

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 ~~October~~July 31, ~~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 ~~November~~August 20, ~~2020~~2021, were ~~500,773,141.~~

488,039,053.


						Table of Contents
						Index to Notes

TARGET CORPORATION

TABLE OF CONTENTS


			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				Nine Months Ended					Three Months Ended				Six Months Ended
(millions, except per share data) (unaudited)	(millions, except per share data) (unaudited)	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019		(millions, except per share data) (unaudited)	July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020
Sales	Sales	$	22,336	$	18,414	$	64,403	$	53,997	Sales	$	24,826	$	22,696	$	48,705	$	42,067
Other revenue	Other revenue	296		251		819		716		Other revenue	334		279		652		523
Total revenue	Total revenue	22,632		18,665		65,222		54,713		Total revenue	25,160		22,975		49,357		42,590
Cost of sales	Cost of sales	15,509		12,935		45,692		37,808		Cost of sales	17,280		15,673		33,996		30,183
Selling, general and administrative expenses	Selling, general and administrative expenses	4,647		4,153		13,167		11,728		Selling, general and administrative expenses	4,849		4,460		9,358		8,520
Depreciation and amortization (exclusive of depreciation included in cost of sales)	Depreciation and amortization (exclusive of depreciation included in cost of sales)	541		575		1,660		1,717		Depreciation and amortization (exclusive of depreciation included in cost of sales)	564		542		1,162		1,119
Operating income	Operating income	1,935		1,002		4,703		3,460		Operating income	2,467		2,300		4,841		2,768
Net interest expense	Net interest expense	632		113		871		359		Net interest expense	104		122		212		239
Net other (income) / expense	Net other (income) / expense	5		(12)		16		(38)		Net other (income) / expense	(7)		(11)		(350)		11
Earnings from continuing operations before income taxes		1,298		901		3,816		3,139
Earnings before income taxes										Earnings before income taxes	2,370		2,189		4,979		2,518
Provision for income taxes	Provision for income taxes	284		195		828		703		Provision for income taxes	553		499		1,065		544
Net earnings from continuing operations		1,014		706		2,988		2,436
Discontinued operations, net of tax		0		8		0		11

Net earnings	Net earnings	$	1,014	$	714	$	2,988	$	2,447	Net earnings	$	1,817	$	1,690	$	3,914	$	1,974

Basic earnings per share	Basic earnings per share									Basic earnings per share	$	3.68	$	3.38	$	7.89	$	3.94
Continuing operations		$	2.02	$	1.38	$	5.97	$	4.75
Discontinued operations		0		0.02		0		0.02
Net earnings per share		$	2.02	$	1.40	$	5.97	$	4.77

Diluted earnings per share	Diluted earnings per share									Diluted earnings per share	$	3.65	$	3.35	$	7.82	$	3.91
Continuing operations		$	2.01	$	1.37	$	5.91	$	4.71
Discontinued operations		0		0.02		0		0.02
Net earnings per share		$	2.01	$	1.39	$	5.91	$	4.74
Weighted average common shares outstanding	Weighted average common shares outstanding									Weighted average common shares outstanding
Basic	Basic	500.6		509.7		500.6		512.5		Basic	493.1		500.1		495.8		500.6
Diluted	Diluted	505.4		514.8		505.2		516.8		Diluted	497.5		504.4		500.4		505.1
Antidilutive shares	Antidilutive shares	0		0		0		0		Antidilutive shares	—		—		—		—

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

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						~~Q3 2020~~Q2 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				Nine Months Ended					Three Months Ended				Six Months Ended
(millions) (unaudited)	(millions) (unaudited)	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019		(millions) (unaudited)	July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020
Net earnings	Net earnings	$	1,014	$	714	$	2,988	$	2,447	Net earnings	$	1,817	$	1,690	$	3,914	$	1,974
Other comprehensive income
Pension, net of tax		22		10		66		30
Currency translation adjustment and cash flow hedges, net of tax		14		(1)		5		2
Other comprehensive income / (loss), net of tax										Other comprehensive income / (loss), net of tax
Pension benefit liabilities										Pension benefit liabilities	20		22		42		44
Currency translation adjustment and cash flow hedges										Currency translation adjustment and cash flow hedges	(8)		(1)		1		(9)
Other comprehensive income	Other comprehensive income	36		9		71		32		Other comprehensive income	12		21		43		35
Comprehensive income	Comprehensive income	$	1,050	$	723	$	3,059	$	2,479	Comprehensive income	$	1,829	$	1,711	$	3,957	$	2,009

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						~~Q3 2020~~Q2 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)	October 31, 2020		February 1, 2020		November 2, 2019		(millions, except footnotes) (unaudited)	July 31, 2021		January 30, 2021		August 1, 2020
Assets	Assets							Assets
Cash and cash equivalents	Cash and cash equivalents	$	5,996	$	2,577	$	969	Cash and cash equivalents	$	7,368	$	8,511	$	7,284
Inventory	Inventory	12,712		8,992		11,396		Inventory	11,259		10,653		8,876
Other current assets	Other current assets	1,601		1,333		1,440		Other current assets	1,604		1,592		1,463
Total current assets	Total current assets	20,309		12,902		13,805		Total current assets	20,231		20,756		17,623
Property and equipment	Property and equipment							Property and equipment
Land	Land	6,063		6,036		6,040		Land	6,148		6,141		6,027
Buildings and improvements	Buildings and improvements	31,398		30,603		30,467		Buildings and improvements	32,133		31,557		30,946
Fixtures and equipment	Fixtures and equipment	5,843		6,083		6,032		Fixtures and equipment	5,892		5,914		5,665
Computer hardware and software	Computer hardware and software	2,706		2,692		2,636		Computer hardware and software	2,260		2,765		2,631
Construction-in-progress	Construction-in-progress	518		533		298		Construction-in-progress	944		780		811
Accumulated depreciation	Accumulated depreciation	(19,755)		(19,664)		(19,089)		Accumulated depreciation	(20,133)		(20,278)		(19,341)
Property and equipment, net	Property and equipment, net	26,773		26,283		26,384		Property and equipment, net	27,244		26,879		26,739
Operating lease assets	Operating lease assets	2,208		2,236		2,151		Operating lease assets	2,503		2,227		2,233
Other noncurrent assets	Other noncurrent assets	1,371		1,358		1,401		Other noncurrent assets	1,407		1,386		1,405
Total assets	Total assets	$	50,661	$	42,779	$	43,741	Total assets	$	51,385	$	51,248	$	48,000
Liabilities and shareholders’ investment	Liabilities and shareholders’ investment							Liabilities and shareholders’ investment
Accounts payable	Accounts payable	$	14,203	$	9,920	$	11,258	Accounts payable	$	12,632	$	12,859	$	10,726
Accrued and other current liabilities	Accrued and other current liabilities	5,023		4,406		4,191		Accrued and other current liabilities	5,600		6,122		5,057
Current portion of long-term debt and other borrowings	Current portion of long-term debt and other borrowings	131		161		1,159		Current portion of long-term debt and other borrowings	1,190		1,144		109
Total current liabilities	Total current liabilities	19,357		14,487		16,608		Total current liabilities	19,422		20,125		15,892
Long-term debt and other borrowings	Long-term debt and other borrowings	12,490		11,338		10,513		Long-term debt and other borrowings	11,589		11,536		14,188
Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	2,196		2,275		2,208		Noncurrent operating lease liabilities	2,462		2,218		2,241
Deferred income taxes	Deferred income taxes	1,171		1,122		1,215		Deferred income taxes	1,146		990		1,121
Other noncurrent liabilities	Other noncurrent liabilities	2,128		1,724		1,652		Other noncurrent liabilities	1,906		1,939		1,980
Total noncurrent liabilities	Total noncurrent liabilities	17,985		16,459		15,588		Total noncurrent liabilities	17,103		16,683		19,530
Shareholders’ investment	Shareholders’ investment							Shareholders’ investment
Common stock	Common stock	42		42		42		Common stock	41		42		42
Additional paid-in capital	Additional paid-in capital	6,285		6,226		6,006		Additional paid-in capital	6,332		6,329		6,248
Retained earnings	Retained earnings	7,789		6,433		6,270		Retained earnings	9,200		8,825		7,121
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(797)		(868)		(773)		Accumulated other comprehensive loss	(713)		(756)		(833)
Total shareholders’ investment	Total shareholders’ investment	13,319		11,833		11,545		Total shareholders’ investment	14,860		14,440		12,578
Total liabilities and shareholders’ investment	Total liabilities and shareholders’ investment	$	50,661	$	42,779	$	43,741	Total liabilities and shareholders’ investment	$	51,385	$	51,248	$	48,000

