Cover Page
Cover Page - shares | 3 Months Ended | |
May 02, 2020 | May 22, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | May 2, 2020 | |
Document Transition Report | false | |
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 $0.0833 per share | |
Trading Symbol | TGT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 500,015,480 | |
Entity Central Index Key | 0000027419 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-30 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Revenue | $ 19,615 | $ 17,627 |
Selling, general and administrative expenses | 4,060 | 3,663 |
Depreciation and amortization (exclusive of depreciation included in cost of sales) | 577 | 581 |
Operating income | 468 | 1,135 |
Net interest expense | 117 | 126 |
Net other (income) / expense | 22 | (12) |
Earnings from continuing operations before income taxes | 329 | 1,021 |
Provision for income taxes | 45 | 229 |
Net earnings from continuing operations | 284 | 792 |
Discontinued operations, net of tax | 0 | 3 |
Net earnings | $ 284 | $ 795 |
Basic earnings per share | ||
Continuing operations (in dollars per share) | $ 0.57 | $ 1.54 |
Discontinued operations (in dollars per share) | 0 | 0 |
Net earnings per share (in dollars per share) | 0.57 | 1.54 |
Diluted earnings per share | ||
Continuing operations (in dollars per share) | 0.56 | 1.53 |
Discontinued operations (in dollars per share) | 0 | 0 |
Net earnings per share (in dollars per share) | $ 0.56 | $ 1.53 |
Weighted average common shares outstanding | ||
Basic (in shares) | 501 | 515.7 |
Diluted (in shares) | 505.8 | 519.5 |
Antidilutive shares (in shares) | 0.2 | 0.1 |
Sales | ||
Revenue | $ 19,371 | $ 17,401 |
Cost of sales | 14,510 | 12,248 |
Other revenue | ||
Revenue | $ 244 | $ 226 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 284 | $ 795 |
Other comprehensive income | ||
Pension, net of tax | 22 | 10 |
Currency translation adjustment and cash flow hedges, net of tax | (8) | 3 |
Other comprehensive income | 14 | 13 |
Comprehensive income | $ 298 | $ 808 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Millions | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 |
Assets | |||
Cash and cash equivalents | $ 4,566 | $ 2,577 | $ 1,173 |
Inventory | 8,584 | 8,992 | 9,060 |
Other current assets | 1,465 | 1,333 | 1,374 |
Total current assets | 14,615 | 12,902 | 11,607 |
Property and equipment | |||
Land | 6,034 | 6,036 | 6,061 |
Buildings and improvements | 30,756 | 30,603 | 29,573 |
Fixtures and equipment | 5,486 | 6,083 | 5,401 |
Computer hardware and software | 2,597 | 2,692 | 2,553 |
Construction-in-progress | 803 | 533 | 574 |
Accumulated depreciation | (19,087) | (19,664) | (18,456) |
Property and equipment, net | 26,589 | 26,283 | 25,706 |
Operating lease assets | 2,235 | 2,236 | 2,019 |
Other noncurrent assets | 1,367 | 1,358 | 1,287 |
Total assets | 44,806 | 42,779 | 40,619 |
Liabilities and shareholders’ investment | |||
Accounts payable | 9,625 | 9,920 | 8,360 |
Accrued and other current liabilities | 4,619 | 4,406 | 3,823 |
Current portion of long-term debt and other borrowings | 168 | 161 | 1,056 |
Total current liabilities | 14,412 | 14,487 | 13,239 |
Long-term debt and other borrowings | 14,073 | 11,338 | 11,357 |
Noncurrent operating lease liabilities | 2,249 | 2,275 | 2,064 |
Deferred income taxes | 1,122 | 1,122 | 1,034 |
Other noncurrent liabilities | 1,781 | 1,724 | 1,808 |
Total noncurrent liabilities | 19,225 | 16,459 | 16,263 |
Shareholders’ investment | |||
Common stock | 42 | 42 | 43 |
Additional paid-in capital | 6,206 | 6,226 | 5,908 |
Retained earnings | 5,775 | 6,433 | 5,958 |
Accumulated other comprehensive loss | (854) | (868) | (792) |
Total shareholders’ investment | 11,169 | 11,833 | 11,117 |
Total liabilities and shareholders’ investment | $ 44,806 | $ 42,779 | $ 40,619 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position (Parenthetical) - $ / shares | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 |
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 | 499,919,691 | 504,198,962 | 512,312,434 |
