Item 1. Financial Statements

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Item 1. Financial Statements


Consolidated Statements of Operations
	Three Months Ended				Nine Months Ended
(millions, except per share data) (unaudited)	November 2, 2024		October 28, 2023		November 2, 2024		October 28, 2023
Sales	$	25,228	$	25,004	$	74,392	$	74,336
Other revenue	440		394		1,259		1,157
Total revenue	25,668		25,398		75,651		75,493
Cost of sales	18,375		18,149		53,623		54,333
Selling, general and administrative expenses	5,486		5,316		16,046		15,525
Depreciation and amortization (exclusive of depreciation included in cost of sales)	639		616		1,883		1,793
Operating income	1,168		1,317		4,099		3,842
Net interest expense	105		107		321		395
Net other income	(28)		(25)		(77)		(64)
Earnings before income taxes	1,091		1,235		3,855		3,511
Provision for income taxes	237		264		867		755
Net earnings	$	854	$	971	$	2,988	$	2,756
Basic earnings per share	$	1.86	$	2.10	$	6.47	$	5.97
Diluted earnings per share	$	1.85	$	2.10	$	6.45	$	5.96
Weighted average common shares outstanding
Basic	460.1		461.6		461.6		461.4
Diluted	461.5		462.6		462.9		462.7
Antidilutive shares	0.5		3.0		0.5		2.6

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q3 2024 Form 10-Q			1


			FINANCIAL STATEMENTS			Table of Contents
						Index to Notes


Consolidated Statements of Comprehensive Income
	Three Months Ended				Nine Months Ended
(millions) (unaudited)	November 2, 2024		October 28, 2023		November 2, 2024		October 28, 2023
Net earnings	$	854	$	971	$	2,988	$	2,756
Other comprehensive (loss) / income, net of tax
Pension benefit liabilities	—		—		—		3
Cash flow hedges and currency translation adjustment	(4)		(5)		(14)		(14)
Other comprehensive loss	(4)		(5)		(14)		(11)
Comprehensive income	$	850	$	966	$	2,974	$	2,745

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q3 2024 Form 10-Q			2


			FINANCIAL STATEMENTS			Table of Contents
						Index to Notes


Consolidated Statements of Financial Position
(millions, except footnotes) (unaudited)	November 2, 2024		February 3, 2024		October 28, 2023
Assets
Cash and cash equivalents	$	3,433	$	3,805	$	1,910
Inventory	15,165		11,886		14,731
Other current assets	1,956		1,807		1,958
Total current assets	20,554		17,498		18,599
Property and equipment
Land	6,666		6,547		6,520
Buildings and improvements	38,666		37,066		36,627
Fixtures and equipment	8,840		8,765		8,490
Computer hardware and software	3,549		3,428		3,312
Construction-in-progress	758		1,703		2,000
Accumulated depreciation	(25,548)		(24,413)		(23,781)
Property and equipment, net	32,931		33,096		33,168
Operating lease assets	3,513		3,362		3,086
Other noncurrent assets	1,533		1,400		1,376
Total assets	$	58,531	$	55,356	$	56,229
Liabilities and shareholders’ investment
Accounts payable	$	14,419	$	12,098	$	14,291
Accrued and other current liabilities	5,738		6,090		6,099
Current portion of long-term debt and other borrowings	1,635		1,116		1,112
Total current liabilities	21,792		19,304		21,502
Long-term debt and other borrowings	14,346		14,922		14,883
Noncurrent operating lease liabilities	3,418		3,279		3,031
Deferred income taxes	2,419		2,480		2,447
Other noncurrent liabilities	2,067		1,939		1,852
Total noncurrent liabilities	22,250		22,620		22,213
Shareholders’ investment
Common stock	38		38		38
Additional paid-in capital	6,916		6,761		6,681
Retained earnings	8,009		7,093		6,225
Accumulated other comprehensive loss	(474)		(460)		(430)
Total shareholders’ investment	14,489		13,432		12,514
Total liabilities and shareholders’ investment	$	58,531	$	55,356	$	56,229

Common Stock Authorized 6,000,000,000 shares, $0.0833 par value; 459,244,995, 461,675,441, and 461,651,176 shares issued and outstanding as of November 2, 2024, February 3, 2024, and October 28, 2023, 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						Q3 2024 Form 10-Q			3


			FINANCIAL STATEMENTS			Table of Contents
						Index to Notes


Consolidated Statements of Cash Flows
	Nine Months Ended
(millions) (unaudited)	November 2, 2024		October 28, 2023
Operating activities
Net earnings	$	2,988	$	2,756
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization	2,215		2,072
Share-based compensation expense	229		176
Deferred income taxes	(58)		252

Noncash (gains) / losses and other, net	(1)		101
Changes in operating accounts:
Inventory	(3,279)		(1,232)
Other assets	(265)		(208)
Accounts payable	2,362		887
Accrued and other liabilities	(113)		528
Cash provided by operating activities	4,078		5,332
Investing activities
Expenditures for property and equipment	(1,968)		(3,952)
Proceeds from disposal of property and equipment	2		24
Other investments	24		18
Cash required for investing activities	(1,942)		(3,910)
Financing activities

