Cover Page
Cover Page - shares | 6 Months Ended | |
Aug. 03, 2019 | Aug. 26, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Aug. 3, 2019 | |
Entity File Number | 1-6049 | |
Entity Registrant Name | TARGET CORP | |
Entity Incorporation, State or Country Code | MN | |
Entity Tax Identification Number | 41-0215170 | |
Entity Address, Address Line One | 1000 Nicollet Mall | |
Entity Address, City or Town | Minneapolis | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55403 | |
City Area Code | 612 | |
Local Phone Number | 304-6073 | |
Title of 12(b) Security | Common stock, par value $0.0833 per share | |
Trading Symbol | TGT | |
Entity Central Index Key | 0000027419 | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 510,928,517 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-01 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | |
Revenue | $ 18,422 | $ 17,776 | $ 36,049 | $ 34,558 |
Cost of sales | 12,625 | 12,239 | 24,874 | 23,865 |
Selling, general and administrative expenses | 3,912 | 3,865 | 7,575 | 7,410 |
Depreciation and amortization (exclusive of depreciation included in cost of sales) | 561 | 539 | 1,142 | 1,109 |
Operating income | 1,324 | 1,133 | 2,458 | 2,174 |
Net interest expense | 120 | 115 | 246 | 237 |
Net other (income) / expense | (13) | (4) | (27) | (12) |
Earnings from continuing operations before income taxes | 1,217 | 1,022 | 2,239 | 1,949 |
Provision for income taxes | 279 | 223 | 509 | 433 |
Net earnings from continuing operations | 938 | 799 | 1,730 | 1,516 |
Discontinued operations, net of tax | 0 | 0 | 3 | 1 |
Net earnings | $ 938 | $ 799 | $ 1,733 | $ 1,517 |
Basic earnings per share | ||||
Continuing operations (in dollars per share) | $ 1.83 | $ 1.50 | $ 3.37 | $ 2.84 |
Discontinued operations (in dollars per share) | 0 | 0 | 0.01 | 0 |
Net earnings per share (in dollars per share) | 1.83 | 1.50 | 3.37 | 2.84 |
Diluted earnings per share | ||||
Continuing operations (in dollars per share) | 1.82 | 1.49 | 3.34 | 2.81 |
Discontinued operations (in dollars per share) | 0 | 0 | 0.01 | 0 |
Net earnings per share (in dollars per share) | $ 1.82 | $ 1.49 | $ 3.35 | $ 2.82 |
Weighted average common shares outstanding | ||||
Basic (in shares) | 512.1 | 531.7 | 513.9 | 534.3 |
Diluted (in shares) | 516.1 | 536.3 | 517.8 | 538.6 |
Antidilutive shares (in shares) | 0 | 0 | 0 | 0 |
Sales | ||||
Revenue | $ 18,183 | $ 17,552 | $ 35,584 | $ 34,108 |
Other revenue | ||||
Revenue | $ 239 | $ 224 | $ 465 | $ 450 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 938 | $ 799 | $ 1,733 | $ 1,517 |
Other comprehensive income | ||||
Pension, net of tax | 10 | 16 | 20 | 29 |
Currency translation adjustment and cash flow hedges, net of tax | 0 | (2) | 3 | (5) |
Other comprehensive income | 10 | 14 | 23 | 24 |
Comprehensive income | $ 948 | $ 813 | $ 1,756 | $ 1,541 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Millions | Aug. 03, 2019 | Feb. 02, 2019 | Aug. 04, 2018 |
Assets | |||
Cash and cash equivalents | $ 1,656 | $ 1,556 | $ 1,180 |
Inventory | 9,122 | 9,497 | 9,112 |
Other current assets | 1,341 | 1,466 | 1,211 |
Total current assets | 12,119 | 12,519 | 11,503 |
Property and equipment | |||
Land | 6,054 | 6,064 | 6,074 |
Buildings and improvements | 29,908 | 29,240 | 28,629 |
Fixtures and equipment | 5,622 | 5,912 | 5,356 |
Computer hardware and software | 2,627 | 2,544 | 2,575 |
Construction-in-progress | 667 | 460 | 685 |
Accumulated depreciation | (18,866) | (18,687) | (18,147) |
Property and equipment, net | 26,012 | 25,533 | 25,172 |
Operating lease assets | 2,062 | 1,965 | 1,976 |
Other noncurrent assets | 1,373 | 1,273 | 1,345 |
Total assets | 41,566 | 41,290 | 39,996 |
Liabilities and shareholders’ investment | |||
Accounts payable | 9,152 | 9,761 | 9,116 |
Accrued and other current liabilities | 4,059 | 4,201 | 3,878 |
Current portion of long-term debt and other borrowings | 1,153 | 1,052 | 1,044 |
Total current liabilities | 14,364 | 15,014 | 14,038 |
Long-term debt and other borrowings | 10,365 | 10,223 | 10,108 |
Noncurrent operating lease liabilities | 2,111 | 2,004 | 2,028 |
Deferred income taxes | 1,082 | 972 | 828 |
Other noncurrent liabilities | 1,808 | 1,780 | 1,827 |
Total noncurrent liabilities | 15,366 | 14,979 | 14,791 |
Shareholders’ investment | |||
Common stock | 43 | 43 | 44 |
Additional paid-in capital | 6,114 | 6,042 | 5,788 |