Common Stock Authorized 6,000,000,000 shares, $0.0833 par value; ~~500,754,729, 504,198,962~~489,651,196, 500,877,129 and ~~506,677,740~~500,252,831 shares issued and outstanding as of ~~October~~July 31, ~~2020, February~~2021, January 30, 2021, and August 1, 2020, ~~and November 2, 2019,~~ respectively.

Preferred Stock Authorized 5,000,000 shares, $0.01 par value; 0no shares were issued or outstanding during any period presented.

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						~~Q3 2020~~Q2 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
		Nine Months Ended					Six Months Ended
(millions) (unaudited)	(millions) (unaudited)	October 31, 2020		November 2, 2019		(millions) (unaudited)	July 31, 2021		August 1, 2020
Operating activities	Operating activities					Operating activities
Net earnings	Net earnings	$	2,988	$	2,447	Net earnings	$	3,914	$	1,974
Earnings from discontinued operations, net of tax		0		11
Net earnings from continuing operations		2,988		2,436
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	1,848		1,905		Depreciation and amortization	1,300		1,245
Share-based compensation expense	Share-based compensation expense	161		116		Share-based compensation expense	138		104
Deferred income taxes	Deferred income taxes	26		235		Deferred income taxes	143		(12)
Loss on debt extinguishment		512		0
Gain on Dermstore sale						Gain on Dermstore sale	(335)		—

Noncash losses / (gains) and other, net	Noncash losses / (gains) and other, net	124		6		Noncash losses / (gains) and other, net	7		86
Changes in operating accounts
Changes in operating accounts:						Changes in operating accounts:
Inventory	Inventory	(3,720)		(1,899)		Inventory	(606)		116
Other assets	Other assets	(174)		(10)		Other assets	3		(14)
Accounts payable	Accounts payable	4,287		1,473		Accounts payable	(311)		795
Accrued and other liabilities	Accrued and other liabilities	992		(121)		Accrued and other liabilities	(831)		822
Cash provided by operating activities—continuing operations		7,044		4,141
Cash provided by operating activities—discontinued operations		0		18
Cash provided by operations		7,044		4,159

Cash provided by operating activities						Cash provided by operating activities	3,422		5,116
Investing activities	Investing activities					Investing activities
Expenditures for property and equipment	Expenditures for property and equipment	(2,009)		(2,403)		Expenditures for property and equipment	(1,338)		(1,414)
Proceeds from disposal of property and equipment	Proceeds from disposal of property and equipment	27		29		Proceeds from disposal of property and equipment	15		10
Proceeds from Dermstore sale						Proceeds from Dermstore sale	356		—
Other investments	Other investments	(3)		14		Other investments	(5)		2
Cash required for investing activities	Cash required for investing activities	(1,985)		(2,360)		Cash required for investing activities	(972)		(1,402)
Financing activities	Financing activities					Financing activities
Additions to long-term debt	Additions to long-term debt	2,480		994		Additions to long-term debt	—		2,480
Reductions of long-term debt	Reductions of long-term debt	(2,395)		(1,041)		Reductions of long-term debt	(72)		(126)
Dividends paid	Dividends paid	(1,002)		(995)		Dividends paid	(676)		(662)
Repurchase of stock	Repurchase of stock	(741)		(959)		Repurchase of stock	(2,850)		(706)
Accelerated share repurchase pending final settlement		0		(450)

Stock option exercises	Stock option exercises	18		65		Stock option exercises	5		7
Cash required for financing activities		(1,640)		(2,386)
Net increase in cash and cash equivalents		3,419		(587)
Cash (required for) / provided by financing activities						Cash (required for) / provided by financing activities	(3,593)		993
Net (decrease) / increase in cash and cash equivalents						Net (decrease) / increase in cash and cash equivalents	(1,143)		4,707
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	$	5,996	$	969	Cash and cash equivalents at end of period	$	7,368	$	7,284
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	$	344	$	301	Leased assets obtained in exchange for new finance lease liabilities	$	182	$	246
Leased assets obtained in exchange for new operating lease liabilities	Leased assets obtained in exchange for new operating lease liabilities	186		334		Leased assets obtained in exchange for new operating lease liabilities	386		142

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						~~Q3 2020~~Q2 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						~~Q3 2020~~Q2 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
May 1, 2021													May 1, 2021	496.1	$	41	$	6,271	$	9,372	$	(725)	$	14,959
Net earnings	Net earnings	—	—		—		1,690		—		1,690		Net earnings	—	—		—		1,817		—		1,817
Other comprehensive income	Other comprehensive income	—	—		—		—		21		21		Other comprehensive income	—	—		—		—		12		12
Dividends declared	Dividends declared	—	—		—		(344)		—		(344)		Dividends declared	—	—		—		(445)		—		(445)
Repurchase of stock													Repurchase of stock	(6.6)	—		—		(1,544)		—		(1,544)
Stock options and awards	Stock options and awards	0.4	—		42		—		—		42		Stock options and awards	0.2	—		61		—		—		61
August 1, 2020		500.3	$	42	$	6,248	$	7,121	$	(833)	$	12,578
Net earnings		—	—		—		1,014		—		1,014
Other comprehensive income		—	—		—		—		36		36
Dividends declared		—	—		—		(346)		—		(346)
Stock options and awards		0.5	—		37		—		—		37
October 31, 2020		500.8	$	42	$	6,285	$	7,789	$	(797)	$	13,319
July 31, 2021													July 31, 2021	489.7	$	41	$	6,332	$	9,200	$	(713)	$	14,860

We declared ~~$0.68~~$0.90 and ~~$0.66~~$0.68 dividends per share for the three months ended ~~October~~July 31, ~~2020,~~2021, and ~~November 2, 2019,~~August 1, 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						~~Q3 2020~~Q2 2021 Form 10-Q			6


			FINANCIAL STATEMENTS			Table of Contents
			INDEX			Index to Notes


TARGET CORPORATION						~~Q3 2020~~Q2 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. 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 have remained open.

