~~2020Q1DLPFINEXTRPT~~



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 ~~August~~May 1, ~~2020~~2021

☐ 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)

Registrant’s telephone number, including area code: 612/304-6073

Former name, former address and former fiscal year, if changed since last report: N/A

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

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, smaller reporting company, or an emerging growth company (as defined 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 ☒

Indicate the number of shares outstanding of each of registrant’s classes of common stock, as of the latest practicable date. Total shares of common stock, par value $0.0833, outstanding at ~~August~~May 21, ~~2020~~2021, were ~~500,617,844.~~494,723,834.


						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	87
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2422
Item 4.	Controls and Procedures	2422

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	2524
Item 1A.	Risk Factors	2524
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2524
Item 3.	Defaults Upon Senior Securities	2524
Item 4.	Mine Safety Disclosures	2524
Item 5.	Other Information	2524
Item 6.	Exhibits	2625

Signature		2726


			FINANCIAL STATEMENTS			Table of Contents
						Index to Notes

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements


Consolidated Statements of Operations	Consolidated Statements of Operations									Consolidated Statements of Operations
		Three Months Ended						Six Months Ended							Three Months Ended
(millions, except per share data) (unaudited)	(millions, except per share data) (unaudited)	August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019		(millions, except per share data) (unaudited)	May 1, 2021		May 2, 2020
Sales	Sales	$	22,696	$	18,183	$	42,067	$	35,584	Sales	$	23,879	$	19,371
Other revenue	Other revenue	279		239		523		465		Other revenue	318		244
Total revenue	Total revenue	22,975		18,422		42,590		36,049		Total revenue	24,197		19,615
Cost of sales	Cost of sales	15,673		12,625		30,183		24,874		Cost of sales	16,716		14,510
Selling, general and administrative expenses	Selling, general and administrative expenses	4,460		3,912		8,520		7,575		Selling, general and administrative expenses	4,509		4,060
Depreciation and amortization (exclusive of depreciation included in cost of sales)	Depreciation and amortization (exclusive of depreciation included in cost of sales)	542		561		1,119		1,142		Depreciation and amortization (exclusive of depreciation included in cost of sales)	598		577
Operating income	Operating income	2,300		1,324		2,768		2,458		Operating income	2,374		468
Net interest expense	Net interest expense	122		120		239		246		Net interest expense	108		117
Net other (income) / expense	Net other (income) / expense	(11)		(13)		11		(27)		Net other (income) / expense	(343)		22
Earnings from continuing operations before income taxes		2,189		1,217		2,518		2,239
Earnings before income taxes										Earnings before income taxes	2,609		329
Provision for income taxes	Provision for income taxes	499		279		544		509		Provision for income taxes	512		45
Net earnings from continuing operations		1,690		938		1,974		1,730
Discontinued operations, net of tax		—		—		—		3

Net earnings	Net earnings	$	1,690	$	938	$	1,974	$	1,733	Net earnings	$	2,097	$	284

Basic earnings per share	Basic earnings per share									Basic earnings per share	$	4.20	$	0.57
Continuing operations		$	3.38	$	1.83	$	3.94	$	3.37
Discontinued operations		—		—		—		0.01
Net earnings per share		$	3.38	$	1.83	$	3.94	$	3.37

Diluted earnings per share	Diluted earnings per share									Diluted earnings per share	$	4.17	$	0.56
Continuing operations		$	3.35	$	1.82	$	3.91	$	3.34
Discontinued operations		—		—		—		0.01
Net earnings per share		$	3.35	$	1.82	$	3.91	$	3.35
Weighted average common shares outstanding	Weighted average common shares outstanding									Weighted average common shares outstanding
Basic	Basic	500.1		512.1		500.6		513.9		Basic	498.6		501.0
Diluted	Diluted	504.4		516.1		505.1		517.8		Diluted	503.4		505.8
Antidilutive shares	Antidilutive shares	—		—		—		—		Antidilutive shares	0		0.2

Note: Per share amounts may not foot due to rounding.

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			1


			FINANCIAL STATEMENTS			Table of Contents
						Index to Notes


Consolidated Statements of Comprehensive Income	Consolidated Statements of Comprehensive Income														Consolidated Statements of Comprehensive Income
		Three Months Ended						Six Months Ended								Three Months Ended
(millions) (unaudited)	(millions) (unaudited)	August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019		(millions) (unaudited)	May 1, 2021		May 2, 2020
Net earnings	Net earnings	$	1,690	$	938	$	1,974	$	1,733	Net earnings	$	2,097	$	284
Other comprehensive income
Pension, net of tax		22		10		44		20
Currency translation adjustment and cash flow hedges, net of tax		(1)		—		(9)		3
Other comprehensive income / (loss), net of tax										Other comprehensive income / (loss), net of tax
Pension benefit liabilities										Pension benefit liabilities	22		22
Currency translation adjustment and cash flow hedges										Currency translation adjustment and cash flow hedges	9		(8)
Other comprehensive income	Other comprehensive income	21		10		35		23		Other comprehensive income	31		14
Comprehensive income	Comprehensive income	$	1,711	$	948	$	2,009	$	1,756	Comprehensive income	$	2,128	$	298

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			2


			FINANCIAL STATEMENTS			Table of Contents
						Index to Notes


Consolidated Statements of Financial Position	Consolidated Statements of Financial Position							Consolidated Statements of Financial Position
(millions, except footnotes) (unaudited)	(millions, except footnotes) (unaudited)	August 1, 2020		February 1, 2020		August 3, 2019		(millions, except footnotes) (unaudited)	May 1, 2021		January 30, 2021		May 2, 2020
Assets	Assets							Assets
Cash and cash equivalents	Cash and cash equivalents	$	7,284	$	2,577	$	1,656	Cash and cash equivalents	$	7,816	$	8,511	$	4,566
Inventory	Inventory	8,876		8,992		9,122		Inventory	10,539		10,653		8,584
Other current assets	Other current assets	1,463		1,333		1,341		Other current assets	1,576		1,592		1,465
Total current assets	Total current assets	17,623		12,902		12,119		Total current assets	19,931		20,756		14,615
Property and equipment	Property and equipment							Property and equipment
Land	Land	6,027		6,036		6,054		Land	6,146		6,141		6,034
Buildings and improvements	Buildings and improvements	30,946		30,603		29,908		Buildings and improvements	31,710		31,557		30,756
Fixtures and equipment	Fixtures and equipment	5,665		6,083		5,622		Fixtures and equipment	5,496		5,914		5,486
Computer hardware and software	Computer hardware and software	2,631		2,692		2,627		Computer hardware and software	2,256		2,765		2,597
Construction-in-progress	Construction-in-progress	811		533		667		Construction-in-progress	973		780		803
Accumulated depreciation	Accumulated depreciation	(19,341)		(19,664)		(18,866)		Accumulated depreciation	(19,777)		(20,278)		(19,087)
Property and equipment, net	Property and equipment, net	26,739		26,283		26,012		Property and equipment, net	26,804		26,879		26,589
Operating lease assets	Operating lease assets	2,233		2,236		2,062		Operating lease assets	2,362		2,227		2,235
Other noncurrent assets	Other noncurrent assets	1,405		1,358		1,373		Other noncurrent assets	1,374		1,386		1,367
Total assets	Total assets	$	48,000	$	42,779	$	41,566	Total assets	$	50,471	$	51,248	$	44,806
Liabilities and shareholders’ investment	Liabilities and shareholders’ investment							Liabilities and shareholders’ investment
Accounts payable	Accounts payable	$	10,726	$	9,920	$	9,152	Accounts payable	$	11,637	$	12,859	$	9,625
Accrued and other current liabilities	Accrued and other current liabilities	5,057		4,406		4,059		Accrued and other current liabilities	5,788		6,122		4,619
Current portion of long-term debt and other borrowings	Current portion of long-term debt and other borrowings	109		161		1,153		Current portion of long-term debt and other borrowings	1,173		1,144		168
Total current liabilities	Total current liabilities	15,892		14,487		14,364		Total current liabilities	18,598		20,125		14,412
Long-term debt and other borrowings	Long-term debt and other borrowings	14,188		11,338		10,365		Long-term debt and other borrowings	11,509		11,536		14,073
Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	2,241		2,275		2,111		Noncurrent operating lease liabilities	2,337		2,218		2,249
Deferred income taxes	Deferred income taxes	1,121		1,122		1,082		Deferred income taxes	1,169		990		1,122
Other noncurrent liabilities	Other noncurrent liabilities	1,980		1,724		1,808		Other noncurrent liabilities	1,899		1,939		1,781
Total noncurrent liabilities	Total noncurrent liabilities	19,530		16,459		15,366		Total noncurrent liabilities	16,914		16,683		19,225
Shareholders’ investment	Shareholders’ investment							Shareholders’ investment
Common stock	Common stock	42		42		43		Common stock	41		42		42
Additional paid-in capital	Additional paid-in capital	6,248		6,226		6,114		Additional paid-in capital	6,271		6,329		6,206
Retained earnings	Retained earnings	7,121		6,433		6,461		Retained earnings	9,372		8,825		5,775
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(833)		(868)		(782)		Accumulated other comprehensive loss	(725)		(756)		(854)
Total shareholders’ investment	Total shareholders’ investment	12,578		11,833		11,836		Total shareholders’ investment	14,959		14,440		11,169
Total liabilities and shareholders’ investment	Total liabilities and shareholders’ investment	$	48,000	$	42,779	$	41,566	Total liabilities and shareholders’ investment	$	50,471	$	51,248	$	44,806

Common Stock Authorized 6,000,000,000 shares, $0.0833 par value; ~~500,252,831, 504,198,962~~496,093,160, 500,877,129 and ~~511,335,375~~499,919,691 shares issued and outstanding ~~at August~~as of May 1, ~~2020, February 1, 2020,~~2021, January 30, 2021, and ~~August 3, 2019,~~May 2, 2020, respectively.

Preferred Stock Authorized 5,000,000 shares, $0.01 par value; 0 shares were issued or outstanding during any period presented.