Retained earnings | 6,461 | 6,017 | 6,058 |
Accumulated other comprehensive loss | (782) | (805) | (723) |
Total shareholders’ investment | 11,836 | 11,297 | 11,167 |
Total liabilities and shareholders’ investment | $ 41,566 | $ 41,290 | $ 39,996 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position (Parenthetical) - $ / shares | Aug. 03, 2019 | Feb. 02, 2019 | Aug. 04, 2018 |
Statement of Financial Position [Abstract] | |||
Common stock, shares authorized | 6,000,000,000 | 6,000,000,000 | 6,000,000,000 |
Common stock, par value (in dollars per share) | $ 0.0833 | $ 0.0833 | $ 0.0833 |
Common stock, shares issued | 511,335,375 | 517,761,600 | 526,112,846 |
Common stock, shares outstanding | 511,335,375 | 517,761,600 | 526,112,846 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Aug. 03, 2019 | Aug. 04, 2018 | |
Operating activities | ||
Net earnings | $ 1,733 | $ 1,517 |
Earnings from discontinued operations, net of tax | 3 | 1 |
Net earnings from continuing operations | 1,730 | 1,516 |
Adjustments to reconcile net earnings to cash provided by operations | ||
Depreciation and amortization | 1,267 | 1,234 |
Share-based compensation expense | 86 | 71 |
Deferred income taxes | 104 | 129 |
Noncash losses / (gains) and other, net | 42 | 99 |
Changes in operating accounts | ||
Inventory | 375 | (515) |
Other assets | 64 | 1 |
Accounts payable | (731) | 342 |
Accrued and other liabilities | (127) | (154) |
Cash provided by operating activities—continuing operations | 2,810 | 2,723 |
Cash provided by operating activities—discontinued operations | 2 | 1 |
Cash provided by operations | 2,812 | 2,724 |
Investing activities | ||
Expenditures for property and equipment | (1,394) | (1,856) |
Proceeds from disposal of property and equipment | 10 | 15 |
Other investments | 0 | 3 |
Cash required for investing activities | (1,384) | (1,838) |
Financing activities | ||
Additions to long-term debt | 994 | 0 |
Reductions of long-term debt | (1,026) | (255) |
Dividends paid | (658) | (665) |
Repurchase of stock | (662) | (954) |
Accelerated share repurchase pending final settlement | 0 | (525) |
Stock option exercises | 24 | 50 |
Cash required for financing activities | (1,328) | (2,349) |
Net increase / (decrease) in cash and cash equivalents | 100 | (1,463) |
Cash and cash equivalents at beginning of period | 1,556 | 2,643 |
Cash and cash equivalents at end of period | 1,656 | 1,180 |
Supplemental information | ||
Leased assets obtained in exchange for new finance lease liabilities | 156 | 15 |
Leased assets obtained in exchange for new operating lease liabilities | $ 195 | $ 169 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Investment - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Aug. 03, 2019 | May 04, 2019 | Feb. 02, 2019 | Nov. 03, 2018 | Aug. 04, 2018 | May 05, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | |
Increase (Decrease) in Shareholders' Investment | ||||||||
Beginning balance (in shares) | 517,761,600 | 526,112,846 | 517,761,600 | |||||
Beginning balance | $ 11,117 | $ 11,297 | $ 11,080 | $ 11,167 | $ 11,158 | $ 11,651 | $ 11,297 | $ 11,651 |
Net earnings | 938 | 795 | 799 | 622 | 799 | 718 | 1,733 | 1,517 |
Other comprehensive income (loss) | 10 | 13 | (91) | 9 | 14 | 10 | $ 23 | $ 24 |
Dividends declared | (341) | (330) | (336) | (338) | (341) | (333) | ||
Repurchase of stock | 59 | (277) | (167) | (2) | (7) | (494) | ||
Accelerated share repurchase pending final settlement | (400) | (450) | (525) | (425) | ||||
Stock options and awards | $ 53 | 19 | $ 12 | 72 | $ 69 | 31 | ||
Ending balance (in shares) | 511,335,375 | 517,761,600 | 526,112,846 | 511,335,375 | 526,112,846 | |||
Ending balance | $ 11,836 | $ 11,117 | $ 11,297 | $ 11,080 | $ 11,167 | $ 11,158 | $ 11,836 | $ 11,167 |
Common Stock | ||||||||
Increase (Decrease) in Shareholders' Investment | ||||||||
Beginning balance (in shares) | 512,300,000 | 517,800,000 | 521,800,000 | 526,100,000 | 532,900,000 | 541,700,000 | 517,800,000 | 541,700,000 |
Beginning balance | $ 43 | $ 43 | $ 43 | $ 44 | $ 44 | $ 45 | $ 43 | $ 45 |
Repurchase of stock (in shares) | (1,300,000) | (3,600,000) | (4,700,000) | (1,700,000) | (2,900,000) | (6,900,000) | ||
Repurchase of stock | $ (1) | $ (1) | ||||||
Accelerated share repurchase pending final settlement (in shares) | (3,000,000) | (3,500,000) | (4,600,000) | (2,900,000) | ||||