~~Throughout~~Since the ~~nine months ended October 31, 2020, guest shopping patterns changed significantly and unpredictably in reaction to~~onset of the COVID-19 ~~pandemic.~~ ~~NaN of our 5 core merchandise categories~~pandemic, we have experienced ~~significant~~strong comparable sales growth ~~throughout the year; however,~~and significant volatility in our sales ~~of Apparel~~category and ~~Accessories declined significantly in the first quarter before rebounding in the second and third quarters.~~channel mix, including same-day fulfillment options. Note 34 pr~~ovides~~presents sales by category. ~~In response to these changes, we~~We have taken ~~many~~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						~~Q3 2020~~Q2 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	Revenues	Three Months Ended				Nine Months Ended				Revenues	Three Months Ended				Six Months Ended
(millions)	(millions)	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019		(millions)	July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020
Apparel and accessories (a)	Apparel and accessories (a)	$	3,927	$	3,564	$	10,630	$	10,510	Apparel and accessories (a)	$	4,751	$	4,084	$	9,020	$	6,703
Beauty and household essentials (b)	Beauty and household essentials (b)	6,103		5,125		18,172		15,172		Beauty and household essentials (b)	6,726		6,158		13,090		12,069
Food and beverage (c)	Food and beverage (c)	4,397		3,717		13,158		10,899		Food and beverage (c)	4,687		4,186		9,543		8,761
Hardlines (d)	Hardlines (d)	3,377		2,460		9,959		7,348		Hardlines (d)	3,867		3,608		7,813		6,582
Home furnishings and décor (e)	Home furnishings and décor (e)	4,506		3,527		12,395		9,985		Home furnishings and décor (e)	4,748		4,625		9,158		7,889
Other	Other	26		21		89		83		Other	47		35		81		63
Sales	Sales	22,336		18,414		64,403		53,997		Sales	24,826		22,696		48,705		42,067

Credit card profit sharing	Credit card profit sharing	164		177		488		505		Credit card profit sharing	172		158		343		324
Other	Other	132		74		331		211		Other	162		121		309		199
Other revenue	Other revenue	296		251		819		716		Other revenue	334		279		652		523

Total revenue	Total revenue	$	22,632	$	18,665	$	65,222	$	54,713	Total revenue	$	25,160	$	22,975	$	49,357	$	42,590

(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 ~~October~~July 31, ~~2020, February~~2021, January 30, 2021, and August 1, 2020, ~~and November 2, 2019,~~ the accrual for estimated returns was ~~$182~~$176 million, ~~$117~~$139 million, and ~~$137~~$201 million, respectively.

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


Gift Card Liability Activity	Gift Card Liability Activity	February 1, 2020		Gift Cards Issued During Current Period But Not Redeemed (b)			Revenue Recognized From Beginning Liability			October 31, 2020	Gift Card Liability Activity	January 30, 2021			Gift Cards Issued During Current Period But Not Redeemed (b)			Revenue Recognized From Beginning Liability			July 31, 2021
(millions)	(millions)							(millions)
Gift card liability (a)	Gift card liability (a)	$	935		$	372		$	(549)				$	758	Gift card liability (a)	$	1,035		$	378		$	(533)	$	880

(a)Included in Accrued and Other Current Liabilities.

(b)Net of estimated breakage.

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						~~Q3 2020~~Q2 2021 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 October 31, 2020 February 1, 2020 November 2, 2019
Assets
Short-term investments Cash and Cash Equivalents Level 1 $ 5,089 $ 1,810 $ 163
Prepaid forward contracts Other Current Assets Level 1 32 23 24
Equity securities (a)
Other Current Assets Level 1 19 39 80
Interest rate swaps Other Noncurrent Assets Level 2 205 137 122
Liabilities
Interest rate swaps Other Noncurrent Liabilities Level 2 3 0 0

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


Financial Instruments Measured On a Recurring Basis			Fair Value
(millions)	Classification	Pricing Category	July 31, 2021		January 30, 2021		August 1, 2020
Assets
Short-term investments	Cash and Cash Equivalents	Level 1	$	6,439	$	7,644	$	6,370
Prepaid forward contracts	Other Current Assets	Level 1	44		38		26
Equity securities	Other Current Assets	Level 1	—		—		27
Interest rate swaps	Other Noncurrent Assets	Level 2	160		188		239
Liabilities

Interest rate swaps	Other Noncurrent Liabilities	Level 2	—		—		12


Significant Financial Instruments Not Measured at Fair Value (a) (millions)	Significant Financial Instruments Not Measured at Fair Value (a) (millions)	October 31, 2020				February 1, 2020				November 2, 2019				Significant Financial Instruments Not Measured at Fair Value (a) (millions)	July 31, 2021				January 30, 2021				August 1, 2020
		Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value			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)	$	10,641	$	12,787	$	9,992	$	11,864	$	10,246	$	11,870	Long-term debt, including current portion (b)	$	10,620	$	12,594	$	10,643	$	12,787	$	12,384	$	15,457

(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 $2$39 million and ~~$62~~$81 million during the three and ~~nine~~six months ended ~~October~~July 31, ~~2020,~~2021, respectively. We recognized impairment charges of $7$25 million and ~~$21~~$60 million during the three and ~~nine~~six months ended ~~November 2, 2019,~~August 1, 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. In October 2020, we repurchased $1.77 billion of debt before its maturity at a market value of $2.25 billion. We recognized a loss on early retirement of $512 million, which was recorded in Net Interest Expense.

We obtain short-term financing from time to time under our commercial paper program. NaN balances were outstanding at any time during the nine months ended October 31, 2020. For the nine months ended November 2, 2019, the maximum amount outstanding was $744 million, and the average daily amount outstanding was $55 million at a weighted average annual interest rate of 2.4 percent, with 0 balance outstanding as of November 2, 2019.

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


~~TARGET CORPORATION~~						~~Q3 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 ~~October~~July 31, ~~2020,~~2021, January 30, 2021, and ~~November 2, 2019,~~August 1, 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 ~~nine~~six months ended ~~October~~July 31, ~~2020,~~2021, and ~~November 2, 2019.~~August 1, 2020.

As of ~~October~~July 31, 2021, January 30, 2021, and August 1, 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 ~~October~~July 31, ~~2020, a $1 million loss was recorded in~~2021, Accumulated Other Comprehensive Loss ~~and~~(AOCI) included $6 million that will be reclassified toand reduce Net Interest Expense when the forecasted transaction affects earnings.

Effect of Hedges on Debt
(millions)
October 31, 2020 February 1, 2020 November 2, 2019
Long-term debt and other borrowings
Carrying amount of hedged debt $ 1,696 $ 1,630 $ 1,614
Cumulative hedging adjustments, included in carrying amount 203 137 122
During August 2021, we entered into additional forward-starting interest rate swaps with notional amounts totaling $675 million.


TARGET CORPORATION						Q2 2021 Form 10-Q			10


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

Effect of Hedges on Net Interest Expense Three Months Ended Nine Months Ended
(millions) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
Gain (loss) on fair value hedges recognized in Net Interest Expense
Interest rate swap designated as fair value hedges $ (36) $ 14 $ 66 $ 115
Hedged debt 36 (14) (66) (115)
Total $ 0 $ 0 $ 0 $ 0


Effect of Hedges on Debt (millions)	July 31, 2021		January 30, 2021		August 1, 2020



Long-term debt and other borrowings
Carrying amount of hedged debt	$	1,649	$	1,677	$	1,732
Cumulative hedging adjustments, included in carrying amount	154		183		239


Effect of Hedges on Net Interest Expense	Three Months Ended				Six Months Ended
(millions)	July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020


Gain (loss) on fair value hedges recognized in Net Interest Expense
Interest rate swap designated as fair value hedges	$	22	$	11	$	(29)	$	102
Hedged debt	(22)		(11)		29		(102)
Total	$	—	$	—	$	—	$	—