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			3


			FINANCIAL STATEMENTS			Table of Contents
						Index to Notes


Consolidated Statements of Cash Flows	Consolidated Statements of Cash Flows					Consolidated Statements of Cash Flows
		Six Months Ended							Three Months Ended
(millions) (unaudited)	(millions) (unaudited)	August 1, 2020		August 3, 2019		(millions) (unaudited)	May 1, 2021		May 2, 2020
Operating activities	Operating activities					Operating activities
Net earnings	Net earnings	$	1,974	$	1,733	Net earnings	$	2,097	$	284
Earnings from discontinued operations, net of tax		—		3
Net earnings from continuing operations		1,974		1,730
Adjustments to reconcile net earnings to cash provided by operations

Adjustments to reconcile net earnings to cash provided by operating activities:						Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	1,245		1,267		Depreciation and amortization	667		641
Share-based compensation expense	Share-based compensation expense	104		86		Share-based compensation expense	79		49
Deferred income taxes	Deferred income taxes	(12)		104		Deferred income taxes	170		(4)
Gain on Dermstore sale						Gain on Dermstore sale	(335)		0

Noncash losses / (gains) and other, net	Noncash losses / (gains) and other, net	86		42		Noncash losses / (gains) and other, net	(30)		5
Changes in operating accounts
Changes in operating accounts:						Changes in operating accounts:
Inventory	Inventory	116		375		Inventory	114		408
Other assets	Other assets	(14)		64		Other assets	(5)		11
Accounts payable	Accounts payable	795		(731)		Accounts payable	(1,205)		(280)
Accrued and other liabilities	Accrued and other liabilities	822		(127)		Accrued and other liabilities	(413)		170
Cash provided by operating activities—continuing operations		5,116		2,810
Cash provided by operating activities—discontinued operations		—		2
Cash provided by operations		5,116		2,812

Cash provided by operating activities						Cash provided by operating activities	1,139		1,284
Investing activities	Investing activities					Investing activities
Expenditures for property and equipment	Expenditures for property and equipment	(1,414)		(1,394)		Expenditures for property and equipment	(540)		(751)
Proceeds from disposal of property and equipment	Proceeds from disposal of property and equipment	10		10		Proceeds from disposal of property and equipment	12		6
Proceeds from Dermstore sale						Proceeds from Dermstore sale	356		0
Other investments	Other investments	2		—		Other investments	7		1
Cash required for investing activities	Cash required for investing activities	(1,402)		(1,384)		Cash required for investing activities	(165)		(744)
Financing activities	Financing activities					Financing activities
Additions to long-term debt	Additions to long-term debt	2,480		994		Additions to long-term debt	0		2,480
Reductions of long-term debt	Reductions of long-term debt	(126)		(1,026)		Reductions of long-term debt	(21)		(17)
Dividends paid	Dividends paid	(662)		(658)		Dividends paid	(340)		(332)
Repurchase of stock	Repurchase of stock	(706)		(662)		Repurchase of stock	(1,310)		(686)

Stock option exercises	Stock option exercises	7		24		Stock option exercises	2		4
Cash provided by / (required for) financing activities		993		(1,328)
Net increase in cash and cash equivalents		4,707		100
Cash (required for) / provided by financing activities						Cash (required for) / provided by financing activities	(1,669)		1,449
Net (decrease) / increase in cash and cash equivalents						Net (decrease) / increase in cash and cash equivalents	(695)		1,989
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	2,577		1,556		Cash and cash equivalents at beginning of period	8,511		2,577
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	7,284	$	1,656	Cash and cash equivalents at end of period	$	7,816	$	4,566
Supplemental information	Supplemental information					Supplemental information
Leased assets obtained in exchange for new finance lease liabilities	Leased assets obtained in exchange for new finance lease liabilities	$	246	$	156	Leased assets obtained in exchange for new finance lease liabilities	$	69	$	103
Leased assets obtained in exchange for new operating lease liabilities	Leased assets obtained in exchange for new operating lease liabilities	142		195		Leased assets obtained in exchange for new operating lease liabilities	189		97

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			4


			FINANCIAL STATEMENTS			Table of Contents
						Index to Notes


Consolidated Statements of Shareholders’ Investment	Consolidated Statements of Shareholders’ Investment																							Consolidated Statements of Shareholders’ Investment
		Common	Stock		Additional				Accumulated Other					Common	Stock		Additional				Accumulated Other
		Stock	Par		Paid-in		Retained		Comprehensive					Stock	Par		Paid-in		Retained		Comprehensive
(millions) (unaudited)	(millions) (unaudited)	Shares	Value		Capital		Earnings		(Loss) / Income		Total		(millions) (unaudited)	Shares	Value		Capital		Earnings		(Loss) / Income		Total
February 2, 2019		517.8	$	43	$	6,042	$	6,017	$	(805)	$	11,297
February 1, 2020													February 1, 2020	504.2	$	42	$	6,226	$	6,433	$	(868)	$	11,833
Net earnings	Net earnings	—	—		—		795		—		795		Net earnings	—	—		—		284		—		284
Other comprehensive income	Other comprehensive income	—	—		—		—		13		13		Other comprehensive income	—	—		—		—		14		14
Dividends declared	Dividends declared	—	—		—		(330)		—		(330)		Dividends declared	—	—		—		(333)		—		(333)
Repurchase of stock	Repurchase of stock	(3.6)	—		—		(277)		—		(277)		Repurchase of stock	(5.7)	—		—		(609)		—		(609)
Accelerated share repurchase pending final settlement		(3.0)	—		(153)		(247)		—		(400)

Stock options and awards	Stock options and awards	1.1	—		19		—		—		19		Stock options and awards	1.4	—		(20)		—		—		(20)
May 4, 2019		512.3	$	43	$	5,908	$	5,958	$	(792)	$	11,117
May 2, 2020													May 2, 2020	499.9	$	42	$	6,206	$	5,775	$	(854)	$	11,169
Net earnings	Net earnings	—	—		—		938		—		938		Net earnings	—	—		—		1,690		—		1,690
Other comprehensive income	Other comprehensive income	—	—		—		—		10		10		Other comprehensive income	—	—		—		—		21		21
Dividends declared	Dividends declared	—	—		—		(341)		—		(341)		Dividends declared	—	—		—		(344)		—		(344)
Repurchase of stock		(1.3)	—		153		(94)		—		59

Stock options and awards	Stock options and awards	0.3	—		53		—		—		53		Stock options and awards	0.4	—		42		—		—		42
August 3, 2019		511.3	$	43	$	6,114	$	6,461	$	(782)	$	11,836
August 1, 2020													August 1, 2020	500.3	$	42	$	6,248	$	7,121	$	(833)	$	12,578
Net earnings	Net earnings	—	—		—		714		—		714		Net earnings	—	—		—		1,014		—		1,014
Other comprehensive income	Other comprehensive income	—	—		—		—		9		9		Other comprehensive income	—	—		—		—		36		36
Dividends declared	Dividends declared	—	—		—		(338)		—		(338)		Dividends declared	—	—		—		(346)		—		(346)
Repurchase of stock		(3.0)	(1)		—		(295)		—		(296)
Accelerated share repurchase pending final settlement		(2.5)	—		(178)		(272)		—		(450)

Stock options and awards	Stock options and awards	0.9	—		70		—		—		70		Stock options and awards	0.5	—		37		—		—		37
November 2, 2019		506.7	$	42	$	6,006	$	6,270	$	(773)	$	11,545
October 31, 2020													October 31, 2020	500.8	$	42	$	6,285	$	7,789	$	(797)	$	13,319
Net earnings	Net earnings	—	—		—		834		—		834		Net earnings	—	—		—		1,380		—		1,380
Other comprehensive loss		—	—		—		—		(95)		(95)
Other comprehensive income													Other comprehensive income	—	—		—		—		41		41
Dividends declared	Dividends declared	—	—		—		(336)		—		(336)		Dividends declared	—	—		—		(344)		—		(344)
Repurchase of stock		(2.6)	—		178		(335)		—		(157)

Stock options and awards	Stock options and awards	0.1	—		42		—		—		42		Stock options and awards	0.1	—		44		—		—		44
February 1, 2020		504.2	$	42	$	6,226	$	6,433	$	(868)	$	11,833
January 30, 2021													January 30, 2021	500.9	$	42	$	6,329	$	8,825	$	(756)	$	14,440


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			5


			FINANCIAL STATEMENTS			Table of Contents
						Index to Notes


Consolidated Statements of Shareholders’ Investment	Consolidated Statements of Shareholders’ Investment																							Consolidated Statements of Shareholders’ Investment
		Common	Stock		Additional				Accumulated Other					Common	Stock		Additional				Accumulated Other
		Stock	Par		Paid-in		Retained		Comprehensive					Stock	Par		Paid-in		Retained		Comprehensive
(millions) (unaudited)	(millions) (unaudited)	Shares	Value		Capital		Earnings		(Loss) / Income		Total		(millions) (unaudited)	Shares	Value		Capital		Earnings		(Loss) / Income		Total
February 1, 2020		504.2	$	42	$	6,226	$	6,433	$	(868)	$	11,833
January 30, 2021													January 30, 2021	500.9	$	42	$	6,329	$	8,825	$	(756)	$	14,440
Net earnings	Net earnings	—	—		—		284		—		284		Net earnings	—	—		—		2,097		—		2,097
Other comprehensive income	Other comprehensive income	—	—		—		—		14		14		Other comprehensive income	—	—		—		—		31		31
Dividends declared	Dividends declared	—	—		—		(333)		—		(333)		Dividends declared	—	—		—		(343)		—		(343)
Repurchase of stock	Repurchase of stock	(5.7)	—		—		(609)		—		(609)		Repurchase of stock	(6.1)	(1)		—		(1,207)		—		(1,208)
Stock options and awards	Stock options and awards	1.4	—		(20)		—		—		(20)		Stock options and awards	1.3	—		(58)		—		—		(58)
May 2, 2020		499.9	$	42	$	6,206	$	5,775	$	(854)	$	11,169
Net earnings		—	—		—		1,690		—		1,690
Other comprehensive income		—	—		—		—		21		21
Dividends declared		—	—		—		(344)		—		(344)
May 1, 2021													May 1, 2021	496.1	$	41	$	6,271	$	9,372	$	(725)	$	14,959

Stock options and awards		0.4	—		42		—		—		42
August 1, 2020		500.3	$	42	$	6,248	$	7,121	$	(833)	$	12,578

We declared $0.68 and $0.66 dividends per share for the three months ended ~~August~~May 1, ~~2020,~~2021, and ~~August 3, 2019,~~May 2, 2020, respectively, and ~~$2.62~~$2.70 per share for the fiscal year ended ~~February 1, 2020.~~January 30, 2021.

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			6


			FINANCIAL STATEMENTS			Table of Contents
			INDEX			Index to Notes


TARGET CORPORATION						~~Q2 2020~~Q1 2021 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 ~~(SEC)~~ 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 (U.S. GAAP) for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the financial statement disclosures in our ~~2019~~2020 Form 10-K.

We use the same accounting policies in preparing quarterly and annual financial statements. ~~Unless otherwise noted, amounts presented within the Notes to Consolidated Financial Statements refer to our continuing operations.~~.

We operate as a single segment that ~~includes all of our continuing operations, which are~~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.

2. ~~Impact of~~ Coronavirus (COVID-19)

~~On March 11, 2020, the World Health Organization declared the~~The novel coronavirus ~~disease~~ (COVID-19) a pandemic ~~and on March 13,~~continues to evolve. In 2020, ~~the United States declared a national emergency. States~~states and cities ~~have taken~~took various measures in response to COVID-19, including mandating the closure of certain businesses and encouraging or requiring citizens to avoid large gatherings. To date, virtually all of our stores, digital channels, and distribution centers ~~remain~~have remained open.