Stock options and awards (in shares) | 300,000 | 1,100,000 | 700,000 | 900,000 | 700,000 | 1,000,000 | ||
Ending balance (in shares) | 511,300,000 | 512,300,000 | 517,800,000 | 521,800,000 | 526,100,000 | 532,900,000 | 511,300,000 | 526,100,000 |
Ending balance | $ 43 | $ 43 | $ 43 | $ 43 | $ 44 | $ 44 | $ 43 | $ 44 |
Additional Paid-in Capital | ||||||||
Increase (Decrease) in Shareholders' Investment | ||||||||
Beginning balance | 5,908 | 6,042 | 5,867 | 5,788 | 5,664 | 5,858 | 6,042 | 5,858 |
Repurchase of stock | 153 | 163 | 170 | 225 | ||||
Accelerated share repurchase pending final settlement | (153) | (163) | (170) | (225) | ||||
Stock options and awards | 53 | 19 | 12 | 72 | 69 | 31 | ||
Ending balance | 6,114 | 5,908 | 6,042 | 5,867 | 5,788 | 5,664 | 6,114 | 5,788 |
Retained Earnings | ||||||||
Increase (Decrease) in Shareholders' Investment | ||||||||
Beginning balance | 5,958 | 6,017 | 5,884 | 6,058 | 6,187 | 6,495 | 6,017 | 6,495 |
Net earnings | 938 | 795 | 799 | 622 | 799 | 718 | ||
Dividends declared | (341) | (330) | (336) | (338) | (341) | (333) | ||
Repurchase of stock | (94) | (277) | (330) | (171) | (232) | (493) | ||
Accelerated share repurchase pending final settlement | (247) | (287) | (355) | (200) | ||||
Ending balance | 6,461 | 5,958 | 6,017 | 5,884 | 6,058 | 6,187 | 6,461 | 6,058 |
Accumulated Other Comprehensive (Loss)/Income | ||||||||
Increase (Decrease) in Shareholders' Investment | ||||||||
Beginning balance | (792) | (805) | (714) | (723) | (737) | (747) | (805) | (747) |
Other comprehensive income (loss) | 10 | 13 | (91) | 9 | 14 | 10 | ||
Ending balance | $ (782) | $ (792) | $ (805) | $ (714) | $ (723) | $ (737) | $ (782) | $ (723) |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Investment (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | |
Aug. 03, 2019 | Aug. 04, 2018 | Feb. 02, 2019 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared per share (in dollars per share) | $ 0.66 | $ 0.64 | $ 2.54 |
Accounting Policies
Accounting Policies | 6 Months Ended |
Aug. 03, 2019 | |
Accounting Policies [Abstract] | |
Accounting Policies | 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 2018 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 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. |
Revenues
Revenues | 6 Months Ended |
Aug. 03, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | 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 income from our arrangement with TD Bank Group (TD). Revenues Three Months Ended Six Months Ended (millions) August 3, August 4, August 3, August 4, Apparel and accessories (a) $ 3,656 $ 3,470 $ 6,946 $ 6,584 Beauty and household essentials (a) 5,076 4,784 10,047 9,401 Food and beverage 3,460 3,372 7,182 6,959 Hardlines 2,503 2,501 4,889 4,814 Home furnishings and décor 3,457 3,402 6,458 6,304 Other 31 23 62 46 Sales 18,183 17,552 35,584 34,108 Credit card profit sharing 168 167 328 333 Other 71 57 137 117 Other revenue 239 224 465 450 Total revenue $ 18,422 $ 17,776 $ 36,049 $ 34,558 (a) We reclassified certain non-apparel baby merchandise sales totaling $398 million and $854 million for the three and six months ended August 3, 2019 , respectively, and $373 million and $763 million for the three and six months ended August 4, 2018 , respectively, from Apparel and Accessories to Beauty and Household Essentials. We record almost all retail store revenues at the point of sale. Digitally originated sales may include shipping revenue and are recorded upon delivery to the guest or upon guest pickup at the store. Sales are recognized net of expected returns, which we estimate using historical return patterns and our expectation of future returns. As of August 3, 2019 , February 2, 2019 , and August 4, 2018 , the accrual for estimated returns was $131 million , $116 million , and $114 million , respectively. We have not historically had material adjustments to our returns estimates. Revenue from Target gift card sales is recognized upon gift card redemption, which is typically within one year of issuance. (millions) February 2, Gift Cards Issued During Current Period But Not Redeemed (a) Revenue Recognized From Beginning Liability August 3, Gift card liability $ 840 $ 317 $ (465 ) $ 692 (a) 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. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Aug. 03, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value measurements are reported in one of three levels reflecting the valuation techniques used to determine fair value. Fair Value Measurements - Recurring Basis Fair Value at (millions) Classification Pricing Category August 3, February 2, August 4, Assets Short-term investments Cash and Cash Equivalents Level 1 $ 796 $ 769 $ 353 Prepaid forward contracts Other Current Assets Level 1 20 19 22 Interest rate swaps Other Noncurrent Assets Level 2 108 10 — Liabilities Interest rate swaps Other Current Liabilities Level 2 — 3 7 Interest rate swaps Other Noncurrent Liabilities Level 2 — — 2 Significant Financial Instruments not Measured at Fair Value (a) (millions) August 3, 2019 February 2, 2019 August 4, 2018 Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt, including current portion (b) $ 10,244 $ 11,635 $ 10,247 $ 10,808 $ 10,243 $ 10,682 (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. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Aug. 03, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 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 or distribution center, discontinue projects, or make significant software changes—indicate that the asset’s carrying value may not be recoverable. We recognized impairment charges of $10 million and $13 million during the three and six months ended August 3, 2019 , respectively, primarily resulting from store impairments. We recognized impairment charges of $78 million and $85 million during the three and six months ended August 4, 2018 , respectively, primarily resulting from planned store closures. The impairment charges are recorded in Selling, General and Administrative Expenses. |
Commercial Paper and Long-Term
Commercial Paper and Long-Term Debt | 6 Months Ended |
Aug. 03, 2019 | |
Debt Disclosure [Abstract] | |
Commercial Paper and Long-Term Debt | Commercial Paper and Long-Term Debt In March 2019, we issued $1,000 million of 10 -year unsecured fixed rate debt at 3.375 percent, and in June 2019, we repaid $1,000 million of 2.3 percent unsecured fixed rate debt at maturity. Our commercial paper program provides a source of short-term financing. For the six months ended August 3, 2019 , the maximum amount outstanding was $744 million , and the average daily amount outstanding was $74 million at a weighted average annual interest rate of 2.4 percent . For the six months ended August 4, 2018 , the maximum amount outstanding was $658 million , and the average daily amount outstanding was $63 million at a weighted average annual interest rate of 1.8 percent . As of August 3, 2019 , and August 4, 2018 , no balances were outstanding. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Aug. 03, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Our derivative instruments consist of interest rate swaps used to mitigate interest rate risk. As a result, we have counterparty credit exposure to large global financial institutions, which we monitor on an ongoing basis. Note 3 provides the fair value and classification of these instruments. In March 2019, we entered into interest rate swaps with a total notional amount of $1,000 million , and in June 2019, interest rate swaps with a total notional amount of $1,000 million matured. As of August 3, 2019 , we were party to interest rate swaps with notional amounts totaling $1,500 million , compared with $1,250 million as of August 4, 2018 . We pay a variable rate and receive a fixed rate under each of these agreements. All of the agreements are designated as fair value hedges, and all were perfectly effective during the three and six months ended August 3, 2019 , and August 4, 2018 . Effect of Hedges on Debt (millions) August 3, February 2, August 4, Current portion of long-term debt and other borrowings Carrying amount of hedged debt $ — $ 996 $ 992 Cumulative hedging adjustments, included in carrying amount — (3 ) (7 ) Long-term debt and other borrowings Carrying amount of hedged debt 1,600 508 247 Cumulative hedging adjustments, included in carrying amount 108 10 (2 ) Effect of Hedges on Net Interest Expense Three Months Ended Six Months Ended (millions) August 3, August 4, August 3, August 4, Gain (loss) on fair value hedges recognized in Net Interest Expense Interest rate swap designated as fair value hedges $ 86 $ 1 $ 101 $ (3 ) Hedged debt (86 ) (1 ) (101 ) 3 Total $ — $ — $ — $ — |