Common stock, shares outstanding | 499,919,691 | 504,198,962 | 512,312,434 |
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 | 3 Months Ended | |||
May 02, 2020 | Feb. 01, 2020 | Aug. 03, 2019 | May 04, 2019 | |
Operating activities | ||||
Net earnings | $ 284 | $ 834 | $ 938 | $ 795 |
Earnings from discontinued operations, net of tax | 0 | 3 | ||
Net earnings from continuing operations | 284 | 792 | ||
Adjustments to reconcile net earnings to cash provided by operations | ||||
Depreciation and amortization | 641 | 644 | ||
Share-based compensation expense | 49 | 46 | ||
Deferred income taxes | (4) | 59 | ||
Noncash losses / (gains) and other, net | 5 | 10 | ||
Changes in operating accounts | ||||
Inventory | 408 | 438 | ||
Other assets | 11 | 17 | ||
Accounts payable | (280) | (1,402) | ||
Accrued and other liabilities | 170 | (281) | ||
Cash provided by operations | 1,284 | 323 | ||
Investing activities | ||||
Expenditures for property and equipment | (751) | (655) | ||
Proceeds from disposal of property and equipment | 6 | 5 | ||
Other investments | 1 | 1 | ||
Cash required for investing activities | (744) | (649) | ||
Financing activities | ||||
Additions to long-term debt | 2,480 | 994 | ||
Reductions of long-term debt | (17) | (13) | ||
Dividends paid | (332) | (330) | ||
Repurchase of stock | (686) | (320) | ||
Accelerated share repurchase pending final settlement | 0 | (400) | ||
Stock option exercises | 4 | 12 | ||
Cash provided by / (required for) financing activities | 1,449 | (57) | ||
Net increase / (decrease) in cash and cash equivalents | 1,989 | (383) | ||
Cash and cash equivalents at beginning of period | 2,577 | $ 1,173 | 1,556 | |
Cash and cash equivalents at end of period | 4,566 | $ 2,577 | 1,173 | |
Supplemental information | ||||
Leased assets obtained in exchange for new finance lease liabilities | 103 | 126 | ||
Leased assets obtained in exchange for new operating lease liabilities | $ 97 | $ 107 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Investment - USD ($) $ in Millions | 3 Months Ended | ||||
May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | |
Increase (Decrease) in Shareholders' Investment | |||||
Beginning balance (in shares) | 504,198,962 | 512,312,434 | |||
Beginning balance | $ 11,833 | $ 11,545 | $ 11,836 | $ 11,117 | $ 11,297 |
Net earnings | 284 | 834 | 714 | 938 | 795 |
Other comprehensive income (loss) | 14 | (95) | 9 | 10 | 13 |
Dividends declared | $ (333) | (336) | (338) | (341) | $ (330) |
Repurchase of stock (in shares) | (5,700,000) | (3,600,000) | |||
Repurchase of stock | $ (609) | (157) | (296) | 59 | $ (277) |
Accelerated share repurchase pending final settlement | (450) | (400) | |||
Stock options and awards | $ (20) | $ 42 | 70 | 53 | $ 19 |
Ending balance (in shares) | 499,919,691 | 504,198,962 | 512,312,434 | ||
Ending balance | $ 11,169 | $ 11,833 | $ 11,545 | $ 11,836 | $ 11,117 |
Common Stock | |||||
Increase (Decrease) in Shareholders' Investment | |||||
Beginning balance (in shares) | 504,200,000 | 506,700,000 | 511,300,000 | 512,300,000 | 517,800,000 |
Beginning balance | $ 42 | $ 42 | $ 43 | $ 43 | $ 43 |
Repurchase of stock (in shares) | (5,700,000) | (2,600,000) | (3,000,000) | (1,300,000) | (3,600,000) |
Repurchase of stock | $ (1) | $ 0 | |||
Accelerated share repurchase pending final settlement (in shares) | (2,500,000) | (3,000,000) | |||
Stock options and awards (in shares) | 1,400,000 | 100,000 | 900,000 | 300,000 | 1,100,000 |
Ending balance (in shares) | 499,900,000 | 504,200,000 | 506,700,000 | 511,300,000 | 512,300,000 |
Ending balance | $ 42 | $ 42 | $ 42 | $ 43 | $ 43 |
Additional Paid-in Capital | |||||
Increase (Decrease) in Shareholders' Investment | |||||
Beginning balance | 6,226 | 6,006 | 6,114 | 5,908 | 6,042 |
Repurchase of stock | 178 | 0 | 153 | ||
Accelerated share repurchase pending final settlement | (178) | (153) | |||
Stock options and awards | (20) | 42 | 70 | 53 | 19 |
Ending balance | 6,206 | 6,226 | 6,006 | 6,114 | 5,908 |