Additions to long-term debt	741		—
Reductions of long-term debt	(1,112)		(114)
Dividends paid	(1,533)		(1,503)
Repurchase of stock	(506)		—

Shares withheld for taxes on share-based compensation	(98)		(124)

Cash required for financing activities	(2,508)		(1,741)
Net decrease in cash and cash equivalents	(372)		(319)
Cash and cash equivalents at beginning of period	3,805		2,229
Cash and cash equivalents at end of period	$	3,433	$	1,910
Supplemental information
Leased assets obtained in exchange for new finance lease liabilities	$	312	$	86
Leased assets obtained in exchange for new operating lease liabilities	416		679

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q3 2024 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) / Income		Total
January 28, 2023	460.3	$	38	$	6,608	$	5,005	$	(419)	$	11,232
Net earnings	—	—		—		950		—		950
Other comprehensive loss	—	—		—		—		(3)		(3)
Dividends declared	—	—		—		(507)		—		(507)


Stock options and awards	1.3	—		(67)		—		—		(67)
April 29, 2023	461.6	$	38	$	6,541	$	5,448	$	(422)	$	11,605
Net earnings	—	—		—		835		—		835
Other comprehensive loss	—	—		—		—		(3)		(3)
Dividends declared	—	—		—		(516)		—		(516)

Stock options and awards	—	—		69		—		—		69
July 29, 2023	461.6	$	38	$	6,610	$	5,767	$	(425)	$	11,990
Net earnings	—	—		—		971		—		971
Other comprehensive loss	—	—		—		—		(5)		(5)
Dividends declared	—	—		—		(513)		—		(513)


Stock options and awards	0.1	—		71		—		—		71
October 28, 2023	461.7	$	38	$	6,681	$	6,225	$	(430)	$	12,514
Net earnings	—	—		—		1,382		—		1,382
Other comprehensive loss	—	—		—		—		(30)		(30)
Dividends declared	—	—		—		(514)		—		(514)

Stock options and awards	—	—		80		—		—		80
February 3, 2024	461.7	$	38	$	6,761	$	7,093	$	(460)	$	13,432


TARGET CORPORATION						Q3 2024 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) / Income		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)


Stock options and awards	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)
Stock options and awards	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)
Stock options and awards	—	—		85		—		—		85
November 2, 2024	459.2	$	38	$	6,916	$	8,009	$	(474)	$	14,489

We declared $1.12 and $1.10 dividends per share for the three months ended November 2, 2024, and October 28, 2023, respectively, and $4.38 per share for the fiscal year ended February 3, 2024.

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q3 2024 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	Revenue	9
Note 3	Fair Value Measurements	10
Note 4	Property and Equipment	11
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 Income (Loss)	13


TARGET CORPORATION						Q3 2024 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 generally accepted accounting principles (U.S. 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.

We operate as a single segment that is 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						Q3 2024 Form 10-Q			8


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

2. Revenue

Merchandise sales represent the vast majority of our revenues. We also earn revenues from a variety of other sources, most notably credit card profit-sharing income from our arrangement with TD Bank Group (TD).


Revenue	Three Months Ended				Nine Months Ended
(millions)	November 2, 2024		October 28, 2023		November 2, 2024		October 28, 2023
Apparel & accessories (a)	$	4,003	$	4,007	$	12,161	$	12,075
Beauty (b)	3,226		3,013		9,729		9,114
Food & beverage (c)	5,917		5,736		17,308		17,125
Hardlines (d)	3,152		3,192		9,634		9,966
Home furnishings & décor (e)	4,185		4,420		11,612		12,230
Household essentials (f)	4,715		4,606		13,828		13,700
Other	30		30		120		126
Sales	25,228		25,004		74,392		74,336

Credit card profit sharing	148		165		433		508
Other	292		229		826		649
Other revenue	440		394		1,259		1,157

Total revenue	$	25,668	$	25,398	$	75,651	$	75,493

*(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 November 2, 2024, February 3, 2024, and October 28, 2023, the accrual for estimated returns was $204 million, $170 million, and $207 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 3, 2024		Gift Cards Issued During Current Period But Not Redeemed (b)		Revenue Recognized From Beginning Liability		November 2, 2024
(millions)
Gift card liability (a)	$	1,162	$	493	$	(711)	$	944

*(a)*Included in Accrued and Other Current Liabilities.

*(b)*Net of estimated breakage.


TARGET CORPORATION						Q3 2024 Form 10-Q			9


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

Other Revenue

Credit card profit sharing — We receive payments under a credit card program agreement with 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 advertising revenue, commissions earned on third-party sales through Target.com, Shipt membership and service revenues, rental income, and other miscellaneous revenues.