~~Throughout the six months ended August 1, 2020, guest shopping patterns changed significantly and unpredictably in reaction to~~As the COVID-19 ~~pandemic. NaN of our 5 core merchandise categories~~pandemic has evolved, we have experienced significant volatility in our sales ~~grow~~th~~year-to-date; however, sales of Apparel and Accessories declined significantly~~ ~~in the first quarter~~ ~~before rebounding in the second quarter.~~category mix. Note 3 4 ~~provides~~presents sales by category. ~~In response to these changes,~~Since the pandemic started in March 2020, we ~~have taken many~~took various actions, including accelerating purchases of certain merchandise in our core categories and slowing or canceling ~~certain~~ purchase orders, primarily for Apparel and Accessories. As a result, ~~of these actions,~~ during the ~~first~~ quarter ofended May 2, 2020, we recorded $216 million of purchase order cancellation fees in Cost of Sales.

3. Dermstore Sale

In February 2021, we sold our wholly owned subsidiary Dermstore LLC (Dermstore) for $356 million in cash and recognized a $335 million pretax gain, which is included in Net Other (Income) / Expense. Dermstore has historically represented less than 1 percent of our consolidated revenues, operating income and net assets.


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			8


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

3.4. Revenues

General 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~~profit-sharing income from our arrangement with TD Bank Group (TD).

Revenues Three Months Ended Six Months Ended
(millions) August 1,
2020 August 3,
2019 August 1,
2020 August 3,
2019
Apparel and accessories ^(a)
$ 4,084 $ 3,656 $ 6,703 $ 6,946
Beauty and household essentials ^(b)
6,158 5,076 12,069 10,047
Food and beverage ^(c)
4,186 3,460 8,761 7,182
Hardlines ^(d)
3,608 2,503 6,582 4,889
Home furnishings and décor ^(e)
4,625 3,457 7,889 6,458
Other 35 31 63 62
Sales 22,696 18,183 42,067 35,584
Credit card profit sharing 158 168 324 328
Other 121 71 199 137
Other revenue 279 239 523 465
Total revenue $ 22,975 $ 18,422 $ 42,590 $ 36,049

^{Revenues Three Months Ended
(millions) May 1, 2021 May 2, 2020
Apparel and accessories (a) $ 4,269 $ 2,619
Beauty and household essentials (b) 6,364 5,911
Food and beverage (c) 4,856 4,575
Hardlines (d) 3,946 2,974
Home furnishings and décor (e) 4,410 3,264
Other 34 28
Sales 23,879 19,371
Credit card profit sharing 171 166
Other 147 78
Other revenue 318 244
Total revenue $ 24,197 $ 19,615}

(a)Includes apparel for women, men, boys, girls, toddlers, infants and newborns, as well as jewelry, accessories, and shoes.

^(b)Includes beauty and personal care, baby gear, cleaning, paper products, and pet supplies.

^(c)Includes dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, produce, and food service in our stores.

^(d)Includes electronics (including video game hardware and software), toys, entertainment, sporting goods, and luggage.

^(e)Includes furniture, lighting, storage, kitchenware, small appliances, home décor, bed and bath, home improvement, ~~school/~~school and office supplies, greeting cards and party supplies, and other seasonal merchandise.

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.~~patterns. As of ~~August~~May 1, ~~2020, February 1, 2020,~~2021, January 30, 2021, and ~~August 3, 2019,~~May 2, 2020, the accrual for estimated returns was ~~$201~~$196 million, ~~$117~~$139 million, and ~~$131~~$398 million, respectively. ~~Other than~~The accrual as ~~described below, we have not historically had notable adjustments to our~~of May 2, 2020, reflects the impact of the suspension of in-store merchandise returns ~~estimates.~~

~~From~~and exchanges from March 26, 2020, to April 26, 2020, ~~we did not accept in-store merchandise returns and exchanges~~due to ~~protect our team members from COVID-19. We lengthened~~ the return period for merchandise affected by this change. Our returns estimate for sales during the suspension period included significant assumptions, including the impact of the lengthened return period, sales mix, and recent changes in guest returns behavior. At May 2, 2020, the returns reserve totaled $398 million. After resuming guest returns, we received fewer returns than originally expected. During the second quarter, we reduced our estimate of sales returns, which increased sales by $146 million and operating income by $110 million.COVID-19 pandemic.

Revenue from Target gift card sales is recognized upon gift card redemption, which is typically within one year of issuance.


Gift Card Liability Activity	Gift Card Liability Activity	February 1, 2020		Gift Cards Issued During Current Period But Not Redeemed ^(b)		Revenue Recognized From Beginning Liability		August 1, 2020		Gift Card Liability Activity	January 30, 2021		Gift Cards Issued During Current Period But Not Redeemed (b)			Revenue Recognized From Beginning Liability		May 1, 2021
(millions)	(millions)														(millions)				Revenue Recognized From Beginning Liability			May 1, 2021
Gift card liability ^(a)	Gift card liability ^(a)	$	935	$	315	$	(475)	$	775	Gift card liability (a)	$	1,035	$	234		$	(374)			$	895

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

^(b)Net of estimated breakage.


TARGET CORPORATION						Q1 2021 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. Under the agreement, we receive a percentage of the profits generated by the Target Credit Card and Target MasterCard receivables in exchange for performing account servicing and primary marketing functions. TD underwrites, funds, and owns Target Credit Card and Target MasterCard receivables, controls risk management policies, and oversees regulatory compliance.


~~TARGET CORPORATION~~						~~Q2 2020 Form 10-Q~~			9


			~~FINANCIAL STATEMENTS~~			~~Table of Contents~~
			~~NOTES~~			~~Index to Notes~~

4.5. Fair Value Measurements

Fair value measurements are reported in one of three levels reflecting the valuation techniques used to determine fair value.

Fair Value Measurements - Recurring Basis Fair Value at
(millions) Classification Pricing Category August 1,
2020 February 1,
2020 August 3,
2019
Assets
Short-term investments Cash and Cash Equivalents Level 1 $ 6,370 $ 1,810 $ 796
Prepaid forward contracts Other Current Assets Level 1 26 23 20
Equity securities ^(a)
Other Current Assets Level 1 27 39 80
Interest rate swaps Other Noncurrent Assets Level 2 239 137 108
Liabilities
Interest rate swaps Other Noncurrent Liabilities Level 2 12 — —

^(a)~~Represents our investment in Casper Sleep Inc. common stock~~.


Financial Instruments Measured On a Recurring Basis			Fair Value
(millions)	Classification	Pricing Category	May 1, 2021		January 30, 2021		May 2, 2020
Assets
Short-term investments	Cash and Cash Equivalents	Level 1	$	6,895	$	7,644	$	3,605
Prepaid forward contracts	Other Current Assets	Level 1	37		38		23
Equity securities	Other Current Assets	Level 1	0		0		18
Interest rate swaps	Other Noncurrent Assets	Level 2	149		188		228
Liabilities

Interest rate swaps	Other Noncurrent Liabilities	Level 2	0		0		10


Significant Financial Instruments Not Measured at Fair Value ^(a) (millions)	Significant Financial Instruments Not Measured at Fair Value ^(a) (millions)	August 1, 2020							February 1, 2020							August 3, 2019					Significant Financial Instruments Not Measured at Fair Value (a) (millions)		May 1, 2021					January 30, 2021				May 2, 2020
				Carrying Amount		Fair Value			Carrying Amount		Fair Value			Carrying Amount		Fair Value		Significant Financial Instruments Not Measured at Fair Value (a) (millions)	Carrying Amount	Fair Value					Carrying Amount	Fair Value				Carrying Amount	Fair Value
Long-term debt, including current portion ^(b)	Long-term debt, including current portion ^(b)	$	12,384	$	15,457		$	9,992	$	11,864		$	10,244	$	11,635	Long-term debt, including current portion (b)	$		12,335			$	10,643	$	12,787		$	12,474	$	14,781

^(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, unamortized swap valuation adjustments, and lease liabilities.

5.6. 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 ~~projects,~~a project, or make significant software changes—indicate that the asset’s carrying value may not be recoverable. We recognized impairment charges of ~~$25~~$41 million and ~~$60~~$35 million during the three ~~and six~~ months ended ~~August~~May 1, ~~2020, respectively. We recognized impairment charges of $10 million~~2021, and ~~$13 million during the three and six months ended August 3, 2019,~~May 2, 2020, respectively. These impairment charges are included in Selling, General and Administrative Expenses (SG&A).

~~6. Commercial Paper and Long-Term Debt~~

~~In March 2020, we issued unsecured fixed rate debt of $1.5 billion at 2.250 percent that matures in April 2025 and $1.0 billion at 2.650 percent that matures in September 2030.~~

We obtain short-term financing from time to time under our commercial paper program. NaN balances were outstanding at any time during the six months ended August 1, 2020. For the six months ended August 3, 2019, the maximum amount outstanding was $744 million, and the average daily amount outstanding was $74 million at a weighted average annual interest rate of 2.4 percent, with 0 balance outstanding as of August 3, 2019.

In April 2020, we obtained a committed $900 million 364-day unsecured revolving credit facility that expires in April 2021. This new facility is in addition to our $2.5 billion unsecured revolving credit facility that expires in October 2023. NaN balances were outstanding under either credit facility at any time during 2020 or 2019.


~~TARGET CORPORATION~~						~~Q2 2020 Form 10-Q~~			10


			~~FINANCIAL STATEMENTS~~			~~Table of Contents~~
			~~NOTES~~			~~Index to Notes~~

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 45 to the Consolidated Financial Statements provides the fair value and classification of these instruments.

As of ~~August~~May 1, ~~2020,~~2021, January 30, 2021, and ~~August 3, 2019,~~May 2, 2020, we were party to interest rate swaps with notional amounts totaling $1.5 billion. We pay a ~~variable~~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~~May 1, ~~2020,~~2021, and ~~August 3, 2019.~~May 2, 2020.


TARGET CORPORATION						Q1 2021 Form 10-Q			10


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

As of ~~August~~May 1, 2021, January 30, 2021, and May 2, 2020, we were party to forward-starting interest rate swaps with notional amounts totaling $250 ~~million~~million. We use these derivative financial instruments, which have been designated as cash flow hedges, to hedge the interest rate exposure of anticipated future debt issuances. We designated these derivative financial instruments as cash flow hedges. We assess, both at inception and on an ongoing basis, whether the derivative financial instrument is highly effective in offsetting changes in cash flows of the hedged item and whether it is probable that the hedged forecasted transaction will occur. As of ~~August~~May 1, ~~2020, a $12 million loss was recorded in~~2021, Accumulated Other Comprehensive Loss ~~and~~(AOCI) included $17 million that will be reclassified toand reduce Net Interest Expense when the forecasted transaction affects earnings.


