repaid at maturity $1.5 billion of unsecured debt with a fixed rate of 2.25 percent.

We obtain short-term financing from time to time under our commercial paper program. There was no commercial paper outstanding at any time during the three months ended May 3, 2025 or May 4, 2024.

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 4 to 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 May 3, 2025, and February 1, 2025, and $2.45 billion as of May 4, 2024. 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 months ended May 3, 2025, and May 4, 2024.


Effect of Hedges on Debt (millions)	May 3, 2025		February 1, 2025		May 4, 2024



Long-term debt and other borrowings
Carrying amount of hedged debt	$	2,126	$	2,069	$	2,285
Cumulative hedging adjustments, included in carrying amount	(68)		(125)		(157)

Effect of Hedges on Net Interest Expense

Three Months Ended

(millions)

May 3, 2025

May 4, 2024

Gain (loss) on fair value hedges recognized in Net Interest Expense

Interest rate swaps designated as fair value hedges

(31)

Hedged debt

(57)

SEC Form 10-Q filed by Target Corporation