Retained Earnings | |||||
Increase (Decrease) in Shareholders' Investment | |||||
Beginning balance | 6,433 | 6,270 | 6,461 | 5,958 | 6,017 |
Net earnings | 284 | 834 | 714 | 938 | 795 |
Dividends declared | (333) | (336) | (338) | (341) | (330) |
Repurchase of stock | (609) | (335) | (295) | (94) | (277) |
Accelerated share repurchase pending final settlement | (272) | (247) | |||
Ending balance | 5,775 | 6,433 | 6,270 | 6,461 | 5,958 |
Accumulated Other Comprehensive (Loss)/Income | |||||
Increase (Decrease) in Shareholders' Investment | |||||
Beginning balance | (868) | (773) | (782) | (792) | (805) |
Other comprehensive income (loss) | 14 | (95) | 9 | 10 | 13 |
Ending balance | $ (854) | $ (868) | $ (773) | $ (782) | $ (792) |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Investment (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | |
May 02, 2020 | May 04, 2019 | Feb. 01, 2020 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared per share (in dollars per share) | $ 0.66 | $ 0.64 | $ 2.62 |
Accounting Policies
Accounting Policies | 3 Months Ended |
May 02, 2020 | |
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 2019 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. |
Impact of Coronavirus (COVID-19
Impact of Coronavirus (COVID-19) | 3 Months Ended |
May 02, 2020 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Impact of Coronavirus (COVID-19) | Impact of Coronavirus (COVID-19) On March 11, 2020 the World Health Organization declared the novel coronavirus disease (COVID-19) a pandemic, and on March 13, 2020 the United States declared a national emergency. 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. To date all of our stores, digital channels, and distribution centers remain open. Throughout the quarter, guest shopping patterns changed significantly in reaction to the COVID-19 pandemic. Across our core merchandise categories, sales have grown significantly in Beauty and Household Essentials, Food and Beverage, Hardlines, and Home Furnishings and Décor, while declining significantly in Apparel and Accessories. Note 3 provides sales by category. In response to these changes, we have taken many 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 quarter ended May 2, 2020, we recorded $216 million of purchase order cancellation fees in Cost of Sales. From March 26, 2020, to April 26, 2020, we did not accept in-store merchandise returns and exchanges to protect our team members. We lengthened the return period for merchandise affected by this change. We continue to recognize sales net of expected returns. Our returns estimate for sales during the suspension period includes significant assumptions that, if actual results are substantially different, could result in material adjustments in future periods. |
Revenues
Revenues | 3 Months Ended |
May 02, 2020 | |
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 (millions) May 2, May 4, Apparel and accessories (a) $ 2,619 $ 3,290 Beauty and household essentials (b) 5,911 4,971 Food and beverage (c) 4,575 3,722 Hardlines (d) 2,974 2,385 Home furnishings and décor (e) 3,264 3,001 Other 28 32 Sales 19,371 17,401 Credit card profit sharing 166 160 Other 78 66 Other revenue 244 226 Total revenue $ 19,615 $ 17,627 (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/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. As of May 2, 2020, February 1, 2020, and May 4, 2019, the accrual for estimated returns was $398 million, $117 million, and $124 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. Gift Card Liability Activity February 1, Gift Cards Issued During Current Period But Not Redeemed (b) Revenue Recognized From Beginning Liability May 2, (millions) Gift card liability (a) $ 935 $ 180 $ (335) $ 780 (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. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
May 02, 2020 | |