Effect of Hedges on Debt
(millions)		August 1, 2020		February 1, 2020		August 3, 2019
Effect of Hedges on Debt (millions)								Effect of Hedges on Debt (millions)	May 1, 2021		January 30, 2021		May 2, 2020

Long-term debt and other borrowings	Long-term debt and other borrowings							Long-term debt and other borrowings
Carrying amount of hedged debt	Carrying amount of hedged debt	$	1,732	$	1,630	$	1,600	Carrying amount of hedged debt	$	1,627	$	1,677	$	1,721
Cumulative hedging adjustments, included in carrying amount	Cumulative hedging adjustments, included in carrying amount	239		137		108		Cumulative hedging adjustments, included in carrying amount	132		183		228


Effect of Hedges on Net Interest Expense	Effect of Hedges on Net Interest Expense	Three Months Ended						Six Months Ended							Effect of Hedges on Net Interest Expense	Three Months Ended
(millions)	(millions)	August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019		(millions)	May 1, 2021		May 2, 2020

Gain (loss) on fair value hedges recognized in Net Interest Expense	Gain (loss) on fair value hedges recognized in Net Interest Expense									Gain (loss) on fair value hedges recognized in Net Interest Expense
Interest rate swap designated as fair value hedges	Interest rate swap designated as fair value hedges	$	11	$	86	$	102	$	101	Interest rate swap designated as fair value hedges	$	(51)	$	91
Hedged debt	Hedged debt	(11)		(86)		(102)		(101)		Hedged debt	51		(91)
Total	Total	$	—	$	—	$	—	$	—	Total	$	0	$	0

8. Income Taxes

For the three months ended May 1, 2021, our effective tax rate was 19.6 percent compared with 13.9 percent for the three months ended May 2, 2020, as higher pretax earnings diluted the tax-rate benefit from fixed and discrete items, such as employee share-based compensation and the sale of Dermstore. Additionally, the favorable resolution of certain income tax matters resulted in a $44 million discrete tax benefit.

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 ~~(ASR)~~ arrangements, and other privately negotiated transactions with financial institutions.

Share Repurchase Activity Three Months Ended Six Months Ended
(millions, except per share data) August 1,
2020
August 3,
2019 ^(a)
August 1,
2020
August 3,
2019 ^(a)
Number of shares purchased — 4.3 5.7 7.9
Average price paid per share $ — $ 80.02 $ 107.58 $ 78.63
Total investment $ — $ 341 $ 609 $ 618

^(a)This table includes activity related to the ASR arrangement entered in first quarter 2019 because final settlement occurred in second quarter 2019. Under the ASR arrangement, we repurchased 4.2 million shares for a total cash investment of $340 million. We did not enter into any new ASR arrangements during second quarter 2019.


Share Repurchase Activity	Three Months Ended
(millions, except per share data)	May 1, 2021		May 2, 2020
Number of shares purchased	6.1		5.7
Average price paid per share	$	190.77	$	107.58
Total investment	$	1,165	$	609

~~In March 2020, we suspended share repurchase activity.~~


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			11


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

9.10. Pension Benefits

We provide pension plan benefits to eligible team members.


Net Pension Benefits Expense	Net Pension Benefits Expense		Three Months Ended						Six Months Ended							Net Pension Benefits Expense	Three Months Ended
(millions)	(millions)	Classification	August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019		(millions)	Classification	May 1, 2021		May 2, 2020
Service cost benefits earned	Service cost benefits earned	SG&A Expenses	$	25	$	23	$	51	$	46	Service cost benefits earned	SG&A	$	24	$	26
Interest cost on projected benefit obligation	Interest cost on projected benefit obligation	Net Other (Income) / Expense	29		37		59		74		Interest cost on projected benefit obligation	Net Other (Income) / Expense	24		30
Expected return on assets	Expected return on assets	Net Other (Income) / Expense	(60)		(62)		(121)		(124)		Expected return on assets	Net Other (Income) / Expense	(59)		(61)
Amortization of losses	Amortization of losses	Net Other (Income) / Expense	32		16		64		31		Amortization of losses	Net Other (Income) / Expense	29		32
Amortization of prior service cost	Amortization of prior service cost	Net Other (Income) / Expense	(3)		(3)		(6)		(5)		Amortization of prior service cost	Net Other (Income) / Expense	0		(3)

Total	Total		$	23	$	11	$	47	$	22	Total		$	18	$	24

~~10.~~11. Accumulated Other Comprehensive Loss


Change in Accumulated Other Comprehensive Loss	Change in Accumulated Other Comprehensive Loss	Cash Flow Hedges		Currency Translation Adjustment		Pension		Total		Change in Accumulated Other Comprehensive Loss	Cash Flow Hedges		Currency Translation Adjustment			Pension		Total
(millions)	(millions)														(millions)					Pension		Total
February 1, 2020		$	(12)	$	(19)	$	(837)	$	(868)
January 30, 2021										January 30, 2021	$	(3)	$	(18)		$	(735)			$	(756)
Other comprehensive income before reclassifications, net of tax	Other comprehensive income before reclassifications, net of tax	(9)		—		—		(9)		Other comprehensive income before reclassifications, net of tax	9		0			0		9
Amounts reclassified from AOCI, net of tax	Amounts reclassified from AOCI, net of tax	—		—		44		44		Amounts reclassified from AOCI, net of tax	0		0			22		22
August 1, 2020		$	(21)	$	(19)	$	(793)	$	(833)
May 1, 2021										May 1, 2021	$	6	$	(18)		$	(713)	$	(725)


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			12


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

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Financial Summary

~~Second~~First quarter ~~2020 includes~~2021 included the following notable items:

•GAAP diluted earnings per share ~~were $3.35.~~was $4.17.

•Adjusted diluted earnings per share ~~were $3.38.~~was $3.69.

•Total revenue increased ~~24.7~~23.4 percent, driven by an increase in comparable sales.

•Comparable sales increased ~~24.3~~22.9 percent, driven by ~~an 18.8~~a 17.1 percent increase in ~~average transaction amount.~~traffic.

◦Comparable ~~store~~stores originated sales grew ~~10.9~~18.0 percent.

◦~~Digital channel~~Comparable digitally originated sales increased ~~195 percent, contributing 13.4 percentage points to comparable sales growth.~~50.2 percent.

•Operating income of ~~$2.3~~$2.4 billion was ~~73.8~~407 percent higher than the comparable prior-year period.

•We recognized a $335 million pretax gain on the sale of Dermstore.

Sales were ~~$22.7~~$23.9 billion for the three months ended ~~August~~May 1, ~~2020,~~2021, an increase of $4.5 billion, or ~~24.8~~23.3 percent, from the ~~same period in the prior year. Operating cash~~comparable prior-year period. Cash flow provided by ~~continuing operations~~operating activities was ~~$5.1~~$1.1 billion for the ~~six~~three months ended ~~August~~May 1, ~~2020, an increase~~2021, a decrease of ~~$2.3~~$0.1 billion, or ~~82.1~~(11.3) percent, from ~~$2.8~~$1.3 billion for the ~~six~~three months ended ~~August 3, 2019.~~May 2, 2020.


Earnings Per Share from Continuing Operations		Three Months Ended												Six Months Ended
				August 1, 2020			August 3, 2019			Change			August 1, 2020			August 3, 2019			Change
Earnings Per Share																			Earnings Per Share	Three Months Ended
																				May 1, 2021		May 2, 2020		Change
GAAP diluted earnings per share	GAAP diluted earnings per share	$	3.35		$	1.82		84.4	%		$	3.91		$	3.34		17.0	%	GAAP diluted earnings per share	$	4.17	$	0.56	643.2	%
Adjustments	Adjustments	0.03			—						0.06			—					Adjustments	(0.47)		0.03
Adjusted diluted earnings per share	Adjusted diluted earnings per share	$	3.38		$	1.82		85.7	%		$	3.96		$	3.34		18.6	%	Adjusted diluted earnings per share	$	3.69	$	0.59	525.0	%

Note: Amounts may not foot due to rounding. Adjusted diluted earnings per share ~~from continuing operations~~ (Adjusted EPS), a non-GAAP metric, excludes the impact of certain items. Management believes that Adjusted EPS is useful in providing period-to-period comparisons of the results of our ~~continuing~~ operations. A reconciliation of non-GAAP financial measures to GAAP measures is ~~provided~~provided onpage ~~19.~~18.

We report after-tax return on invested capital (ROIC) ~~from continuing operations~~ because we believe ROIC provides a meaningful measure of our ~~capital-allocation~~capital allocation effectiveness over time. For the trailing twelve months ended ~~August~~May 1, ~~2020,~~2021, after-tax ROIC was ~~17.2~~30.7 percent, compared with ~~15.2~~13.4 percent for the trailing twelve months ended ~~August 3, 2019.~~May 2, 2020. The calculation of ROIC is provided onon page ~~21.~~19.

~~Impact of~~ COVID-19

On March 11, 2020, the World Health Organization declared the novel coronavirus disease (COVID-19) a pandemic, and on March 13, 2020, the United States declared a national emergency. The rapid development and fluidity of this situation limits our ability to predict the ultimate impact of COVID-19 on our business, financial condition and financial performance, which could be material. States and cities have taken various measures in response to COVID-19, including mandating the closure of certain businesses and encouraging or requiring citizens to avoid large gatherings. We have implemented numerous safety measures to protect our guests and team members — such as mandating face masks for all team members and guests in our stores, more rigorous cleaning processes, providing disposable face masks, gloves and thermometers for team members, installing distancing markers, limiting guest levels within our stores, and installing partitions at all stores. We have also reduced store hours to support increased cleaning and replenishment efforts and implemented quantity limits on certain high-demand merchandise. In addition, we have reserved certain store hours for guests with increased vulnerability to COVID-19. To date all of our stores, digital channels, and distribution centers remain open.

As the ~~crisis~~COVID-19 pandemic has evolved, we have experienced unusually strong sales, as guests rely on Target for essential items like food, medicine, cleaning products, and household stock-up ~~items.~~items, as well as merchandise associated with guests spending more time at home. Underlying this trend, we ~~saw~~have seen significant volatility in our sales ~~mix, including both~~ category ~~sales~~and channel mix, ~~and the mix of sales in our stores and digital channels,~~ including same-day fulfillment options.

•During the first quarter ~~comparable sales increased 10.8 percent, reflecting a 0.9 percent increase~~of 2021, strength in store originated comparable sales and a 141 percent increase in digitally originated comparable sales. The quarter began with strength across our multi-category portfolio, followed by a shift to strong comparable sales growth in our Food and Beverage and Beauty and Household Essentials core merchandising categories and significant comparable sales declines in Apparel and Accessories. Comparable sales in Apparel and Accessories recovered notably beginning mid-April.