Share Repurchase
Share Repurchase | 6 Months Ended |
Aug. 03, 2019 | |
Equity [Abstract] | |
Share Repurchase | 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. Three Months Ended Six Months Ended (millions, except per share data) August 3, 2019 (a) August 4, 2018 (b) August 3, 2019 (a) August 4, 2018 (b) Total number of shares purchased 4.3 5.8 7.9 12.7 Average price paid per share $ 80.02 $ 74.31 $ 78.63 $ 72.64 Total investment $ 341 $ 431 $ 618 $ 925 (a) Includes activity related to the ASR arrangement entered in first quarter 2019 because final settlement occurred in second quarter 2019. Under the ASR arrangement, we repurchased 4.2 million shares for a total cash investment of $340 million . We did not enter into any new ASR arrangements during second quarter 2019. (b) Activity related to the second quarter 2018 ASR arrangement described below is omitted because final settlement had not occurred as of August 4, 2018. During the second quarter of 2018, we entered into an ASR arrangement to repurchase $400 to $525 million of our common stock. Under the agreement, we paid $525 million and received an initial delivery of 4.6 million shares, which were retired, resulting in a $355 million reduction to Retained Earnings. As of August 4, 2018 , $170 million was included as a reduction to Additional Paid-in Capital. Upon final settlement in the third quarter of 2018, we received an additional 0.2 million shares, which were retired, and $125 million for the remaining amount not settled in shares. In total, we repurchased 4.8 million shares under the ASR arrangement for a total cash investment of $400 million ( $83.88 |
Pension Benefits
Pension Benefits | 6 Months Ended |
Aug. 03, 2019 | |
Retirement Benefits [Abstract] | |
Pension Benefits | Pension Benefits We provide pension plan benefits to eligible team members. Net Pension Benefits Expense Three Months Ended Six Months Ended (millions) Classification August 3, August 4, August 3, August 4, Service cost benefits earned SG&A Expenses $ 23 $ 25 $ 46 $ 49 Interest cost on projected benefit obligation Net Other (Income) / Expense 37 37 74 73 Expected return on assets Net Other (Income) / Expense (62 ) (62 ) (124 ) (123 ) Amortization of losses Net Other (Income) / Expense 16 20 31 41 Amortization of prior service cost Net Other (Income) / Expense (3 ) (3 ) (5 ) (6 ) Settlement charges Net Other (Income) / Expense — 3 — 3 Total $ 11 $ 20 $ 22 $ 37 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) / Income | 6 Months Ended |
Aug. 03, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive (Loss) / Income | Accumulated Other Comprehensive (Loss) / Income (millions) Cash Flow Hedges Currency Translation Adjustment Pension Total February 2, 2019 $ (13 ) $ (20 ) $ (772 ) $ (805 ) Other comprehensive income before reclassifications, net of tax — 3 — 3 Amounts reclassified from AOCI, net of tax — — 20 20 August 3, 2019 $ (13 ) $ (17 ) $ (752 ) $ (782 ) |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue | Revenues Three Months Ended Six Months Ended (millions) August 3, August 4, August 3, August 4, Apparel and accessories (a) $ 3,656 $ 3,470 $ 6,946 $ 6,584 Beauty and household essentials (a) 5,076 4,784 10,047 9,401 Food and beverage 3,460 3,372 7,182 6,959 Hardlines 2,503 2,501 4,889 4,814 Home furnishings and décor 3,457 3,402 6,458 6,304 Other 31 23 62 46 Sales 18,183 17,552 35,584 34,108 Credit card profit sharing 168 167 328 333 Other 71 57 137 117 Other revenue 239 224 465 450 Total revenue $ 18,422 $ 17,776 $ 36,049 $ 34,558 (a) We reclassified certain non-apparel baby merchandise sales totaling $398 million and $854 million for the three and six months ended August 3, 2019 , respectively, and $373 million and $763 million for the three and six months ended August 4, 2018 , respectively, from Apparel and Accessories to Beauty and Household Essentials. |