8. Income Taxes

For the three and six months ended July 31, 2021, our effective tax rate was 23.4 percent and 21.4 percent, respectively, compared with 22.8 percent and 21.6 percent for the three and six months ended August 1, 2020, as higher pretax earnings diluted the tax-rate benefit from fixed and discrete items, such as employee share-based compensation and the Dermstore sale. Additionally, for the six months ended July 31, 2021, 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 Nine Months Ended
(millions, except per share data) October 31, 2020
November 2, 2019 (a)
October 31, 2020
November 2, 2019 (a)
Number of shares purchased 0 3.0 5.7 10.8
Average price paid per share $ 0 $ 99.25 $ 107.58 $ 84.28
Total investment $ 0 $ 294 $ 609 $ 912

~~(a)This table excludes activity related to the ASR arrangement described below because final settlement had not occurred as of November 2, 2019.~~


Share Repurchase Activity	Three Months Ended				Six Months Ended
(millions, except per share data)	July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020
Number of shares purchased	6.6		—		12.7		5.7
Average price paid per share	$	233.81	$	—	$	213.06	$	107.58
Total investment	$	1,535	$	—	$	2,700	$	609

During the third quarter of 2019, we entered into an ASR arrangement to repurchase $300 to $450 million of our common stock. Under the agreement, we paid $450 million and received an initial delivery of 2.5 million shares, which were retired, resulting in a $272 million reduction to Retained Earnings. As of November 2, 2019, $178 million was included as a reduction to Additional Paid-in Capital. Upon final settlement in the fourth quarter of 2019, we received an additional 0.2 million shares, which were retired, and $127 million for the remaining amount not settled in shares. In total, we repurchased 2.7 million shares under the ASR arrangement for a total cash investment of $323 million ($117.64 per share).


TARGET CORPORATION						~~Q3 2020~~Q2 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				Nine Months Ended				Net Pension Benefits Expense		Three Months Ended				Six Months Ended
(millions)	(millions)	Classification	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019		(millions)	Classification	July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020
Service cost benefits earned	Service cost benefits earned	SG&A Expenses	$	25	$	23	$	76	$	69	Service cost benefits earned	SG&A	$	24	$	25	$	48	$	51
Interest cost on projected benefit obligation	Interest cost on projected benefit obligation	Net Other (Income) / Expense	30		37		89		111		Interest cost on projected benefit obligation	Net Other (Income) / Expense	24		29		48		59
Expected return on assets	Expected return on assets	Net Other (Income) / Expense	(61)		(62)		(182)		(186)		Expected return on assets	Net Other (Income) / Expense	(59)		(60)		(118)		(121)
Amortization of losses	Amortization of losses	Net Other (Income) / Expense	32		16		96		47		Amortization of losses	Net Other (Income) / Expense	28		32		57		64
Amortization of prior service cost	Amortization of prior service cost	Net Other (Income) / Expense	(3)		(3)		(9)		(8)		Amortization of prior service cost	Net Other (Income) / Expense	(1)		(3)		(1)		(6)
Settlement charges		Net Other (Income) / Expense	1		0		1		0

Total	Total		$	24	$	11	$	71	$	33	Total		$	16	$	23	$	34	$	47

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

Change in Accumulated Other Comprehensive Loss Cash Flow
Hedges Currency Translation Adjustment Pension Total
(millions)
February 1, 2020 $ (12) $ (19) $ (837) $ (868)
Other comprehensive loss before reclassifications, net of tax (1) 0 0 (1)
Amounts reclassified from AOCI, net of tax 6 0 66 72
October 31, 2020 $ (7) $ (19) $ (771) $ (797)


Change in Accumulated Other Comprehensive Loss	Cash Flow Hedges		Currency Translation Adjustment		Pension		Total
(millions)
January 30, 2021	$	(3)	$	(18)	$	(735)	$	(756)
Other comprehensive income before reclassifications, net of tax	1		—		—		1
Amounts reclassified from AOCI, net of tax	—		—		42		42
July 31, 2021	$	(2)	$	(18)	$	(693)	$	(713)


TARGET CORPORATION						~~Q3 2020~~Q2 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

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

•GAAP diluted earnings per share ~~were $2.01.~~was $3.65.

•Adjusted diluted earnings per share ~~were $2.79.~~was $3.64.

•Total revenue increased ~~21.3~~9.5 percent, driven by an increase in comparable sales.

•Comparable sales increased ~~20.7~~8.9 percent, driven by a ~~15.6~~12.7 percent increase in ~~average transaction amount.~~traffic.

◦Comparable ~~store~~stores originated sales grew ~~9.9~~8.7 percent.

◦~~Digital channel~~Comparable digitally originated sales increased ~~155 percent, contributing 10.9 percentage points to comparable sales growth.~~ 9.9 percent.

•Operating income of ~~$1.9~~$2.5 billion was ~~93.1~~7.2 percent higher than the comparable prior-year period.

•~~We repurchased $1.77 billion of debt before its maturity at a market value of $2.25 billion, resulting in a loss of $512 million.~~

Sales were ~~$22.3~~$24.8 billion for the three months ended ~~October~~July 31, ~~2020,~~2021, an increase of ~~$3.9~~$2.1 billion, or ~~21.3~~9.4 percent, from the ~~same period in the prior year. Operating cash~~comparable prior-year period. Cash flow provided by ~~continuing operations~~operating activities was ~~$7.0~~$3.4 billion for the ~~nine~~six months ended ~~October~~July 31, ~~2020, an~~2021, a ~~increase~~decrease of ~~$2.9~~$1.7 billion, or ~~70.1~~(33.1) percent, from ~~$4.1~~$5.1 billion for the ~~nine~~six months ended ~~November 2, 2019.~~August 1, 2020. The drivers of the operating cash flow decrease are described on page 22.

Earnings Per Share from Continuing Operations Three Months Ended Nine Months Ended
October 31, 2020 November 2, 2019 Change October 31, 2020 November 2, 2019 Change
GAAP diluted earnings per share $ 2.01 $ 1.37 46.3 % $ 5.91 $ 4.71 25.5 %
Adjustments 0.78 (0.01) 0.83 (0.01)
Adjusted diluted earnings per share $ 2.79 $ 1.36 105.1 % $ 6.75 $ 4.70 43.5 %


Earnings Per Share	Three Months Ended						Six Months Ended
	July 31, 2021		August 1, 2020		Change		July 31, 2021		August 1, 2020		Change
GAAP diluted earnings per share	$	3.65	$	3.35	8.9	%	$	7.82	$	3.91	100.1	%
Adjustments	(0.01)		0.03				(0.48)		0.06
Adjusted diluted earnings per share	$	3.64	$	3.38	7.9	%	$	7.34	$	3.96	85.1	%

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.~~19.

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 ~~October~~July 31, ~~2020,~~2021, after-tax ROIC was ~~19.9~~31.7 percent, compared with ~~15.0~~17.2 percent for the trailing twelve months ended ~~November 2, 2019.~~August 1, 2020. The calculation of ROIC is provided oon n page ~~21.~~21.

COVID-19

~~On March 11, 2020,~~Since the ~~World Health Organization declared~~onset of the ~~novel coronavirus disease (COVID-19) a~~COVID-19 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. To date, virtually all of our stores, digital channels, and distribution centers have remained open.

~~As the pandemic has evolved,~~ we have experienced ~~unusually~~ strong comparable sales ~~as guests rely on Target for essential items like food, medicine, cleaning products,~~growth and ~~household stock-up items, as well as merchandise associated with guests spending more time at home. Underlying this trend, we saw~~ 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.


~~TARGET CORPORATION~~						~~Q3 2020 Form 10-Q~~			13


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

•During the first quarter, comparable sales increased 10.8 percent, reflecting a 0.9 percent increase 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.