~~TARGET CORPORATION~~						~~Q2 2020 Form 10-Q~~			13


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

•During the second quarter, comparable sales increased 24.3 percent, reflecting a 10.9 percent increase in store originated comparable sales and a 195 percent increase in digitally originated comparable sales. Comparable sales growth was strongcontinued across our multi-category portfolio, with ~~slightly~~significantly higher growth in ~~lower-margin~~our higher-margin Apparel & Accessories and Home Furnishings & Décor core merchandise categories. ~~Monthly variability~~Comparable sales growth was strongest in Apparel & Accessories, which experienced a significant decline during the first quarter of 2020, Additionally, strength above the chain average continued in Hardlines. During the first quarter of 2020, comparable sales ~~continued, with comparable~~growth was strongest in our lower-margin Hardlines, Food & Beverage and Beauty & Household Essentials categories. Note 4 to the Financial Statements presents sales ~~increases of 32.9 percent in May, 21.4 percent in June, and 19.7 percent in July.~~by category.

~~For the six months ended August 1, 2020, gross margin has been~~ ~~negatively impacted~~ by changes in both our category and channel sales mix, as well as actions that we have taken to allow us to better fulfill guest demand for essentials. Additionally, gross margin reflects COVID-19-related investments in pay and benefits for our supply chain team members.

Our SG&A expenses have also been significantly impacted by incremental costs related to investments in pay and benefits for store team members, the spikes in merchandise volume in stores and the supply chain, incremental safety and cleaning supplies, and the impact of additional team member hours dedicated to more rigorous cleaning routines in our facilities.

To support our team and minimize potential disruptions in their work to serve our guests, we have modified our plans for some of our strategic initiatives, including our previously announced remodel program. We have completed approximately 130 remodels in 2020, down from the previous expectation of approximately 300. Similarly, we now expect to open up to 30 new small format stores in 2020, rather than the 36 previously announced.

During the six months ended August 1, 2020, we issued $2.5 billion of 5-year and 10-year notes in an effort to increase our cash on hand. Additionally, we entered into a $900 million 364-day credit facility, increasing our total undrawn committed credit facilities to $3.4 billion. Our dividend policy remains unchanged; however, we have temporarily suspended share repurchase activity due to continued uncertainty in the current environment. The ~~Liquidity and Capital Resources~~ ~~section provides additional information.~~

~~Analysis of Results of Operations~~

Summary of Operating Income Three Months Ended Six Months Ended
(dollars in millions) August 1,
2020 August 3,
2019 Change August 1,
2020 August 3,
2019 Change
Sales $ 22,696 $ 18,183 24.8 % $ 42,067 $ 35,584 18.2 %
Other revenue 279 239 16.6 523 465 12.3
Total revenue 22,975 18,422 24.7 42,590 36,049 18.1
Cost of sales 15,673 12,625 24.1 30,183 24,874 21.3
Selling, general and administrative expenses 4,460 3,912 14.0 8,520 7,575 12.5
Depreciation and amortization (exclusive of depreciation included in cost of sales) 542 561 (3.5) 1,119 1,142 (2.1)
Operating income $ 2,300 $ 1,324 73.8 % $ 2,768 $ 2,458 12.6 %

Rate Analysis Three Months Ended Six Months Ended
August 1,
2020 August 3,
2019 August 1,
2020 August 3,
2019
Gross margin rate 30.9 % 30.6 % 28.3 % 30.1 %
SG&A expense rate 19.4 21.2 20.0 21.0
Depreciation and amortization (exclusive of depreciation included in cost of sales) expense rate 2.4 3.0 2.6 3.2
Operating income margin rate 10.0 7.2 6.5 6.8

~~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.~~


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			1413


			MANAGEMENT'S DISCUSSION AND ANALYSIS			Table of Contents
			ANALYSIS OF OPERATIONS			Index to Notes

Analysis of Results of Operations


Summary of Operating Income	Three Months Ended
(dollars in millions)	May 1, 2021		May 2, 2020		Change
Sales	$	23,879	$	19,371	23.3	%
Other revenue	318		244		30.4
Total revenue	24,197		19,615		23.4
Cost of sales	16,716		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	%


Rate Analysis	Three Months Ended
	May 1, 2021		May 2, 2020
Gross margin rate	30.0	%	25.1	%
SG&A expense rate	18.6		20.7
Depreciation and amortization expense rate (exclusive of depreciation included in cost of sales)	2.5		2.9
Operating income margin rate	9.8		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.

Sales

Sales include all merchandise sales, net of expected returns, and our estimate of gift card breakage. We use comparable sales to evaluate the performance of our stores and digital channel sales by measuring the change in sales for a period over the comparable prior-year period of equivalent length. Comparable sales include all sales ~~except~~—except sales from stores open less than 13 months, digital acquisitions we have owned less than 13 months, stores that have been closed, and digital acquisitions that we no longer operate. Comparable sales measures vary across the retail industry. As a result, our comparable sales calculation is not necessarily comparable to similarly titled measures reported by other companies. Digitally originated sales include all sales initiated through mobile applications and our websites. Our stores fulfill the majority of digitally originated sales, including shipment from stores to guests, store Order ~~Pick Up~~Pickup or Drive Up, and delivery via our wholly owned subsidiary, Shipt. Digitally originated sales may also be fulfilled through our distribution centers, our vendors, or other third parties.

Sales growth –— from both comparable sales and new stores –— represents an important driver of our long-term profitability. We expect that comparable sales growth will drive the majority of our total sales growth. We believe that our ability to successfully differentiate our guests’ shopping experience through a careful combination of merchandise assortment, price, convenience, guest experience, and other factors will, over the long-term, drive both increasing shopping frequency (traffic) and the amount spent each visit (average transaction amount).


TARGET CORPORATION						Q1 2021 Form 10-Q			14


			MANAGEMENT'S DISCUSSION AND ANALYSIS			Table of Contents
			ANALYSIS OF OPERATIONS			Index to Notes

The increase in sales during the three ~~and six~~ months ended ~~August~~May 1, ~~2020,~~2021, is due to a comparable sales increase of ~~24.3~~22.9 percent ~~and 17.7 percent, respectively,~~ and the contribution from new stores. The COVID-19 pandemic has affected the amount and mix of sales across channels and categories.


Comparable Sales	Comparable Sales	Three Months Ended						Six Months Ended							Comparable Sales	Three Months Ended
		August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019			May 1, 2021		May 2, 2020
Comparable sales change	Comparable sales change	24.3	%	3.4	%	17.7	%	4.1	%	Comparable sales change	22.9	%	10.8	%
Drivers of change in comparable sales	Drivers of change in comparable sales									Drivers of change in comparable sales
Number of transactions	Number of transactions	4.6		2.4		1.6		3.3		Number of transactions	17.1		(1.5)
Average transaction amount	Average transaction amount	18.8		0.9		15.8		0.7		Average transaction amount	5.0		12.5

Contribution to Comparable Sales Change Three Months Ended Six Months Ended
August 1,
2020 August 3,
2019 August 1,
2020 August 3,
2019
Stores originated channel comparable sales change 10.9 % 1.5 % 6.0 % 2.1 %
Contribution from digitally originated sales 13.4 1.8 11.7 1.9
Total comparable sales change 24.3 % 3.4 % 17.7 % 4.1 %

~~Note: Amounts may not foot due to rounding.~~


Comparable Sales by Channel	Three Months Ended
	May 1, 2021		May 2, 2020
Stores originated comparable sales change	18.0	%	0.9	%
Digitally originated comparable sales change	50.2		140.6


Sales by Channel	Sales by Channel	Three Months Ended						Six Months Ended							Sales by Channel	Three Months Ended
		August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019			May 1, 2021		May 2, 2020
Stores originated	Stores originated	82.8	%	92.7	%	83.7	%	92.8	%	Stores originated	81.7	%	84.7	%
Digitally originated	Digitally originated	17.2		7.3		16.3		7.2		Digitally originated	18.3		15.3
Total	Total	100	%	100	%	100	%	100	%	Total	100	%	100	%


Sales by Fulfillment Channel	Three Months Ended
	May 1, 2021		May 2, 2020
Stores	96.3	%	96.7	%
Other	3.7		3.3
Total	100	%	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.


Sales by Product Category	Three Months Ended
	May 1, 2021		May 2, 2020
Apparel and accessories	18	%	14	%
Beauty and household essentials	27		30
Food and beverage	20		24
Hardlines	17		15
Home furnishings and décor	18		17
Total	100	%	100	%

The collective interaction of a broad array of macroeconomic, competitive, and consumer behavioral factors, as well as sales mix and the transfer of sales to new stores, makes further analysis of sales metrics infeasible.


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			15


			MANAGEMENT'S DISCUSSION AND ANALYSIS			Table of Contents
			ANALYSIS OF OPERATIONS			Index to Notes

Sales by Product Category Three Months Ended Six Months Ended
August 1,
2020 August 3,
2019 August 1,
2020 August 3,
2019
Apparel and accessories 18 % 20 % 16 % 20 %
Beauty and household essentials 27 28 29 28
Food and beverage 19 19 21 20
Hardlines 16 14 15 14
Home furnishings and décor 20 19 19 18
Total 100 % 100 % 100 % 100 %

The collective interaction of a broad array of macroeconomic, competitive, and consumer behavioral factors, as well as sales mix, and transfer of sales to new stores makes further analysis of sales metrics infeasible. As previously discussed, we believe that COVID-19 has had a significant impact on the mix of sales amongst our sales channels and categories.

We monitor the percentage of purchases that are paid for using RedCards (RedCard Penetration) because our internal analysis has indicated that a meaningful portion of the incremental purchases on RedCards are also incremental sales for Target. Guests receive a 5 percent discount on virtually all purchases when they use a RedCard at Target. RedCard sales increased for the three months ended May 1, 2021 and May 2, 2020; however, RedCard penetration declined as total Sales increased at a faster pace.

RedCard Penetration Three Months Ended Six Months Ended
August 1,
2020 August 3,
2019 August 1,
2020 August 3,
2019
Target Debit Card 11.8 % 12.5 % 12.2 % 12.8 %
Target Credit Cards 8.7 10.7 9.2 10.6
Total RedCard Penetration 20.5 % 23.2 % 21.4 % 23.4 %

~~Note: Amounts may not foot due to rounding.~~


RedCard Penetration	Three Months Ended
	May 1, 2021		May 2, 2020
Target Debit Card	12.1	%	12.7	%
Target Credit Cards	8.4		9.7
Total RedCard Penetration	20.5	%	22.4	%


~~TARGET CORPORATION~~						~~Q2 2020 Form 10-Q~~			16


			~~MANAGEMENT'S DISCUSSION AND ANALYSIS~~			~~Table of Contents~~
			~~ANALYSIS OF OPERATIONS~~			~~Index to Notes~~

Gross Margin Rate

For the three months ended ~~August~~May 1, ~~2020,~~2021, our gross margin rate was ~~30.9~~30.0 percent compared with ~~30.6~~25.1 percent in the comparable ~~period last year.~~prior-year period. This increase ~~reflected the~~reflected:

•The benefit of merchandising actions, including exceptionally low promotional and clearance markdown rates, in this year’s results and purchase order cancellation fees and inventory impairments in last year’s results;

•Favorable category mix driven by strength in higher margin categories including Apparel & Accessories and Home Furnishings & Décor; and

•The net impact of ~~merchandising strategies, primarily favorability in clearance and promotional markdowns, and~~other factors, most notably the ~~favorable~~margin impact of ~~a change in~~ our returns estimate for sales during the temporary returns suspension period in the first quarter of 2020. The increase was partially offset by increased digital fulfillment and supply chain costs (driven by unusually strong growth in digital volume and higher pay and benefit costs classified within Cost of Sales, including incremental pay and benefits due to COVID-19) and unfavorable category sales mix, as sales growth was strongest in lower-margin categories.

For the six months ended August 1, 2020, our gross margin rate was 28.3 percent compared with 30.1 percent in the comparable period last year. This decrease reflected increased digital fulfillment and supply chain costs (driven by unusually strong growth in digital volume and the impact of higher pay and benefit costs classified within Cost of Sales, including incremental pay and benefits due to COVID-19) and unfavorable category sales mix, as sales growth was strongest in lower-margin categories. The decrease was partially offset by the net impact of merchandising strategies, primarily favorability in clearance and promotional markdowns. Sales returns relating to the temporary returns suspension period during the first quarter of 2020 did not notably affect our year-to-date gross margin rate.

Selling, General, and Administrative Expense Rate

For the three ~~and six~~ months ended ~~August~~May 1, ~~2020,~~2021, our SG&A expense rate was ~~19.4~~18.6 percent ~~and 20.0 percent, respectively,~~ compared with ~~21.2~~20.7 percent ~~and 21.0 percent, respectively,~~ in the comparable ~~periods last year.~~prior-year period. Incremental team member pay and benefits, including higher wages and ~~investments to protect~~bonus expense, represented the ~~health and safety of guests represented approximately $400 million~~vast majority of the ~~$548~~$449 million increase in SG&A expenses ~~for the three months ended August 1, 2020, and approximately $600 million of the $945 million increase for the six months ended August 1, 2020,~~ compared with the ~~prior year periods.~~prior-year period. From a rate perspective, these increased costs were more than offset by leverage resulting from strong revenue growth.


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			1716


			MANAGEMENT'S DISCUSSION AND ANALYSIS			Table of Contents
			ANALYSIS OF OPERATIONS			Index to Notes

Store Data


Change in Number of Stores	Change in Number of Stores	Three Months Ended			Six Months Ended				Change in Number of Stores	Three Months Ended
		August 1, 2020	August 3, 2019	August 1, 2020	August 3, 2019		May 1, 2021	May 2, 2020
Beginning store count	Beginning store count	1,871	1,851	1,868	1,844	Beginning store count	1,897	1,868
Opened	Opened	—	4	3	11	Opened	12	3
Closed	Closed	—	(2)	—	(2)	Closed	—	—

Ending store count	Ending store count	1,871	1,853	1,871	1,853	Ending store count	1,909	1,871


Number of Stores and Retail Square Feet	Number of Stores and Retail Square Feet	Number of Stores						Retail Square Feet ^(a)									Number of Stores and Retail Square Feet	Number of Stores							Retail Square Feet (a)
			August 1, 2020	February 1, 2020	August 3, 2019		August 1, 2020	February 1, 2020	August 3, 2019		Number of Stores and Retail Square Feet	May 1, 2021		January 30, 2021		May 2, 2020				May 1, 2021		January 30, 2021		May 2, 2020
170,000 or more sq. ft.	170,000 or more sq. ft.	272	272	272		48,613	48,619	48,619	170,000 or more sq. ft.	273			272				48,798		48,798		48,613
50,000 to 169,999 sq. ft.	50,000 to 169,999 sq. ft.	1,505	1,505	1,499		189,224	189,227	188,711	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.	49,999 or less sq. ft.	94	91	82		2,745	2,670	2,357	49,999 or less sq. ft.	126		115		94				3,690		3,342		2,745
Total	Total	1,871	1,868	1,853		240,582	240,516	239,687	Total	1,909		1,897		1,871				242,106		241,648		240,584

^(a)In thousands, reflects total square feet less office, distribution center, and vacant space.

Other Performance Factors

Net Interest Expense

Net interest expense was $108 million for the three months ended May 1, 2021, and $117 million for the three months ended May 2, 2020. The decrease in net interest expense was primarily due to a lower weighted-average interest rate on our long-term debt for the three months ended May 1, 2021, compared with the three months ended May 2, 2020.

Net Other (Income) / Expense

Net Other (Income) / Expense was $(343) million for the three months ended May 1, 2021, and $22 million for the three months ended May 2, 2020. The increase was due to the $335 million gain on the February 2021 sale of Dermstore. Note 3 to the Financial Statements provides additional information.

Provision for Income Taxes

Our effective income tax rate ~~from continuing operations~~ for the three ~~and six~~ months ended ~~August~~May 1, ~~2020,~~2021, was ~~22.8~~19.6 percent, ~~and 21.6~~compared with 13.9 percent ~~respectively, compared with 23.0 percent and 22.7 percent, respectively, for~~in the comparable ~~periods last year.~~prior-year period. The ~~effective~~increase reflects significantly higher earnings, partially offset by the impact of discrete tax ~~rate for~~ benefits in the ~~six~~ ~~months ended August 1, 2020,~~ ~~reflects~~quarter, including a ~~larger rate~~ $44 million benefit resulting from ~~discrete items, primarily related to share-based payments, compared with~~ the ~~prior year~~resolution of certain income tax matters.


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			1817


			MANAGEMENT'S DISCUSSION AND ANALYSIS			Table of Contents
			RECONCILIATION OF NON-GAAP FINANCIAL MEASURES			Index to Notes

Reconciliation of Non-GAAP Financial Measures to GAAP Measures

To provide additional transparency, we have disclosed non-GAAP adjusted diluted earnings per share ~~from continuing operations~~ (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 ~~continuing~~ operations. This measure is not in accordance with, or an alternative to, ~~generally accepted accounting principles in the~~ U.S. ~~(GAAP).~~GAAP. The most comparable GAAP measure is diluted earnings per ~~share from continuing operations.~~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
August 1, 2020 August 3, 2019
(millions, except per share data) Pretax Net of Tax Per Share Amounts Pretax Net of Tax Per Share Amounts
GAAP diluted earnings per share from continuing operations $ 3.35 $ 1.82
Adjustments
Gain on investment ^(a)
$ (9) $ (6) $ (0.01) $ — $ — $ —
Other ^(b)
25 18 0.04 — — —
Adjusted diluted earnings per share from continuing operations $ 3.38 $ 1.82


Reconciliation of Non-GAAP Adjusted EPS	Reconciliation of Non-GAAP Adjusted EPS	Six Months Ended																						Reconciliation of Non-GAAP Adjusted EPS	Three Months Ended
		August 1, 2020										August 3, 2019											May 1, 2021				May 2, 2020
(millions, except per share data)	(millions, except per share data)	Pretax		Net of Tax		Per Share Amounts		Pretax		Net of Tax		Per Share Amounts		(millions, except per share data)	Pretax		Net of Tax		Per Share Amounts		Pretax		Net of Tax		Per Share Amounts
GAAP diluted earnings per share from continuing operations						$	3.91					$	3.34
GAAP diluted earnings per share														GAAP diluted earnings per share					$	4.17					$	0.56
Adjustments	Adjustments													Adjustments

Gain on Dermstore sale														Gain on Dermstore sale	$	(335)	$	(269)	$	(0.53)	$	—	$	—	$	—
Loss on investment ^(a)	Loss on investment ^(a)	$	12	$	9	$	0.02	$	—	$	—	$	—	Loss on investment (a)	—		—		—		21		15		0.03

Other ^(b)	Other ^(b)	25		18		0.04		—		—		—		Other (b)	41		30		0.06		—		—		—
Adjusted diluted earnings per share from continuing operations						$	3.96					$	3.34
Adjusted diluted earnings per share														Adjusted diluted earnings per share					$	3.69					$	0.59

Note: Amounts may not foot due to rounding.

^(a)~~Includes~~Represented an unrealized ~~(gain)~~/loss on our investment in Casper Sleep Inc., which iswas not core to our ~~continuing~~ operations. We sold this investment during the fourth quarter of 2020.

^(b)~~Includes store damage and inventory losses related to civil unrest.~~Represents asset impairment charges resulting from the consolidation of our headquarters office space.


~~TARGET CORPORATION~~						~~Q2 2020 Form 10-Q~~			19


			~~MANAGEMENT'S DISCUSSION AND ANALYSIS~~			~~Table of Contents~~
			~~RECONCILIATION OF NON-GAAP FINANCIAL MEASURES~~			~~Index to Notes~~

Earnings ~~from continuing operations~~ before interest expense and income taxes (EBIT) and earnings ~~from continuing operations~~ 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 from continuing operations.~~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 EBITDA	EBIT and EBITDA	Three Months Ended								Six Months Ended								EBIT and EBITDA	Three Months Ended
(dollars in millions) (unaudited)		August 1, 2020		August 3, 2019		Change		August 1, 2020		August 3, 2019		Change
Net earnings from continuing operations		$	1,690	$	938	80.3	%	$	1,974	$	1,730	14.1	%
(dollars in millions)														(dollars in millions)	May 1, 2021		May 2, 2020		Change
Net earnings														Net earnings	$	2,097	$	284	639.8	%
+ Provision for income taxes	+ Provision for income taxes	499		279		78.3		544		509		7.0		+ Provision for income taxes	512		45		1,017.1
+ Net interest expense	+ Net interest expense	122		120		1.9		239		246		(2.5)		+ Net interest expense	108		117		(7.6)
EBIT	EBIT	$	2,311	$	1,337	72.8	%	$	2,757	$	2,485	11.0	%	EBIT	$	2,717	$	446	508.7	%
+ Total depreciation and amortization ^(a)	+ Total depreciation and amortization ^(a)	604		624		(3.2)		1,245		1,267		(1.9)		+ Total depreciation and amortization (a)	667		641		4.1
EBITDA	EBITDA	$	2,915	$	1,961	48.6	%	$	4,002	$	3,752	6.7	%	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						~~Q2 2020~~Q1 2021 Form 10-Q			2018


			MANAGEMENT'S DISCUSSION AND ANALYSIS			Table of Contents
			RECONCILIATION OF NON-GAAP FINANCIAL MEASURES			Index to Notes