Schedule of Gift Card Liability | Revenue from Target gift card sales is recognized upon gift card redemption, which is typically within one year of issuance. (millions) February 2, Gift Cards Issued During Current Period But Not Redeemed (a) Revenue Recognized From Beginning Liability August 3, Gift card liability $ 840 $ 317 $ (465 ) $ 692 (a) Net of estimated breakage. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements - Recurring Basis | Fair value measurements are reported in one of three levels reflecting the valuation techniques used to determine fair value. Fair Value Measurements - Recurring Basis Fair Value at (millions) Classification Pricing Category August 3, February 2, August 4, Assets Short-term investments Cash and Cash Equivalents Level 1 $ 796 $ 769 $ 353 Prepaid forward contracts Other Current Assets Level 1 20 19 22 Interest rate swaps Other Noncurrent Assets Level 2 108 10 — Liabilities Interest rate swaps Other Current Liabilities Level 2 — 3 7 Interest rate swaps Other Noncurrent Liabilities Level 2 — — 2 |
Schedule of Significant Financial Instruments not Measured at Fair Value | Significant Financial Instruments not Measured at Fair Value (a) (millions) August 3, 2019 February 2, 2019 August 4, 2018 Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt, including current portion (b) $ 10,244 $ 11,635 $ 10,247 $ 10,808 $ 10,243 $ 10,682 (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. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivatives | Effect of Hedges on Debt (millions) August 3, February 2, August 4, Current portion of long-term debt and other borrowings Carrying amount of hedged debt $ — $ 996 $ 992 Cumulative hedging adjustments, included in carrying amount — (3 ) (7 ) Long-term debt and other borrowings Carrying amount of hedged debt 1,600 508 247 Cumulative hedging adjustments, included in carrying amount 108 10 (2 ) Effect of Hedges on Net Interest Expense Three Months Ended Six Months Ended (millions) August 3, August 4, August 3, August 4, Gain (loss) on fair value hedges recognized in Net Interest Expense Interest rate swap designated as fair value hedges $ 86 $ 1 $ 101 $ (3 ) Hedged debt (86 ) (1 ) (101 ) 3 Total $ — $ — $ — $ — |
Share Repurchase (Tables)
Share Repurchase (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Equity [Abstract] | |
Schedule of Share Repurchase (excluding ASR) | Three Months Ended Six Months Ended (millions, except per share data) August 3, 2019 (a) August 4, 2018 (b) August 3, 2019 (a) August 4, 2018 (b) Total number of shares purchased 4.3 5.8 7.9 12.7 Average price paid per share $ 80.02 $ 74.31 $ 78.63 $ 72.64 Total investment $ 341 $ 431 $ 618 $ 925 (a) Includes activity related to the ASR arrangement entered in first quarter 2019 because final settlement occurred in second quarter 2019. Under the ASR arrangement, we repurchased 4.2 million shares for a total cash investment of $340 million . We did not enter into any new ASR arrangements during second quarter 2019. (b) Activity related to the second quarter 2018 ASR arrangement described below is omitted because final settlement had not occurred as of August 4, 2018. |
Pension Benefits (Tables)
Pension Benefits (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of Pension Plan Benefits | Net Pension Benefits Expense Three Months Ended Six Months Ended (millions) Classification August 3, August 4, August 3, August 4, Service cost benefits earned SG&A Expenses $ 23 $ 25 $ 46 $ 49 Interest cost on projected benefit obligation Net Other (Income) / Expense 37 37 74 73 Expected return on assets Net Other (Income) / Expense (62 ) (62 ) (124 ) (123 ) Amortization of losses Net Other (Income) / Expense 16 20 31 41 Amortization of prior service cost Net Other (Income) / Expense (3 ) (3 ) (5 ) (6 ) Settlement charges Net Other (Income) / Expense — 3 — 3 Total $ 11 $ 20 $ 22 $ 37 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive (Loss) / Income (Tables) | 6 Months Ended |
Aug. 03, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Summary of the Changes in Accumulated Other Comprehensive Income (AOCI) by Component | (millions) Cash Flow Hedges Currency Translation Adjustment Pension Total February 2, 2019 $ (13 ) $ (20 ) $ (772 ) $ (805 ) Other comprehensive income before reclassifications, net of tax — 3 — 3 Amounts reclassified from AOCI, net of tax — — 20 20 August 3, 2019 $ (13 ) $ (17 ) $ (752 ) $ (782 ) |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 18,422 | $ 17,776 | $ 36,049 | $ 34,558 |
Apparel and accessories | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,656 | 3,470 | 6,946 | 6,584 |
Apparel and accessories | Reclassified Revenue from Contract with Customer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 398 | 373 | 854 | 763 |