•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 strong across our multi-category portfolio, with slightly higher growth in lower-margin categories.

•During the third quarter, comparable sales increased 20.7 percent, reflecting a 9.9 percent increase in store originated comparable sales and a 155 percent increase in digitally originated comparable sales. Comparable sales growth strength continued across our multi-category portfolio, with slightly higher growth in lower-margin categories.

~~For the nine months ended October 31, 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 the portion of investments in pay and benefits classified within Cost of Sales. Exceptionally low clearance and promotional markdown rates partially offset these pressures.

Our SG&A expenses include significant 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. From an SG&A expense rate perspective, these incremental costs were more than offset by cost leverage resulting from exceptionally strong sales growth.

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 opened 29 new small format stores in 2020, rather than the 36 previously announced.

During the first quarter 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 operating performance during the second and third quarters of 2020 and current financial position allowed us to repurchase~~ ~~$1.77 billion~~ ~~of debt before its maturity at a market value of~~ ~~$2.25 billion~~ ~~in October 2020 and terminate the 364-day credit facility in November 2020.~~ ~~Note~~ 6 ~~to the Consolidated Financial Statements and t~~he ~~Liquidity and Capital Resources~~ ~~section provide additional information.~~


TARGET CORPORATION						~~Q3 2020~~Q2 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	Summary of Operating Income	Three Months Ended						Nine Months Ended						Summary of Operating Income	Three Months Ended						Six Months Ended
(dollars in millions)	(dollars in millions)	October 31, 2020		November 2, 2019		Change		October 31, 2020		November 2, 2019		Change		(dollars in millions)	July 31, 2021		August 1, 2020		Change		July 31, 2021		August 1, 2020		Change
Sales	Sales	$	22,336	$	18,414	21.3	%	$	64,403	$	53,997	19.3	%	Sales	$	24,826	$	22,696	9.4	%	$	48,705	$	42,067	15.8	%
Other revenue	Other revenue	296		251		18.1		819		716		14.3		Other revenue	334		279		20.0		652		523		24.8
Total revenue	Total revenue	22,632		18,665		21.3		65,222		54,713		19.2		Total revenue	25,160		22,975		9.5		49,357		42,590		15.9
Cost of sales	Cost of sales	15,509		12,935		19.9		45,692		37,808		20.9		Cost of sales	17,280		15,673		10.3		33,996		30,183		12.6
Selling, general and administrative expenses	Selling, general and administrative expenses	4,647		4,153		11.9		13,167		11,728		12.3		Selling, general and administrative expenses	4,849		4,460		8.8		9,358		8,520		9.8
Depreciation and amortization (exclusive of depreciation included in cost of sales)	Depreciation and amortization (exclusive of depreciation included in cost of sales)	541		575		(5.8)		1,660		1,717		(3.3)		Depreciation and amortization (exclusive of depreciation included in cost of sales)	564		542		4.0		1,162		1,119		3.9
Operating income	Operating income	$	1,935	$	1,002	93.1	%	$	4,703	$	3,460	35.9	%	Operating income	$	2,467	$	2,300	7.2	%	$	4,841	$	2,768	74.9	%


Rate Analysis	Rate Analysis	Three Months Ended				Nine Months Ended				Rate Analysis	Three Months Ended				Six Months Ended
		October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019			July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020
Gross margin rate	Gross margin rate	30.6	%	29.8	%	29.1	%	30.0	%	Gross margin rate	30.4	%	30.9	%	30.2	%	28.3	%
SG&A expense rate	SG&A expense rate	20.5		22.3		20.2		21.4		SG&A expense rate	19.3		19.4		19.0		20.0
Depreciation and amortization (exclusive of depreciation included in cost of sales) expense rate		2.4		3.1		2.5		3.1
Depreciation and amortization expense rate (exclusive of depreciation included in cost of sales)										Depreciation and amortization expense rate (exclusive of depreciation included in cost of sales)	2.2		2.4		2.4		2.6
Operating income margin rate	Operating income margin rate	8.5		5.4		7.2		6.3		Operating income margin rate	9.8		10.0		9.8		6.5

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,~~ sales—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 –~~ growth—from both comparable sales and new ~~stores –~~ 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						Q2 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 ~~nine~~six months ended ~~October~~July 31, ~~2020,~~2021, is due to a comparable sales increase of ~~20.7~~8.9 percent and ~~18.7~~15.3 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				Nine Months Ended				Comparable Sales	Three Months Ended				Six Months Ended
		October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019			July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020
Comparable sales change	Comparable sales change	20.7	%	4.5	%	18.7	%	4.2	%	Comparable sales change	8.9	%	24.3	%	15.3	%	17.7	%
Drivers of change in comparable sales	Drivers of change in comparable sales									Drivers of change in comparable sales
Number of transactions	Number of transactions	4.5		3.1		2.6		3.3		Number of transactions	12.7		4.6		14.8		1.6
Average transaction amount	Average transaction amount	15.6		1.4		15.7		0.9		Average transaction amount	(3.4)		18.8		0.5		15.8


Comparable Sales by Channel	Three Months Ended				Six Months Ended
	July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020
Stores originated comparable sales change	8.7	%	10.9	%	13.0	%	6.0	%
Digitally originated comparable sales change	9.9		195.4		27.3		168.9


Sales by Channel	Three Months Ended				Six Months Ended
	July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020
Stores originated	83.0	%	82.8	%	82.3	%	83.7	%
Digitally originated	17.0		17.2		17.7		16.3
Total	100	%	100	%	100	%	100	%


Sales by Fulfillment Channel	Three Months Ended				Six Months Ended
	July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020
Stores	96.6	%	96.0	%	96.4	%	96.3	%
Other	3.4		4.0		3.6		3.7
Total	100	%	100	%	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				Six Months Ended
	July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020
Apparel and accessories	19	%	18	%	18	%	16	%
Beauty and household essentials	27		27		27		29
Food and beverage	19		19		20		21
Hardlines	16		16		16		15
Home furnishings and décor	19		20		19		19
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 the transfer of sales to new stores, makes further analysis of sales metrics infeasible.


TARGET CORPORATION						~~Q3 2020~~Q2 2021 Form 10-Q			15


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

Contribution to Comparable Sales Change Three Months Ended Nine Months Ended
October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
Stores originated channel comparable sales change 9.9 % 2.8 % 7.3 % 2.3 %
Contribution from digitally originated sales 10.9 1.7 11.4 1.9
Total comparable sales change 20.7 % 4.5 % 18.7 % 4.2 %

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

Sales by Channel Three Months Ended Nine Months Ended
October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
Stores originated 84.3 % 92.5 % 83.9 % 92.7 %
Digitally originated 15.7 7.5 16.1 7.3
Total 100 % 100 % 100 % 100 %

Sales by Product Category Three Months Ended Nine Months Ended
October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
Apparel and accessories 18 % 20 % 17 % 19 %
Beauty and household essentials 27 28 28 28
Food and beverage 20 20 20 20
Hardlines 15 13 16 14
Home furnishings and décor 20 19 19 19
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 and six months ended July 31, 2021, and August 1, 2020; however, RedCard penetration declined as total Sales increased at a faster pace.


RedCard Penetration	RedCard Penetration	Three Months Ended				Nine Months Ended				RedCard Penetration	Three Months Ended				Six Months Ended
		October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019			July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020
Target Debit Card	Target Debit Card	12.2	%	12.5	%	12.2	%	12.7	%	Target Debit Card	11.6	%	11.8	%	11.9	%	12.2	%
Target Credit Cards	Target Credit Cards	9.3		10.7		9.2		10.6		Target Credit Cards	8.7		8.7		8.6		9.2
Total RedCard Penetration	Total RedCard Penetration	21.5	%	23.1	%	21.4	%	23.3	%	Total RedCard Penetration	20.3	%	20.5	%	20.4	%	21.4	%

Note: Amounts may not foot due to rounding.