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 May 2, February 1, May 4, Assets Short-term investments Cash and Cash Equivalents Level 1 $ 3,605 $ 1,810 $ 419 Prepaid forward contracts Other Current Assets Level 1 23 23 21 Equity securities (a) Other Current Assets Level 1 18 39 80 Interest rate swaps Other Noncurrent Assets Level 2 228 137 23 Liabilities Interest rate swaps Other Current Liabilities Level 2 — — 1 Interest rate swaps Other Noncurrent Liabilities Level 2 10 — — (a) Represents our investment in Casper Sleep Inc. common stock . Significant Financial Instruments Not Measured at Fair Value (a) (millions) May 2, 2020 February 1, 2020 May 4, 2019 Carrying Fair Carrying Fair Carrying Fair Long-term debt, including current portion (b) $ 12,474 $ 14,781 $ 9,992 $ 11,864 $ 11,243 $ 12,015 (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 | 3 Months Ended |
May 02, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and EquipmentWe 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 $35 million and $4 million during the three months ended May 2, 2020, and May 4, 2019, respectively. The impairment charges are recorded in Selling, General and Administrative Expenses (SG&A). |
Commercial Paper and Long-Term
Commercial Paper and Long-Term Debt | 3 Months Ended |
May 02, 2020 | |
Debt Disclosure [Abstract] | |
Commercial Paper and Long-Term Debt | Commercial Paper and Long-Term Debt In March 2020, we issued unsecured fixed rate debt of $1.5 billion at 2.250 percent that matures in April 2025 and $1.0 billion at 2.650 percent that matures in September 2030. We obtain short-term financing from time to time under our commercial paper program. No balances were outstanding at any time during the three months ended May 2, 2020. For the three months ended May 4, 2019, the maximum amount outstanding was $744 million, and the average daily amount outstanding was $140 million at a weighted average annual interest rate of 2.4 percent, with no balance outstanding as of May 4, 2019. In April 2020, we obtained a committed $900 million 364-day unsecured revolving credit facility that expires in April 2021. This new facility is in addition to our $2.5 billion unsecured revolving credit facility that expires in October 2023. No balances were outstanding under either credit facility at any time during 2020 or 2019. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
May 02, 2020 | |
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 4 to the Consolidated Financial Statements provides the fair value and classification of these instruments. As of May 2, 2020, and May 4, 2019, we were party to interest rate swaps with notional amounts totaling $1.5 billion and$2.5 billion, respectively. 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 months ended May 2, 2020, and May 4, 2019. As of May 2, 2020, we were party to forward-starting interest rate swaps with notional amounts totaling $250 million 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 May 2, 2020, a $10 million loss was recorded in Accumulated Other Comprehensive Loss and will be reclassified to Net Interest Expense when the forecasted transaction affects earnings. Effect of Hedges on Debt (millions) May 2, February 1, May 4, Current portion of long-term debt and other borrowings Carrying amount of hedged debt $ — $ — $ 999 Cumulative hedging adjustments, included in carrying amount — — (1) Long-term debt and other borrowings Carrying amount of hedged debt 1,721 1,630 1,515 Cumulative hedging adjustments, included in carrying amount 228 137 23 Effect of Hedges on Net Interest Expense Three Months Ended (millions) May 2, May 4, Gain (loss) on fair value hedges recognized in Net Interest Expense Interest rate swap designated as fair value hedges $ 91 $ 15 Hedged debt (91) (15) Total $ — $ — |
Income Taxes
Income Taxes | 3 Months Ended |
May 02, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended May 2, 2020 , our effective tax rate was 13.9 percent compared with 22.4 percent for the three months ended May 4, 2019 |
Share Repurchase
Share Repurchase | 3 Months Ended |
May 02, 2020 | |