Beauty and household essentials | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 5,076 | 4,784 | 10,047 | 9,401 |
Beauty and household essentials | Reclassified Revenue from Contract with Customer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 398 | 373 | 854 | 763 |
Food and beverage | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,460 | 3,372 | 7,182 | 6,959 |
Hardlines | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,503 | 2,501 | 4,889 | 4,814 |
Home furnishings and décor | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,457 | 3,402 | 6,458 | 6,304 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 31 | 23 | 62 | 46 |
Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 18,183 | 17,552 | 35,584 | 34,108 |
Credit card profit sharing | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 168 | 167 | 328 | 333 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 71 | 57 | 137 | 117 |
Other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 239 | $ 224 | $ 465 | $ 450 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Millions | Aug. 03, 2019 | Feb. 02, 2019 | Aug. 04, 2018 |
Revenue from Contract with Customer [Abstract] | |||
Reserve | $ 131 | $ 116 | $ 114 |
Revenues - Gift Card Liability
Revenues - Gift Card Liability (Details) $ in Millions | 6 Months Ended |
Aug. 03, 2019USD ($) | |
Change in Contract with Customer, Liability [Roll Forward] | |
Beginning balance | $ 840 |
Gift Cards Issued During Current Period But Not Redeemed | 317 |
Revenue Recognized From Beginning Liability | (465) |
Ending balance | $ 692 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurements - Recurring Basis (Details) - USD ($) $ in Millions | Aug. 03, 2019 | Feb. 02, 2019 | Aug. 04, 2018 |
Assets | |||
Prepaid forward contracts classified as Other Current Assets | $ 1,341 | $ 1,466 | $ 1,211 |
Interest rate swaps classified as Other Noncurrent Assets | 1,373 | 1,273 | 1,345 |
Liabilities | |||
Interest rate swaps classified as Other Noncurrent Liabilities | 1,808 | 1,780 | 1,827 |
Fair value measured on recurring basis | Level 1 | Prepaid forward contracts | |||
Assets | |||
Prepaid forward contracts classified as Other Current Assets | 20 | 19 | 22 |
Fair value measured on recurring basis | Level 1 | Short-term investments | |||
Assets | |||
Short-term investments classified as Cash and Cash Equivalents | 796 | 769 | 353 |
Fair value measured on recurring basis | Level 2 | Interest rate swaps | |||
Assets | |||
Interest rate swaps classified as Other Noncurrent Assets | 108 | 10 | 0 |
Liabilities | |||
Interest rate swaps classified as Other Current Liabilities | 0 | 3 | 7 |
Interest rate swaps classified as Other Noncurrent Liabilities | $ 0 | $ 0 | $ 2 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Significant Financial Instruments not Measured at Fair Value (Details) - USD ($) $ in Millions | Aug. 03, 2019 | Feb. 02, 2019 | Aug. 04, 2018 |
Carrying Amount | |||
Financial Instruments, Balance Sheet Groupings | |||
Long-term debt, including current portion | $ 10,244 | $ 10,247 | $ 10,243 |
Fair Value | |||
Financial Instruments, Balance Sheet Groupings | |||
Long-term debt, including current portion | $ 11,635 | $ 10,808 | $ 10,682 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | |
Property, Plant and Equipment [Abstract] | ||||
Impairments | $ 10 | $ 78 | $ 13 | $ 85 |
Commercial Paper and Long-Ter_2
Commercial Paper and Long-Term Debt (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Aug. 03, 2019 | Aug. 04, 2018 | Jun. 30, 2019 | |
Commercial Paper | ||||
Debt Instrument [Line Items] | ||||
Maximum amount outstanding during period | $ 744,000,000 | $ 658,000,000 | ||
Average daily amount outstanding | $ 74,000,000 | $ 63,000,000 | ||
Weighted average interest rate | 2.40% | 1.80% | ||
Amount outstanding | $ 0 | $ 0 | ||
Unsecured Fixed Rate 3.375 Percent Debt, Maturing 2029 | Unsecured Debt | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 1,000,000,000 | |||
Term of debt | 10 years | |||
Interest rate | 3.375% | |||
Unsecured Fixed Rate 2.3 Percent Debt, Maturing June 2019 | Unsecured Debt | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 1,000,000,000 | |||
Interest rate | 2.30% |
Derivative Financial Instrume_3
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Millions | Aug. 03, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Aug. 04, 2018 |