3. 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	November 2, 2024		February 3, 2024		October 28, 2023
Assets
Short-term investments	Cash and Cash Equivalents	Level 1	$	2,456	$	2,897	$	1,004
Prepaid forward contracts	Other Current Assets	Level 1	26		25		18



Liabilities
Interest rate swaps	Other Current Liabilities	Level 2	—		3		7
Interest rate swaps	Other Noncurrent Liabilities	Level 2	105		123		190


Significant Financial Instruments Not Measured at Fair Value (a) (millions)	November 2, 2024					February 3, 2024					October 28, 2023
Carrying Amount	Fair Value				Carrying Amount	Fair Value				Carrying Amount	Fair Value
Long-term debt, including current portion (b)	$	13,901	$	13,029		$	14,151	$	13,467		$	14,149	$	12,485

*(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 debt is generally measured using a discounted cash flow analysis based on current market interest rates for the same or similar types of financial instruments and would be classified as Level 2. These amounts exclude commercial paper, fair value hedge adjustments, and lease liabilities.


TARGET CORPORATION						Q3 2024 Form 10-Q			10


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

4. Property and Equipment

We review long-lived assets for impairment when store performance expectations, events, or changes in circumstances—such as a decision to relocate or close a store, office, or distribution center, discontinue a project, or make significant software changes—indicate that the asset’s carrying value may not be recoverable. We recognized impairment charges of $1 million and $37 million for the three and nine months ended November 2, 2024, and $64 million and $98 million for the three and nine months ended October 28, 2023. These impairment charges are included in Selling, General and Administrative (SG&A) Expenses.

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 $4.7 billion, $3.4 billion, and $4.5 billion as of November 2, 2024, February 3, 2024, and October 28, 2023, 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 September 2024, we issued $750 million of unsecured debt with a fixed rate of 4.5 percent that matures in September 2034.

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 and nine months ended November 2, 2024, or during the three months ended October 28, 2023. For the nine months ended October 28, 2023, the maximum amount outstanding was $90 million, and the average daily amount outstanding was $1 million, at a weighted average annual interest rate of 4.8 percent.

In October 2024, we obtained a new committed $1.0 billion 364-day unsecured revolving credit facility that will expire in October 2025 and terminated our prior 364-day facility. No balances were outstanding under our credit facilities at any time during 2024 or 2023.

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 3 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 November 2, 2024, and $2.45 billion as of both February 3, 2024, and October 28, 2023. 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 and nine months ended November 2, 2024, and October 28, 2023.


TARGET CORPORATION						Q3 2024 Form 10-Q			11


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes


Effect of Hedges on Debt (millions)	November 2, 2024		February 3, 2024		October 28, 2023



Long-term debt and other borrowings
Carrying amount of hedged debt	$	2,088	$	2,316	$	2,245
Cumulative hedging adjustments, included in carrying amount	(105)		(126)		(197)


Effect of Hedges on Net Interest Expense	Three Months Ended				Nine Months Ended
(millions)	November 2, 2024		October 28, 2023		November 2, 2024		October 28, 2023


Gain (loss) on fair value hedges recognized in Net Interest Expense
Interest rate swaps designated as fair value hedges	$	(26)	$	(60)	$	21	$	(123)
Hedged debt	26		60		(21)		123
Gain on cash flow hedges recognized in Net Interest Expense	6		6		18		18
Total	$	6	$	6	$	18	$	18

8. Share Repurchase

We periodically repurchase shares of our common stock under a board-authorized repurchase program through a combination of open market transactions, accelerated share repurchase arrangements, and other privately negotiated transactions with financial institutions.


Share Repurchase Activity	Three Months Ended				Nine Months Ended
(millions, except per share data)	November 2, 2024		October 28, 2023		November 2, 2024		October 28, 2023
Number of shares purchased	2.4		—		3.5		—
Average price paid per share	$	147.43	$	—	$	146.97	$	—
Total investment	$	354	$	—	$	509	$	—

9. Pension Benefits

We provide pension plan benefits to eligible team members.


Net Pension Benefits Expense		Three Months Ended				Nine Months Ended
(millions)	Classification	November 2, 2024		October 28, 2023		November 2, 2024		October 28, 2023
Service cost benefits earned	SG&A Expenses	$	19	$	19	$	58	$	58
Interest cost on projected benefit obligation	Net Other Income	41		42		124		125
Expected return on assets	Net Other Income	(69)		(67)		(209)		(201)
Amortization of losses	Net Other Income	—		—		—		1
Prior service cost	Net Other Income	—		—		8		11

Total		$	(9)	$	(6)	$	(19)	$	(6)


TARGET CORPORATION						Q3 2024 Form 10-Q			12


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

10. Accumulated Other Comprehensive Income (Loss)


Change in Accumulated Other Comprehensive Income (Loss)	Cash Flow Hedges		Currency Translation Adjustment		Pension		Total
(millions)
February 3, 2024	$	283	$	(24)	$	(719)	$	(460)
Other comprehensive income (loss) before reclassifications, net of tax	—		(1)		—		(1)
Amounts reclassified from AOCI, net of tax	(13)		—		—		(13)
November 2, 2024	$	270	$	(25)	$	(719)	$	(474)


TARGET CORPORATION						Q3 2024 Form 10-Q			13


			MANAGEMENT'S DISCUSSION AND ANALYSIS			Table of Contents
			FINANCIAL SUMMARY			Index to Notes

Previous: Cover and table of contents · Next: Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations