Item 1. Financial Statements

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Item 1. Financial Statements


Consolidated Statements of Operations
	Three Months Ended				Six Months Ended
(millions, except per share data) (unaudited)	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Net sales	$	25,211	$	25,452	$	49,057	$	49,983
Cost of sales	17,903		17,826		35,031		35,297
Selling, general, and administrative expenses	5,359		5,365		9,950		10,511
Depreciation and amortization (exclusive of depreciation included in cost of sales)	632		626		1,287		1,244
Operating income	1,317		1,635		2,789		2,931
Net interest expense	116		110		232		216
Net other income	(17)		(20)		(43)		(49)
Earnings before income taxes	1,218		1,545		2,600		2,764
Provision for income taxes	283		353		629		630
Net earnings	$	935	$	1,192	$	1,971	$	2,134
Basic earnings per share	$	2.06	$	2.58	$	4.33	$	4.62
Diluted earnings per share	$	2.05	$	2.57	$	4.32	$	4.60
Weighted average common shares outstanding
Basic	454.6		462.5		454.8		462.4
Diluted	455.6		463.5		456.1		463.7
Antidilutive shares	5.0		2.3		2.3		1.8

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q2 2025 Form 10-Q			1


			FINANCIAL STATEMENTS			Table of Contents
						Index to Notes


Consolidated Statements of Comprehensive Income
	Three Months Ended				Six Months Ended
(millions) (unaudited)	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Net earnings	$	935	$	1,192	$	1,971	$	2,134
Other comprehensive (loss) / income, net of tax

Cash flow hedges and currency translation adjustment	(6)		(5)		(10)		(10)
Other comprehensive loss	(6)		(5)		(10)		(10)
Comprehensive income	$	929	$	1,187	$	1,961	$	2,124

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q2 2025 Form 10-Q			2


			FINANCIAL STATEMENTS			Table of Contents
						Index to Notes


Consolidated Statements of Financial Position
(millions, except footnotes) (unaudited)	August 2, 2025		February 1, 2025		August 3, 2024
Assets
Cash and cash equivalents	$	4,341	$	4,762	$	3,497
Inventory	12,881		12,740		12,604
Other current assets	1,812		1,952		1,817
Total current assets	19,034		19,454		17,918







Property and equipment, net	33,568		33,022		33,075
Operating lease assets	3,694		3,763		3,545
Other noncurrent assets	1,555		1,530		1,457
Total assets	$	57,851	$	57,769	$	55,995
Liabilities and shareholders’ investment
Accounts payable	$	12,019	$	13,053	$	12,595
Accrued and other current liabilities	6,068		6,110		5,749
Current portion of long-term debt and other borrowings	1,136		1,636		1,640
Total current liabilities	19,223		20,799		19,984
Long-term debt and other borrowings	15,320		14,304		13,654
Noncurrent operating lease liabilities	3,514		3,582		3,444
Deferred income taxes	2,413		2,303		2,495
Other noncurrent liabilities	1,961		2,115		1,989
Total noncurrent liabilities	23,208		22,304		21,582
Shareholders’ investment
Common stock	38		38		38
Additional paid-in capital	7,084		6,996		6,831
Retained earnings	8,766		8,090		8,030
Accumulated other comprehensive loss	(468)		(458)		(470)
Total shareholders’ investment	15,420		14,666		14,429
Total liabilities and shareholders’ investment	$	57,851	$	57,769	$	55,995

Common Stock Authorized 6,000,000,000 shares, $0.0833 par value; 454,396,092, 455,566,995, and 461,600,215 shares issued and outstanding as of August 2, 2025, February 1, 2025, and August 3, 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						Q2 2025 Form 10-Q			3


			FINANCIAL STATEMENTS			Table of Contents
						Index to Notes


Consolidated Statements of Cash Flows
	Six Months Ended
(millions) (unaudited)	August 2, 2025		August 3, 2024
Operating activities
Net earnings	$	1,971	$	2,134
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization	1,558		1,461
Share-based compensation expense	133		149
Deferred income taxes	112		16

Noncash (gains) / losses and other, net	1		22
Changes in operating accounts:
Inventory	(141)		(718)
Other assets	151		(53)
Accounts payable	(1,125)		522
Accrued and other liabilities	(302)		(194)
Cash provided by operating activities	2,358		3,339
Investing activities
Expenditures for property and equipment	(1,864)		(1,313)


Other	11		8
Cash required for investing activities	(1,853)		(1,305)
Financing activities