TARGET CORPORATION						~~Q3 2020~~Q2 2021 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 ~~October~~July 31, ~~2020,~~2021, our gross margin rate was ~~30.6~~30.4 percent compared with ~~29.8~~30.9 percent in the comparable ~~period last ye~~prior-year pe~~ar.~~riod. This ~~increase~~decrease reflected the net impact of ~~merchandising actions, most notably~~

•pressure from higher merchandise and freight costs, partially offset by the benefit of ~~exceptionally~~ low promotional and clearance ~~and promotional~~ markdown rates. The increase was partially offset by increased digital fulfillment and supply chain costs (stemming from unusually strong growth in digital volume and higher pay and benefit costs classified within Cost of Sales) and the impact of category sales mix, as sales growth was strongest in lower-margin categories.rates;

•the prior-year rate benefit from a second quarter 2020 change in our returns estimate for sales during the temporary returns suspension period;

•favorable category mix, reflecting strength in our higher-margin categories relative to our lower-margin categories; and

•the benefit of a higher percentage of digital sales fulfilled through our lower-cost same-day fulfillment options.

For the ~~nine~~six months ended ~~October~~July 31, ~~2020,~~2021, our gross margin rate was ~~29.1~~30.2 percent compared with ~~30.0~~28.3 percent in the comparable ~~period last year.~~prior-year period. This ~~decrease~~increase reflected ~~increased digital fulfillment~~

•merchandising benefits, including exceptionally low promotional and supply chain costs (stemming from unusually strong growth in digital volume combined with the impact of higher pay and benefit costs classified within Cost of Sales) and the impact of category sales mix, as sales growth was strongest in lower-margin categories. The decrease wasclearance markdown rates, partially offset by ~~the net impact of merchandising actions, most notably~~ higher merchandise and freight costs;

•favorable category mix, reflecting strength in our higher-margin categories relative to our lower-margin categories; and

•the benefit of ~~exceptionally low clearance and promotional markdown rates.~~

~~Selling, General, and Administrative Expense Rate~~

~~For the three and nine months ended October 31, 2020,~~a higher percentage of digital sales fulfilled through our ~~SG&A expense rate was 20.5 percent and 20.2 percent,~~ respectively, compared with 22.3 percent and 21.4 percent, respectively, in the comparable periods last year. Incremental team member pay and benefits and investments to protect the health and safety of guests represented approximately $300 million of the $494 million increase in SG&A expenses for the three months ended October 31, 2020, and approximately $900 million of the $1.4 billion increase for the nine months ended October 31, 2020, compared with the prior year periods. From a rate perspective, these increased costs were more than offset by leverage resulting from strong revenue growth.

lower-cost same-day fulfillment options.


TARGET CORPORATION						~~Q3 2020~~Q2 2021 Form 10-Q			17


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

Selling, General, and Administrative Expense Rate

For the three months ended July 31, 2021, our SG&A expense rate was 19.3 percent compared with 19.4 percent for the three months ended August 1, 2020. For the six months ended July 31, 2021, our SG&A expense rate was 19.0 percent compared with 20.0 percent for the six months ended August 1, 2020. The decreases reflect the continued leverage benefit from strong revenue growth, offset by pressure from increases in some expense categories—such as marketing—from lower-than-normal levels in 2020.

Store Data


Change in Number of Stores	Change in Number of Stores	Three Months Ended		Nine Months Ended		Change in Number of Stores	Three Months Ended		Six Months Ended
		October 31, 2020	November 2, 2019	October 31, 2020	November 2, 2019
Change in Number of Stores						Change in Number of Stores	July 31, 2021	August 1, 2020	July 31, 2021	August 1, 2020
	Beginning store count	1,871	1,853	1,868	1,844		1,909	1,871	1,897	1,868
Opened	Opened	27	9	30	20	Opened	2	—	14	3
Closed	Closed	(1)	—	(1)	(2)	Closed	(2)	—	(2)	—

Ending store count	Ending store count	1,897	1,862	1,897	1,862	Ending store count	1,909	1,871	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)
		October 31, 2020	February 1, 2020	November 2, 2019	October 31, 2020	February 1, 2020	November 2, 2019		July 31, 2021	January 30, 2021	August 1, 2020	July 31, 2021	January 30, 2021	August 1, 2020
170,000 or more sq. ft.	170,000 or more sq. ft.	273	272	272	48,798	48,619	48,619	170,000 or more sq. ft.	273	273	272	48,798	48,798	48,613
50,000 to 169,999 sq. ft.	50,000 to 169,999 sq. ft.	1,509	1,505	1,504	189,508	189,227	189,164	50,000 to 169,999 sq. ft.	1,510	1,509	1,505	189,624	189,508	189,224
49,999 or less sq. ft.	49,999 or less sq. ft.	115	91	86	3,342	2,670	2,475	49,999 or less sq. ft.	126	115	94	3,709	3,342	2,745
Total	Total	1,897	1,868	1,862	241,648	240,516	240,258	Total	1,909	1,897	1,871	242,131	241,648	240,582

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

Other Performance Factors

Net Interest Expense

Net interest expense was ~~$632~~$104 million and ~~$871~~$212 million for the three and ~~nine~~six months ended ~~October~~July 31, ~~2020,~~ 2021, respectively, ~~and $113~~compared with $122 million and ~~$359~~$239 million, respectively, in the comparable prior-year period. The decrease in net interest expense was primarily due to lower average debt balances for the three and six months ended July 31, 2021, compared with the prior-year periods.

Net Other (Income) / Expense

Net Other (Income) / Expense was $(7) million and $(350) million for the three and ~~nine~~six months ended ~~November 2, 2019, respectively. Net interest expense~~July 31, 2021, respectively, compared with $(11) million and $11 million, respectively, in the comparable prior-year periods. The increase for the ~~three and nine~~six months ended ~~October~~July 31, ~~2020, increased primarily~~2021, was due to ~~a loss~~the $335 million gain on ~~early retirement~~the February 2021 sale of ~~debt of $512 million.~~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 ~~nine~~six months ended ~~October~~July 31, ~~2020,~~2021, was ~~21.9~~23.4 percent and ~~21.7~~21.4 percent, respectively, compared ~~with 21.7~~with 22.8 percent and ~~22.4~~21.6 percent, respectively, ~~for~~in the comparable prior-year periods, ~~last year.~~reflecting significantly higher earnings during the current-year periods which diluted the tax rate impact of fixed deductions and discrete items. The effective tax rate impact of higher earnings for the ~~nine~~six months ended ~~October~~July 31, ~~2020, reflects a larger rate benefit from discrete items, primarily related to share-based payments, compared with~~2021, was offset by the ~~prior year.~~resolution of certain income tax matters during the first quarter.


TARGET CORPORATION						~~Q3 2020~~Q2 2021 Form 10-Q			18


			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	Reconciliation of Non-GAAP Adjusted EPS	Three Months Ended												Reconciliation of Non-GAAP Adjusted EPS	Three Months Ended
		October 31, 2020						November 2, 2019							July 31, 2021						August 1, 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						$	2.01					$	1.37
GAAP diluted earnings per share														GAAP diluted earnings per share					$	3.65					$	3.35
Adjustments	Adjustments													Adjustments
Loss on debt extinguishment		$	512	$	379	$	0.75	$	—	$	—	$	—
Loss on investment (a)		8		9		0.02		—		—		—

Gain on investment (a)														Gain on investment (a)	$	—	$	—	$	—	$	(9)	$	(6)	$	(0.01)

Other (b)	Other (b)	8		6		0.01		(9)		(6)		(0.01)		Other (b)	(5)		(4)		(0.01)		25		18		0.04
Adjusted diluted earnings per share from continuing operations						$	2.79					$	1.36
Adjusted diluted earnings per share														Adjusted diluted earnings per share					$	3.64					$	3.38


Reconciliation of Non-GAAP Adjusted EPS	Reconciliation of Non-GAAP Adjusted EPS	Nine Months Ended												Reconciliation of Non-GAAP Adjusted EPS	Six Months Ended
		October 31, 2020						November 2, 2019							July 31, 2021						August 1, 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						$	5.91					$	4.71
GAAP diluted earnings per share														GAAP diluted earnings per share					$	7.82					$	3.91
Adjustments	Adjustments													Adjustments
Loss on debt extinguishment		$	512	$	379	$	0.75	$	—	$	—	$	—

Gain on Dermstore sale														Gain on Dermstore sale	$	(335)	$	(269)	$	(0.54)	$	—	$	—	$	—
Loss on investment (a)	Loss on investment (a)	19		18		0.03		—		—		—		Loss on investment (a)	—		—		—		12		9		0.02

Other (b)	Other (b)	33		24		0.05		(9)		(6)		(0.01)		Other (b)	36		27		0.05		25		18		0.04
Adjusted diluted earnings per share from continuing operations						$	6.75					$	4.70
Adjusted diluted earnings per share														Adjusted diluted earnings per share					$	7.34					$	3.96

Note: Amounts may not foot due to rounding.

(a)~~Includes an unrealized~~Represented a (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)~~For 2020, includes store damage~~Includes civil unrest-related losses, net of associated insurance recoveries, and ~~inventory losses related to civil unrest.~~ ~~For 2019, represents an insurance recovery related to the 2013 data breach.~~

headquarters office space impairments, none of which were individually significant.


TARGET CORPORATION						~~Q3 2020~~Q2 2021 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						Nine Months Ended						EBIT and EBITDA	Three Months Ended						Six Months Ended
(dollars in millions) (unaudited)		October 31, 2020		November 2, 2019		Change		October 31, 2020		November 2, 2019		Change
Net earnings from continuing operations		$	1,014	$	706	43.6	%	$	2,988	$	2,436	22.6	%
(dollars in millions)														(dollars in millions)	July 31, 2021		August 1, 2020		Change		July 31, 2021		August 1, 2020		Change
Net earnings														Net earnings	$	1,817	$	1,690	7.4	%	$	3,914	$	1,974	98.2	%
+ Provision for income taxes	+ Provision for income taxes	284		195		45.7		828		703		17.8		+ Provision for income taxes	553		499		11.3		1,065		544		95.9
+ Net interest expense	+ Net interest expense	632		113		457.7		871		359		142.6		+ Net interest expense	104		122		(15.5)		212		239		(11.7)
EBIT	EBIT	$	1,930	$	1,014	90.2	%	$	4,687	$	3,498	34.0	%	EBIT	$	2,474	$	2,311	7.1	%	$	5,191	$	2,757	88.2	%
+ Total depreciation and amortization (a)	+ Total depreciation and amortization (a)	603		637		(5.1)		1,848		1,905		(2.9)		+ Total depreciation and amortization (a)	633		604		4.9		1,300		1,245		4.5
EBITDA	EBITDA	$	2,533	$	1,651	53.5	%	$	6,535	$	5,403	21.0	%	EBITDA	$	3,107	$	2,915	6.6	%	$	6,491	$	4,002	62.2	%

(a)Represents total depreciation and amortization, including amounts classified within Depreciation and Amortization and within Cost of Sales.


TARGET CORPORATION						~~Q3 2020~~Q2 2021 Form 10-Q			20


			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	October 31, 2020		November 2, 2019		Numerator	July 31, 2021		August 1, 2020
Operating income	Operating income	$	5,901	$	4,577	Operating income	$	8,611	$	4,968
+ Net other income / (expense)	+ Net other income / (expense)	(46)		45		+ Net other income / (expense)	346		(28)
EBIT	EBIT	5,855		4,622		EBIT	8,957		4,940
+ Operating lease interest (a)	+ Operating lease interest (a)	87		86		+ Operating lease interest (a)	84		87
- Income taxes (b)	- Income taxes (b)	1,277		1,043		- Income taxes (b)	1,918		1,076
Net operating profit after taxes	Net operating profit after taxes	$	4,665	$	3,665	Net operating profit after taxes	$	7,123	$	3,951


Denominator	Denominator	October 31, 2020			November 2, 2019			November 3, 2018		Denominator	July 31, 2021			August 1, 2020			August 3, 2019
Current portion of long-term debt and other borrowings	Current portion of long-term debt and other borrowings	$	131		$	1,159		$	1,535	Current portion of long-term debt and other borrowings	$	1,190		$	109		$	1,153
+ Noncurrent portion of long-term debt	+ Noncurrent portion of long-term debt	12,490			10,513			10,104		+ Noncurrent portion of long-term debt	11,589			14,188			10,365
+ Shareholders' investment	+ Shareholders' investment	13,319			11,545			11,080		+ Shareholders' investment	14,860			12,578			11,836
+ Operating lease liabilities (c)	+ Operating lease liabilities (c)	2,400			2,390			2,208		+ Operating lease liabilities (c)	2,695			2,448			2,285
- Cash and cash equivalents	- Cash and cash equivalents	5,996			969			825		- Cash and cash equivalents	7,368			7,284			1,656
Invested capital	Invested capital	$	22,344		$	24,638		$	24,102	Invested capital	$	22,966		$	22,039		$	23,983
Average invested capital (d)	Average invested capital (d)	$	23,491		$	24,369				Average invested capital (d)	$	22,502		$	23,011

After-tax return on invested capital	After-tax return on invested capital	19.9		%	15.0		%			After-tax return on invested capital	31.7		%	17.2		%

(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 ~~21.5~~21.2 percent and ~~22.1~~21.4 percent for the trailing twelve months ended ~~October~~July 31, ~~2020,~~2021, and ~~November 2, 2019,~~August 1, 2020, respectively. For the trailing twelve months ended ~~October~~July 31, ~~2020,~~2021, and ~~November 2, 2019,~~August 1, 2020, includes tax effect of ~~$1.3~~$1.9 billion and ~~$1.0~~$1.1 billion, respectively, related to EBIT, and ~~$19~~$18 million and $19 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						~~Q3 2020~~Q2 2021 Form 10-Q			21


			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 suspended our share repurchase program in March 2020. In November 2020, we lifted the share repurchase suspension and announced that we expect to resume share repurchases in 2021. We continue to anticipate ample access to commercial paper and long-term financing.

Our cash and cash equivalents balance was ~~$6.0~~$7.4 billion, ~~$2.6~~$8.5 billion, and ~~$1.0~~$7.3 billion as of ~~October~~July 31, ~~2020, February~~2021, January 30, 2021, and August 1, 2020, ~~and November 2, 2019,~~ respectively. Our cash and cash equivalents balance includes short-term investments of ~~$5.1~~$6.4 billion, ~~$1.8~~$7.6 billion, and ~~$163 million~~$6.4 billion as of ~~October~~July 31, ~~2020, February~~2021, January 30, 2021, and August 1, 2020, ~~and November 2, 2019,~~ 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 $7.0~~operating activities were $3.4 billion for the ~~nine~~six months ended ~~October~~July 31, ~~2020,~~2021, compared with ~~$4.1~~$5.1 billion for the ~~nine~~six months ended ~~November 2, 2019.~~ August 1, 2020~~The increase reflects~~. For the six months ended July 31, 2021, operating cash flows reflect stronger operating ~~performance combined with higher payables leverage during the nine months ended October 31, 2020, due to~~results, offset by increased inventory ~~turnover driven by strong sales,~~investment and higher net settlement of accounts payable, compared with the ~~nine~~six months ended ~~November 2, 2019.~~August 1, 2020. Additionally, operating cash flows for ~~the nine months ended October 31, 2020,~~2021 reflect ~~increased payroll-related liabilities, including the deferral of employer social security~~a $1.2 billion increase in income tax payments.

Inventory

Inventory was ~~$12.7~~$11.3 billion as of ~~October~~July 31, ~~2020,~~2021, compared with ~~$9.0~~$10.7 billion and ~~$11.4~~$8.9 billion at ~~February~~January 30, 2021, and August 1, 2020, ~~and November 2, 2019, respectively~~respectively. . The increase over the balance as of August 1, 2020, reflects efforts to align inventory with sales trends. Additionally, the lower inventory balance as of August 1, 2020, reflected the impact of elevated sell-through rates in longer lead-time merchandise categories.

Investing Cash Flows

~~Cash flow required for investing activities~~Investing cash flows included capital ~~expenditures~~investments of ~~$2.0~~$1.3 billion and ~~$2.4~~$1.4 billion for the ~~nine~~six months ended ~~October~~July 31, 2021, and August 1, 2020, ~~and November 2, 2019,~~ respectively. ~~During~~We now expect full-year capital investments of approximately $3.5 billion compared with our previous expectation of $4 billion, reflecting the ~~nine~~re-timing of some projects into next year. For the six months ended ~~October~~July 31, ~~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 $2.5 billion to $3.0 billion~~.Dermstore.

Dividends

We paid dividends totaling ~~$340~~$336 million ($0.68 per share) and ~~$1.0 billion~~$676 million ($~~2.00~~1.36 per share) for the three and ~~nine~~six months ended ~~October~~July 31, ~~2020,~~2021, respectively, and ~~$337~~$330 million ($0.66 per share) and ~~$995~~$662 million ($~~1.94~~1.32 per share) for the three and ~~nine~~six months ended ~~November 2, 2019,~~August 1, 2020, respectively, a per share increase of 3.0 ~~percent and 3.1 percent, respectively.~~percent. We declared dividends totaling ~~$346~~$445 million ($0.90 per share) during the second quarter of 2021 and $344 million ($0.68 per share) during the ~~third~~second quarter of 2020, a per share increase of ~~3.0 percent over the $338 million ($0.66 per share) of declared dividends during the third quarter of 2019.~~32.4 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 $2.7 billion to shareholders through share repurchase during the six months ended July 31, 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						~~Q3 2020~~Q2 2021 Form 10-Q			22


			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 nine months ended October 31, 2020. We did not repurchase any shares during the three months ended October 31, 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 ~~October~~July 31, ~~2020,~~2021, our credit ratings were as follows:


Credit Ratings	Moody’s	Standard and Poor’s	Fitch
Long-term debt	A2	A	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. Fitch raised our long-term debt rating from A- to A during the three months ended July 31, 2021.

We obtain short-term financing from time to time under our commercial paper program. No balances were outstanding at any time during the six months ended July 31, 2021, and August 1, 2020. We have additional liquidity through a committed $2.5 billion revolving credit facility ~~obtained through a group of banks, which~~that expires in October 2023. No balances were outstanding ~~under any 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 ~~October~~July 31, ~~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~~foreseeable future. We continue to anticipate ample access to commercial paper and ~~payments discussed in~~ ~~Note 6~~ to the Consolidated Financial Statements, there were no material changes to our contractual obligations 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						~~Q3 2020~~Q2 2021 Form 10-Q			23


			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 of COVID-19, we temporarily suspended physical inventory counts at our stores. We resumed physical inventory counts in June 2020 using a statistical sampling method, and we have continued to record estimated losses related to shrink and markdowns based upon historical rates.

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.

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						~~Q3 2020~~Q2 2021 Form 10-Q			24


			SUPPLEMENTAL INFORMATION			Table of Contents
						Index to Notes

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

No response is required under Item 103 of Regulation S-K, nor have there been any material developments for any previously 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.~~expiration (2019 Program). We began ~~repurchasing~~repurchasing shares under the authorization during the first quarter of 2020. On August 11, 2021, our Board of Directors authorized a new, $15 billion share repurchase program with no stated expiration (2021 Program). We expect to begin repurchasing shares under the 2021 Program upon completion of the 2019 Program. Under the ~~program,~~2019 Program, we have repurchased ~~4.6~~17.2 million shares of common stock at an average price of ~~$105.80,~~$184.62, for a total investment of ~~$484 million. As of October 31, 2020, the dollar value of shares that may yet be purchased under the program is $4.5 billion. There were no~~$3.2 billion. The table below presents information with respect to Target common stock purchases made during the three ~~months~~months ended ~~October~~July 31, ~~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
May 2, 2021 through May 29, 2021
Open market and privately negotiated purchases	1,548,804	$	211.66	1,548,804	$	3,023,026,963
May 30, 2021 through July 3, 2021
Open market and privately negotiated purchases	2,934,662	233.31		2,934,662	2,338,345,656
July 4, 2021 through July 31, 2021
Open market and privately negotiated purchases	2,081,640	250.98		2,081,640	1,815,885,962
Total	6,565,106	$	233.81	6,565,106	$	1,815,885,962

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.


TARGET CORPORATION						~~Q3 2020~~Q2 2021 Form 10-Q			25


			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)

(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						~~Q3 2020~~Q2 2021 Form 10-Q			26


			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: ~~November 25, 2020~~August 27, 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						~~Q3 2020~~Q2 2021 Form 10-Q			27


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	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	26

Signature		27


INDEX TO NOTES

Notes to Consolidated Financial Statements		7
Note 1	Accounting Policies	8
Note 2	Coronavirus (COVID-19)	8
Note 3	Dermstore Sale	8
Note 4	Revenues	9
Note 45	Fair Value Measurements	10
Note 56	Property and Equipment	10
~~Note 6~~	~~Commercial Paper and Long-Term Debt~~	10
Note 7	Derivative Financial Instruments	10
Note 8	Income Taxes	11
Note 89	Share Repurchase	11
Note 910	Pension Benefits	12
Note 1011	Accumulated Other Comprehensive Loss	12


Fair Value Measurements - Recurring Basis			Fair Value at
(millions)	Classification	Pricing Category	October 31, 2020		February 1, 2020		November 2, 2019
Assets
Short-term investments	Cash and Cash Equivalents	Level 1	$	5,089	$	1,810	$	163
Prepaid forward contracts	Other Current Assets	Level 1	32		23		24
Equity securities (a)	Other Current Assets	Level 1	19		39		80
Interest rate swaps	Other Noncurrent Assets	Level 2	205		137		122
Liabilities


Interest rate swaps	Other Noncurrent Liabilities	Level 2	3		0		0


Contribution to Comparable Sales Change	Three Months Ended				Nine Months Ended
	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019
Stores originated channel comparable sales change	9.9	%	2.8	%	7.3	%	2.3	%
Contribution from digitally originated sales	10.9		1.7		11.4		1.9
Total comparable sales change	20.7	%	4.5	%	18.7	%	4.2	%