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	After-Tax Return on Invested Capital								After-Tax Return on Invested Capital
(dollars in millions)	(dollars in millions)						(dollars in millions)
		Trailing Twelve Months								Trailing Twelve Months
Numerator	Numerator	August 1, 2020		August 3, 2019		Numerator		May 1, 2021		May 2, 2020
Operating income	Operating income	$	4,968	$	4,395	Operating income		$	8,444	$	3,992
+ Net other income / (expense)	+ Net other income / (expense)	(28)		42		+ Net other income / (expense)		350		(26)
EBIT	EBIT	4,940		4,437		EBIT		8,794		3,966
+ Operating lease interest ^(a)	+ Operating lease interest ^(a)	87		85		+ Operating lease interest (a)		85		87
- Income taxes ^(b)	- Income taxes ^(b)	1,076		937		- Income taxes (b)		1,864		855
Net operating profit after taxes	Net operating profit after taxes	$	3,951	$	3,585	Net operating profit after taxes		$	7,015	$	3,198


Denominator	Denominator	August 1, 2020			August 3, 2019			August 4, 2018		Denominator	May 1, 2021			May 2, 2020			May 4, 2019
Current portion of long-term debt and other borrowings	Current portion of long-term debt and other borrowings	$	109		$	1,153		$	1,044	Current portion of long-term debt and other borrowings	$	1,173		$	168		$	1,056
+ Noncurrent portion of long-term debt	+ Noncurrent portion of long-term debt	14,188			10,365			10,108		+ Noncurrent portion of long-term debt	11,509			14,073			11,357
+ Shareholders' investment	+ Shareholders' investment	12,578			11,836			11,167		+ Shareholders' investment	14,959			11,169			11,117
+ Operating lease liabilities ^(c)	+ Operating lease liabilities ^(c)	2,448			2,285			2,183		+ Operating lease liabilities (c)	2,563			2,448			2,231
- Cash and cash equivalents	- Cash and cash equivalents	7,284			1,656			1,180		- Cash and cash equivalents	7,816			4,566			1,173
Invested capital	Invested capital	$	22,039		$	23,983		$	23,322	Invested capital	$	22,388		$	23,292		$	24,588
Average invested capital ^(d)	Average invested capital ^(d)	$	23,011		$	23,652				Average invested capital (d)	$	22,840		$	23,940

After-tax return on invested capital	After-tax return on invested capital	17.2		%	15.2		%			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 Expenses.~~&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, ~~for continuing operations,~~ which were ~~21.4~~21.0 percent and ~~20.7~~21.1 percent for the trailing twelve months ended ~~August~~May 1, ~~2020,~~2021, and ~~August 3, 2019,~~May 2, 2020, respectively. For the trailing twelve months ended ~~August~~May 1, ~~2020,~~2021, and ~~August 3, 2019,~~May 2, 2020, includes tax effect of ~~$1.1~~$1.8 billion and ~~$919~~$837 million, respectively, related to EBIT, and ~~$19 million and~~ $18 million ~~respectively,~~ 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.~~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.


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			2119


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

Analysis of Financial Condition

Liquidity and Capital Resources

Capital Allocation

We follow a disciplined and balanced approach to capital allocation based on the following priorities, ranked in order of importance: first, we fully invest in opportunities to profitably grow our business, create sustainable long-term value, and maintain our current operations and assets; second, we maintain a competitive quarterly dividend and seek to grow it annually; and finally, we return any excess cash to shareholders by repurchasing shares within the limits of our credit rating goals.

We believe our sources of liquidity will continue to be adequate to maintain operations, finance anticipated expansion and strategic initiatives, fund debt maturities, and pay dividends. In response to COVID-19, we have suspended our share repurchase program. We continue to anticipate ample access to commercial paper and long-term financing.

Our cash and cash equivalents balance was ~~$7.3~~$7.8 billion, ~~$2.6~~$8.5 billion, and ~~$1.7~~$4.6 billion ~~at August~~as of May 1, ~~2020, February 1, 2020,~~2021, January 30, 2021, and ~~August 3, 2019,~~May 2, 2020, respectively. Our cash and cash equivalents balance includes short-term investments of ~~$6.4~~$6.9 billion, ~~$1.8~~$7.6 billion, and ~~$796 million~~$3.6 billion as of ~~August~~May 1, ~~2020, February 1, 2020,~~2021, January 30, 2021, and ~~August 3, 2019,~~May 2, 2020, respectively. Our investment policy is designed to preserve principal and liquidity of our short-term investments. This policy allows investments in large money market funds or in highly rated direct short-term instruments that mature in 60 days or less. We also place dollar limits on our investments in individual funds or instruments.

Operating Cash Flows

~~Operating cash flow~~Cash flows provided by ~~continuing operations was $5.1~~operating activities were $1.1 billion for the ~~six~~three months ended ~~August~~May 1, ~~2020,~~2021, compared with ~~$2.8~~$1.3 billion for the ~~six~~three months ended ~~August 3, 2019.~~ ~~The increase reflects~~ May 2, 2020. For the three months ended May 1, 2021, operating cash flows reflect stronger operating ~~performance combined with~~ ~~higher payables leverage during the~~ ~~six~~ ~~months ended~~ ~~August 1, 2020, due to increased inventory turnover~~ ~~driven~~results, offset by ~~strong sales, compared with~~ higher net settlement of accounts payable ~~during~~and incentive compensation payments, compared with the ~~six~~three months ended ~~August 3, 2019~~, ~~resulting from~~ ~~elevated inventory and accounts payable levels as of February~~May 2, ~~2019.~~ Additionally, operating cash flows for the six months ended August 1, 2020, reflect increased payroll-related liabilities, including the deferral of employer social security tax payments. Also, lower first quarter 2020 pretax earnings resulted in a decrease in year-to-date income tax payments.2020.

Inventory

Inventory was ~~$8.9~~$10.5 billion as of ~~August~~May 1, ~~2020,~~2021, compared with ~~$9.0~~$10.7 billion and ~~$9.1~~$8.6 billion at ~~February 1,~~January 30, 2021, and May 2, 2020, ~~and August 3, 2019,~~ respectively. The ~~decrease~~increase over the balance as of May 2, 2020, reflects efforts to align inventory with sales trends. Additionally, the lower inventory balance as of May 2, 2020, reflected the impact of elevated sell-through rates in ~~longer-lead time~~high-demand merchandise categories~~, partially offset by increases~~ and efforts to reduce inventory levels in ~~Food and Beverage and Beauty and Household Essentials inventory~~certain discretionary categories to align with evolving sales ~~trends.~~trends early in the pandemic.

Investing Cash Flows

~~Cash flow for investing activities~~Investing cash flows included capital ~~expenditures~~investments of ~~$1.4 billion~~$540 million and $751 million for the ~~six~~three months ended ~~August~~May 1, 2021, and May 2, 2020, ~~and August 3, 2019. During~~respectively. We continue to expect full-year capital investments of approximately $4 billion, with the ~~six~~majority of those investments occurring in the second half of this year. For the three months ended ~~August~~May 1, ~~2020, we completed new store and remodel projects that were in process as~~2021, investing cash flows includes $356 million of proceeds from the ~~COVID-19 crisis developed. However, in response to COVID-19, we have modified plans for some~~sale of ~~our strategic initiatives including store remodels and new store openings. We expect full year 2020 capital expenditures to be at a lower level than in 2019~~.Dermstore.

Dividends

We paid dividends totaling ~~$330~~$340 million ($0.68 per share) for the three months ended May 1, 2021, and $332 million ($0.66 per share) ~~and $662 million ($1.32 per share)~~ for the three ~~and six~~ months ended ~~August 1,~~May 2, 2020, ~~respectively, and $328 million ($0.64 per share) and $658 million ($1.28 per share) for the three and six months ended August 3, 2019, respectively,~~ a per share increase of ~~3.1~~3.0 percent. We declared dividends totaling ~~$344~~$343 million ($0.68 per share) during the ~~second~~first quarter of 2021 and $333 million ($0.66 per share) during the first quarter of 2020, a per share increase of 3.0 ~~percent over the $341 million ($0.66 per share) of declared dividends during the second quarter of 2019.~~percent. We have paid dividends every quarter since our 1967 initial public offering, and it is our intent to continue to do so in the future.

Share Repurchase

We returned $1.2 billion to shareholders through share repurchase during the three months ended May 1, 2021. See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds of this Quarterly Report on Form 10-Q and Note 9 to the Financial Statements for more information.


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			2220


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

~~Share Repurchase~~

~~We returned $609 million to shareholders through share repurchase during the six months ended August 1, 2020. We did not repurchase any shares during the three months ended August 1, 2020. See~~ ~~Part II~~, ~~Item 2~~, ~~Unregistered Sales of Equity Securities and Use of Proceeds~~ ~~of this Quarterly Report on Form 10-Q and~~ ~~Note 8~~ ~~to the Consolidated Financial Statements for more information.~~

Financing

Our financing strategy is to ensure liquidity and access to capital markets, to maintain a balanced spectrum of debt maturities, and to manage our net exposure to floating interest rate volatility. Within these parameters, we seek to minimize our borrowing costs. Our ability to access the long-term debt and commercial paper markets has provided us with ample sources of liquidity. Our continued access to these markets depends on multiple factors, including the condition of debt capital markets, our operating performance, and maintaining strong credit ratings. As of ~~August~~May 1, ~~2020,~~2021, our credit ratings were as follows:


Credit Ratings	Moody’s	Standard and Poor’s	Fitch
Long-term debt	A2	A	A-
Commercial paper	P-1	A-1	F1

If our credit ratings were lowered, our ability to access the debt markets, our cost of funds, and other terms for new debt issuances could be adversely impacted. Each of the credit rating agencies reviews its rating periodically and there is no guarantee our current credit ratings will remain the same as described above.

~~In March 2020, we issued $2.5 billion of debt.~~ ~~Notes 6~~We obtain short-term financing from time to time under our commercial paper program. No balances were outstanding at any time during the three months ended May 1, 2021, and 7 ~~to the Consolidated Financial Statements provide additional information.~~

May 2, 2020. We have additional liquidity through a committed ~~$900 million 364-day revolving credit facility obtained through a group of banks in April 2020, which expires in April 2021, and an existing~~ $2.5 billion revolving credit facility ~~obtained through a group of banks, which~~that expires in October 2023. No balances were outstanding ~~under either credit facility~~ at any time during ~~2020~~2021 or ~~2019.~~2020.

Most of our long-term debt obligations contain covenants related to secured debt levels. In addition to a secured debt level covenant, our credit ~~facilities~~facility also ~~contain~~contains a debt leverage covenant. We are, and expect to remain, in compliance with these covenants. Additionally, as of ~~August~~May 1, ~~2020,~~2021, no notes or debentures contained provisions requiring acceleration of payment upon a credit rating downgrade, except that certain outstanding notes allow the note holders to put the notes to us if within a matter of months of each other we experience both (i) a change in control and (ii) our long-term credit ratings are either reduced and the resulting rating is non-investment grade, or our long-term credit ratings are placed on watch for possible reduction and those ratings are subsequently reduced and the resulting rating is non-investment grade.