Designated as Hedging Instrument | Interest Rate Swaps | ||||
Derivative Contracts - Effect on Results of Operations (millions) | ||||
Notional amount | $ 1,500 | $ 1,000 | $ 1,000 | $ 1,250 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Effect of Hedges on Debt (Details) - USD ($) $ in Millions | Aug. 03, 2019 | Feb. 02, 2019 | Aug. 04, 2018 |
Current portion of long-term debt and other borrowings | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Carrying amount of hedged debt | $ 0 | $ 996 | $ 992 |
Cumulative hedging adjustments, included in carrying amount | 0 | (3) | (7) |
Long-term debt and other borrowings | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Carrying amount of hedged debt | 1,600 | 508 | 247 |
Cumulative hedging adjustments, included in carrying amount | $ 108 | $ 10 | $ (2) |
Derivative Financial Instrume_5
Derivative Financial Instruments - Effect of Hedges on Net Interest Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Interest rate swap designated as fair value hedges | $ 86 | $ 1 | $ 101 | $ (3) |
Hedged debt | (86) | (1) | (101) | 3 |
Total | $ 0 | $ 0 | $ 0 | $ 0 |
Share Repurchase - Schedule of
Share Repurchase - Schedule of Share Repurchases (excluding ASR) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | |
Equity [Abstract] | ||||
Total number of shares purchased | 4.3 | 5.8 | 7.9 | 12.7 |
Average price paid per share (in dollars per share) | $ 80.02 | $ 74.31 | $ 78.63 | $ 72.64 |
Total investment | $ 341 | $ 431 | $ 618 | $ 925 |
Share Repurchase - Narrative (D
Share Repurchase - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||||||
Aug. 03, 2019 | May 04, 2019 | Feb. 02, 2019 | Nov. 03, 2018 | Aug. 04, 2018 | May 05, 2018 | Aug. 03, 2019 | Nov. 03, 2018 | Aug. 04, 2018 | |
Equity, Class of Treasury Stock [Line Items] | |||||||||
Stock repurchased (in shares) | 4.3 | 5.8 | 7.9 | 12.7 | |||||
Stock repurchased and retired | $ (59) | $ 277 | $ 167 | $ 2 | $ 7 | $ 494 | |||
Share Repurchase Program 2017 | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Stock repurchased (in shares) | 4.2 | 4.8 | |||||||
Prepaid repurchase amount | $ 340 | $ 400 | |||||||
Price paid per share (in dollars per share) | $ 83.88 | ||||||||
Authorized shares for accelerated stock repurchase, low end | 400 | $ 400 | |||||||
Authorized shares for accelerated stock repurchase, high end | 525 | 525 | |||||||
Settlement of purchase agreement | $ 125 | $ 525 | $ 125 | 525 | |||||
Repurchased and retired stock (in shares) | 0.2 | 4.6 | |||||||
Stock repurchased and retired | $ 355 | ||||||||
Shares receivable | $ 170 | $ 170 |
Pension Benefits - Schedule of
Pension Benefits - Schedule of Pension Plan Benefits (Details) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 03, 2019 | Aug. 04, 2018 | Aug. 03, 2019 | Aug. 04, 2018 | |
Net Pension Benefits Expense | ||||
Service cost benefits earned | $ 23 | $ 25 | $ 46 | $ 49 |
Interest cost on projected benefit obligation | 37 | 37 | 74 | 73 |
Expected return on assets | (62) | (62) | (124) | (123) |
Amortization of losses | 16 | 20 | 31 | 41 |
Amortization of prior service cost | (3) | (3) | (5) | (6) |
Settlement charges | 0 | 3 | 0 | 3 |
Total | $ 11 | $ 20 | $ 22 | $ 37 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss) / Income (Details) $ in Millions | 6 Months Ended |
Aug. 03, 2019USD ($) | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | $ 11,297 |
Ending balance | 11,836 |
Cash Flow Hedges | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | (13) |
Other comprehensive income before reclassifications, net of tax | 0 |
Amounts reclassified from AOCI, net of tax | 0 |
Ending balance | (13) |
Currency Translation Adjustment | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | (20) |
Other comprehensive income before reclassifications, net of tax | 3 |
Amounts reclassified from AOCI, net of tax | 0 |
Ending balance | (17) |
Pension | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | (772) |
Other comprehensive income before reclassifications, net of tax | 0 |
Amounts reclassified from AOCI, net of tax | 20 |
Ending balance | (752) |
Total | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | (805) |
Other comprehensive income before reclassifications, net of tax | 3 |
Amounts reclassified from AOCI, net of tax | 20 |
Ending balance | $ (782) |