Additions to long-term debt	1,984		—
Reductions of long-term debt	(1,571)		(1,076)
Dividends paid	(1,019)		(1,017)
Repurchase of stock	(258)		(155)

Shares withheld for taxes on share-based compensation	(62)		(94)

Cash required for financing activities	(926)		(2,342)
Net decrease in cash and cash equivalents	(421)		(308)
Cash and cash equivalents at beginning of period	4,762		3,805
Cash and cash equivalents at end of period	$	4,341	$	3,497
Supplemental information
Leased assets obtained in exchange for new finance lease liabilities	$	41	$	304
Leased assets obtained in exchange for new operating lease liabilities	119		362

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q2 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, $1.10 per share	—	—		—		(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, $1.12 per share	—	—		—		(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, $1.12 per share	—	—		—		(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, $1.12 per share	—	—		—		(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						Q2 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, $1.12 per share	—	—		—		(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
Net earnings	—	—		—		935		—		935
Other comprehensive loss	—	—		—		—		(6)		(6)
Dividends declared, $1.14 per share	—	—		—		(529)		—		(529)

Share-based compensation	—	—		73		—		—		73
August 2, 2025	454.4	$	38	$	7,084	$	8,766	$	(468)	$	15,420

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q2 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	Property and Equipment	11
Note 6	Supplier Finance Programs	11
Note 7	Commercial Paper and Long-Term Debt	11
Note 8	Derivative Financial Instruments	11
Note 9	Share Repurchase	12
Note 10	Pension Benefits	12
Note 11	Accumulated Other Comprehensive Loss	13
Note 12	Segment Reporting	13


TARGET CORPORATION						Q2 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						Q2 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				Six Months Ended
(millions)	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Apparel & accessories (a)	$	4,086	$	4,261	$	7,797	$	8,158
Beauty (b)	3,396		3,384		6,498		6,503
Food & beverage (c)	5,588		5,538		11,490		11,391
Hardlines (d)	3,522		3,322		6,597		6,482
Home furnishings & décor (e)	3,662		3,908		6,880		7,427
Household essentials (f)	4,422		4,564		8,779		9,113
Other merchandise sales	43		44		83		90
Merchandise sales	24,719		25,021		48,124		49,164
Advertising revenue	217		162		379		292
Credit card profit sharing	134		144		275		286
Other	141		125		279		241
Net sales	$	25,211	$	25,452	$	49,057	$	49,983

*(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 August 2, 2025, February 1, 2025, and August 3, 2024, the accrual for estimated returns was $179 million, $172 million, and $193 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		August 2, 2025
(millions)
Gift card liability (a)	$	1,209	$	427	$	(631)	$	1,005

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

*(b)*Net of estimated breakage.

Advertising revenue — Primarily represents revenue related to certain 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						Q2 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, Target Circle 360 membership revenue, Shipt membership and service revenues, rental income, 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, during the first quarter of 2025, 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	August 2, 2025		February 1, 2025		August 3, 2024
Assets
Short-term investments	Cash and Cash Equivalents	Level 1	$	3,348	$	3,893	$	2,465
Prepaid forward contracts	Other Current Assets	Level 1	17		23		24


Interest rate swaps	Other Noncurrent Assets	Level 2	1		—		3
Liabilities
Interest rate swaps	Other Current Liabilities	Level 2	3		—		—
Interest rate swaps	Other Noncurrent Liabilities	Level 2	60		125		82


Significant Financial Instruments Not Measured at Fair Value (a) (millions)	August 2, 2025					February 1, 2025					August 3, 2024
Carrying Amount	Fair Value				Carrying Amount	Fair Value				Carrying Amount	Fair Value
Long-term debt, including current portion (b)	$	14,393	$	13,643		$	13,904	$	12,953		$	13,157	$	12,578

*(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						Q2 2025 Form 10-Q			10


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

5. 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 $34 million for the three and six months ended August 2, 2025, and $36 million for the three and six months ended August 3, 2024. These impairment charges are included in SG&A Expenses.

6. 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 elect to receive early payment of our payment obligations from the financial institutions at a discounted amount. A vendor’s election to receive early payment 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 $2.9 billion as of August 2, 2025, and $3.7 billion as of both February 1, 2025, and August 3, 2024, and are included within Accounts Payable on our Consolidated Statements of Financial Position. These outstanding vendor obligations do not represent actual early payments made under supplier finance programs, which have historically been lower.

7. Commercial Paper and Long-Term Debt

Our unsecured long-term debt issuances during the six months ended August 2, 2025 were as follows:


Debt Issuances (dollars in millions)
Issuance Date	Maturity Date	Principal Amount		Interest Rate (Fixed)
March 2025	April 2035	$	1,000	5.00	%
June 2025	June 2028	500		4.35
June 2025	February 2036	500		5.25

Our unsecured long-term debt repayments during the six months ended August 2, 2025 were as follows:


Debt Repayments (dollars in millions)
Repayment Date	Maturity Date	Principal Amount		Interest Rate (Fixed)
April 2025	April 2025	$	1,500	2.25	%

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 six months ended August 2, 2025, or August 3, 2024.

8. 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 August 2, 2025, February 1, 2025, and August 3, 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 and six months ended August 2, 2025, and August 3, 2024.


TARGET CORPORATION						Q2 2025 Form 10-Q			11


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes


Effect of Hedges on Debt (millions)	August 2, 2025		February 1, 2025		August 3, 2024



Long-term debt and other borrowings
Carrying amount of hedged debt	$	2,132	$	2,069	$	2,113
Cumulative hedging adjustments, included in carrying amount	(63)		(125)		(79)


Effect of Hedges on Net Interest Expense	Three Months Ended				Six Months Ended
(millions)	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024


Gain (loss) on fair value hedges recognized in Net Interest Expense
Interest rate swaps designated as fair value hedges	$	6	$	78	$	62	$	47
Hedged debt	(6)		(78)		(62)		(47)
Gain on cash flow hedges recognized in Net Interest Expense	6		6		12		12
Total	$	6	$	6	$	12	$	12

9. 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				Six Months Ended
(millions, except per share data)	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Number of shares purchased	—		1.1		2.2		1.1
Average price paid per share (a)	$	—	$	145.94	$	114.59	$	145.94
Total investment (a)	$	—	$	155	$	251	$	155

(a) Amounts include applicable excise tax and commissions.

10. Pension Benefits

We provide pension plan benefits to eligible team members.


Net Pension Benefits (Income) / Expense		Three Months Ended				Six Months Ended
(millions)	Classification	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Service cost benefits earned	SG&A Expenses	$	20	$	19	$	37	$	39
Interest cost on projected benefit obligation	Net Other Income	42		42		84		83
Expected return on assets	Net Other Income	(68)		(70)		(135)		(140)

Prior service cost	Net Other Income	7		8		7		8

Total		$	1	$	(1)	$	(7)	$	(10)


TARGET CORPORATION						Q2 2025 Form 10-Q			12


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

11. Accumulated Other Comprehensive Loss


Change in Accumulated Other Comprehensive Loss	Cash Flow Hedges		Currency Translation Adjustment		Pension		Total
(millions)
February 1, 2025	$	266	$	(27)	$	(697)	$	(458)
Other comprehensive (loss) income before reclassifications	(1)		—		—		(1)
Amounts reclassified	(9)		—		—		(9)
August 2, 2025	$	256	$	(27)	$	(697)	$	(468)

Note: Amounts are net of tax.

12. Segment Reporting

Our Chief Operating Decision Maker—our Chief Executive Officer—monitors our consolidated operating income and net earnings to evaluate performance and make operating decisions. 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. Virtually all of our consolidated revenues are generated in the United States. The vast majority of our properties and equipment are located within the United States.


Business Segment Results	Three Months Ended				Six Months Ended
(millions)	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Net sales	$	25,211	$	25,452	$	49,057	$	49,983
Cost of sales
Merchandising cost of sales	16,177		16,093		31,531		31,939
Supply chain and digital fulfillment costs	1,726		1,733		3,500		3,358

Total cost of sales	17,903		17,826		35,031		35,297
Selling, general and administrative expenses (a)	5,359		5,365		9,950		10,511
Depreciation and amortization (exclusive of depreciation included in cost of sales)	632		626		1,287		1,244
Operating income	1,317		1,635		2,789		2,931
Net interest expense	116		110		232		216
Net other income	(17)		(20)		(43)		(49)
Earnings before income taxes	1,218		1,545		2,600		2,764
Provision for income taxes	283		353		629		630
Net earnings	$	935	$	1,192	$	1,971	$	2,134

*(a)*For the six months ended August 2, 2025, includes $593 million of pretax net gains related to settlements of credit card interchange fee litigation matters. Note 3 provides additional information.


TARGET CORPORATION						Q2 2025 Form 10-Q			13


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

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