~~Contractual Obligations~~We believe our sources of liquidity will continue to be adequate to maintain operations, finance anticipated expansion and ~~Commitments~~

~~As of~~strategic initiatives, fund debt maturities, pay dividends, and execute purchases under our share repurchase program for the ~~date of this report, other than the new borrowings discussed in~~ ~~Note 6~~foreseeable future. We continue to ~~the Consolidated Financial Statements, there were no material changes~~anticipate ample access to ~~our contractual obligations~~commercial paper and ~~commitments outside the ordinary course of business since February 1, 2020, as reported in our 2019~~ ~~Form 10-K~~.long-term financing.

New Accounting Pronouncements

We do not expect any recently issued accounting pronouncements to have a material effect on our financial statements.


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			2321


			MANAGEMENT'S DISCUSSION AND ANALYSIS & SUPPLEMENTAL INFORMATION			Table of Contents
			FORWARD LOOKING STATEMENTS & CONTROLS AND PROCEDURES			Index to Notes

Forward-Looking Statements

This report contains forward-looking statements, which are based on our current assumptions and expectations. These statements are typically accompanied by the words “expect,” “may,” “could,” “believe,” “would,” “might,” “anticipates,” or similar words. The principal forward-looking statements in this report include: our financial performance, statements regarding the adequacy of and costs associated with our sources of liquidity, the funding of debt maturities, the continued execution of our share repurchase program, our expected capital expenditures and new lease commitments, the expected compliance with debt covenants, the expected impact of new accounting pronouncements, our intentions regarding future dividends, the expected return on plan assets, the expected outcome of, and adequacy of our reserves for, claims, litigation and the resolution of tax matters, the expected impact of changes in information technology systems, future responses to and effects of the COVID-19 pandemic, and changes in our assumptions and expectations.

All such forward-looking statements are intended to enjoy the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended. Although we believe there is a reasonable basis for the forward-looking statements, our actual results could be materially different. The most important factors which could cause our actual results to differ from our forward-looking statements are set forth in our description of risk factors included in Part I, Item 1A, Risk Factors of our Form 10-K for the fiscal year ended ~~February 1, 2020 and~~ ~~Part II~~, ~~Item 1A~~, ~~Risk Factors~~ ~~of our~~ ~~Form 10-Q~~ ~~for the quarter ended May 2, 2020,~~January 30, 2021, which should be read in conjunction with the forward-looking statements in this report. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update any forward-looking statement.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our primary risk exposures or management of market risks from those disclosed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk of our Form 10-K for the fiscal year ended ~~February 1, 2020.~~January 30, 2021.

Item 4. Controls and Procedures

Changes in Internal Control Over Financial Reporting

During the most recently completed fiscal quarter, the following changes materially affected, or are reasonably likely to materially affect, our internal control over financial reporting:

•We are in the process of a broad multi-year migration of many mainframe-based systems and middleware products to a modern platform, including systems and processes supporting inventory, sales, and supply chain-related transactions.

•~~In March 2020, as a result~~During the first quarter of ~~COVID-19,~~2021, we ~~temporarily suspended~~resumed our normal practice of annual physical inventory counts at our ~~stores. We resumed physical inventory counts in June 2020~~stores and are no longer using athe statistical sampling method ~~and we~~implemented during 2020 due to the COVID-19 pandemic. We have ~~continued to record~~recorded estimated losses related to shrink and markdowns based upon ~~historical rates.~~the results of the counts.

During the most recently completed fiscal quarter, no other changes in our internal control over financial reporting materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.


TARGET CORPORATION						Q1 2021 Form 10-Q			22


			MANAGEMENT'S DISCUSSION AND ANALYSIS & SUPPLEMENTAL INFORMATION			Table of Contents
			FORWARD LOOKING STATEMENTS & CONTROLS AND PROCEDURES			Index to Notes

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this quarterly report, we conducted an evaluation, under supervision and with the participation of management, including the chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934, as amended (Exchange Act). Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective at a reasonable assurance level. Disclosure controls and procedures are defined by Rules 13a-15(e) and 15d-15(e) of the Exchange Act as controls and other procedures that are designed to ensure that information required to be disclosed by us in reports filed with the SEC under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			2423


			SUPPLEMENTAL INFORMATION			Table of Contents
						Index to Notes

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

~~The following update to a previously reported proceeding~~No response is ~~being reported pursuant to~~required under Item 103 of Regulation ~~S-K:~~

~~On July 28, 2020, the U.S. Court of Appeals~~S-K, nor have there been any material developments for the Eighth Circuit affirmed the prior decision by the United States District Court for the District of Minnesota (the Court) dismissing the purported Employee Retirement Income Security Act of 1974 (ERISA) class actionany previously filed in the Court on August 30, 2017 (the Second ERISA Class Action). The Second ERISA Class Action involved claims arising from investments in Target stock by participants in or beneficiaries of the Target Corporation 401(k) Plan and the Target Corporation Ventures 401(k) Plan during Target’s expansion of retail operations into Canada and was previously described in Target’s annual report on ~~Form 10-K~~ ~~for the fiscal year ended February 1, 2020.~~reported legal proceedings.

Item 1A. Risk Factors

~~Other than as described in~~ ~~Part II~~, ~~Item~~ 1A, ~~Risk Factors~~ ~~of our~~ ~~Form 10-Q~~ ~~for the quarter ended May 2, 2020, there~~There have been no material changes to the risk factors described in Part I, Item 1A, Risk Factors of our Form 10-K for the fiscal year ended ~~February 1, 2020.~~January 30, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On September 19, 2019, our Board of Directors authorized a $5 billion share repurchase program with no stated expiration. We began ~~repurchasing~~repurchasing shares under the authorization during the first quarter of ~~2020, prior to suspending share repurchase activity in March~~ 2020. Under the program, we have repurchased ~~4.6~~10.7 million shares of common stock at an average price of ~~$105.80,~~$154.39, for a total investment of ~~$484 million. As of August 1, 2020, the dollar value of shares that may yet be purchased under the program is $4.5 billion. There were no~~$1.6 billion. The table below presents information with respect to Target common stock purchases made during the three ~~months~~months ended ~~August~~May 1, ~~2020,~~2021, by Target or any "affiliated purchaser" of Target, as defined in Rule 10b-18(a)(3) under the Exchange Act.


Share Repurchase Activity	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Programs
Period
January 31, 2021 through February 27, 2021
Open market and privately negotiated purchases	1,643,873	$	187.16	1,643,873	$	4,208,486,088
February 28, 2021 through April 3, 2021
Open market and privately negotiated purchases	2,381,931	180.85		2,381,931	3,777,714,147
April 4, 2021 through May 1, 2021
Open market and privately negotiated purchases	2,082,677	204.96		2,082,677	3,350,843,436
Total	6,108,481	$	190.77	6,108,481	$	3,350,843,436

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			2524


			SUPPLEMENTAL INFORMATION			Table of Contents
						Index to Notes

Item 6. Exhibits


(3)A						Amended and Restated Articles of Incorporation (as amended through June 9, 2010) ⁽¹⁾

(3)B						Bylaws (as amended through March 27, 2020) ⁽²⁾

~~(10)D~~						~~Target Corporation 2020 Long-Term Incentive Plan~~⁽³⁾

~~(10)T~~						~~Form of Restricted Stock Unit Agreement~~

~~(10)U~~						~~Form of Performance-Based Restricted Stock Unit Agreement~~

~~(10)V~~						~~Form of Performance Share Unit Agreement~~

~~(10)Y~~						~~Form of Non-Employee Director Restricted Stock Unit Agreement~~

(31)A						Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

(31)B						Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

(32)A						Certification of the Chief Executive Officer As Adopted Pursuant to 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(32)B						Certification of the Chief Financial Officer As Adopted Pursuant to 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS						XBRL Instance Document

101.SCH						Inline XBRL Taxonomy Extension Schema Document

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

⁽¹⁾ Incorporated by reference to Exhibit (3)A to the Registrant’s Form 8-K Report filed June 10, 2010.

⁽²⁾ Incorporated by reference to Exhibit (3)B to the Registrant’s Form 8-K Report filed April 2, ~~2020.~~

⁽³⁾~~Incorporated by reference to Exhibit (10)D to the Registrant’s Form 8-K Report filed June 11,~~ 2020.


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			2625


			SUPPLEMENTAL INFORMATION			Table of Contents
						Index to Notes

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 thereunto duly authorized.

TARGET CORPORATION

Dated: ~~August~~May 28, ~~2020~~2021

By:

/s/ Michael J. Fiddelke

Michael J. Fiddelke

Executive Vice President and

Chief Financial Officer

(Duly Authorized Officer and

Principal Financial Officer)

/s/ Robert M. Harrison

Robert M. Harrison

Senior Vice President, Chief Accounting Officer

and Controller


TARGET CORPORATION						~~Q2 2020~~Q1 2021 Form 10-Q			2726


Revenues	Three Months Ended						Six Months Ended
(millions)	August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019
Apparel and accessories ^(a)	$	4,084	$	3,656	$	6,703	$	6,946
Beauty and household essentials ^(b)	6,158		5,076		12,069		10,047
Food and beverage ^(c)	4,186		3,460		8,761		7,182
Hardlines ^(d)	3,608		2,503		6,582		4,889
Home furnishings and décor ^(e)	4,625		3,457		7,889		6,458
Other	35		31		63		62
Sales	22,696		18,183		42,067		35,584
Credit card profit sharing	158		168		324		328
Other	121		71		199		137
Other revenue	279		239		523		465
Total revenue	$	22,975	$	18,422	$	42,590	$	36,049


Fair Value Measurements - Recurring Basis					Fair Value at
(millions)	Classification	Pricing Category	August 1, 2020			February 1, 2020		August 3, 2019
Assets
Short-term investments	Cash and Cash Equivalents	Level 1	$	6,370		$	1,810	$	796
Prepaid forward contracts	Other Current Assets	Level 1	26			23		20
Equity securities ^(a)	Other Current Assets	Level 1	27			39		80
Interest rate swaps	Other Noncurrent Assets	Level 2	239			137		108
Liabilities


Interest rate swaps	Other Noncurrent Liabilities	Level 2	12			—		—


Contribution to Comparable Sales Change	Three Months Ended						Six Months Ended
	August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019
Stores originated channel comparable sales change	10.9	%	1.5	%	6.0	%	2.1	%
Contribution from digitally originated sales	13.4		1.8		11.7		1.9
Total comparable sales change	24.3	%	3.4	%	17.7	%	4.1	%