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. Share Repurchase Activity Three Months Ended (millions, except per share data) May 2, May 4, Number of shares purchased 5.7 3.6 Average price paid per share $ 107.58 $ 76.98 Total investment $ 609 $ 277 Note: This table excludes activity related to the first quarter 2019 ASR arrangement described below because final settlement had not occurred as of May 4, 2019. During the first quarter of 2019, we entered into an ASR arrangement to repurchase $275 to $400 million of our common stock. Under the agreement, we paid $400 million and received an initial delivery of 3.0 million shares, which were retired, resulting in a $247 million reduction to Retained Earnings. As of May 4, 2019, $153 million was included as a reduction to Additional Paid-in Capital. Upon final settlement in the second quarter of 2019, we received an additional 1.2 million shares, which were retired, and $60 million for the remaining amount not settled in shares. In total, we repurchased 4.2 million shares under the ASR arrangement for a total cash investment of $340 million ($80.21 per share). In March 2020, we suspended share repurchase activity. |
Pension Benefits
Pension Benefits | 3 Months Ended |
May 02, 2020 | |
Retirement Benefits [Abstract] | |
Pension Benefits | Pension Benefits We provide pension plan benefits to eligible team members. Net Pension Benefits Expense Three Months Ended (millions) Classification May 2, May 4, Service cost benefits earned SG&A Expenses $ 26 $ 23 Interest cost on projected benefit obligation Net Other (Income) / Expense 30 37 Expected return on assets Net Other (Income) / Expense (61) (62) Amortization of losses Net Other (Income) / Expense 32 16 Amortization of prior service cost Net Other (Income) / Expense (3) (3) Total $ 24 $ 11 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
May 02, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Change in Accumulated Other Comprehensive Loss Cash Flow Currency Translation Adjustment Pension Total (millions) February 1, 2020 $ (12) $ (19) $ (837) $ (868) Other comprehensive income before reclassifications, net of tax (7) (1) — (8) Amounts reclassified from AOCI, net of tax — — 22 22 May 2, 2020 $ (19) $ (20) $ (815) $ (854) |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
May 02, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue | Revenues Three Months Ended (millions) May 2, May 4, Apparel and accessories (a) $ 2,619 $ 3,290 Beauty and household essentials (b) 5,911 4,971 Food and beverage (c) 4,575 3,722 Hardlines (d) 2,974 2,385 Home furnishings and décor (e) 3,264 3,001 Other 28 32 Sales 19,371 17,401 Credit card profit sharing 166 160 Other 78 66 Other revenue 244 226 Total revenue $ 19,615 $ 17,627 (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/office supplies, greeting cards and party supplies, and other seasonal merchandise. |
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. Gift Card Liability Activity February 1, Gift Cards Issued During Current Period But Not Redeemed (b) Revenue Recognized From Beginning Liability May 2, (millions) Gift card liability (a) $ 935 $ 180 $ (335) $ 780 (a) Included in Accrued and Other Current Liabilities. (b) Net of estimated breakage. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
May 02, 2020 | |
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 May 2, February 1, May 4, Assets Short-term investments Cash and Cash Equivalents Level 1 $ 3,605 $ 1,810 $ 419 Prepaid forward contracts Other Current Assets Level 1 23 23 21 Equity securities (a) Other Current Assets Level 1 18 39 80 Interest rate swaps Other Noncurrent Assets Level 2 228 137 23 Liabilities Interest rate swaps Other Current Liabilities Level 2 — — 1 Interest rate swaps Other Noncurrent Liabilities Level 2 10 — — (a) Represents our investment in Casper Sleep Inc. common stock . |
Significant Financial Instruments Not Measured at Fair Value | Significant Financial Instruments Not Measured at Fair Value (a) (millions) May 2, 2020 February 1, 2020 May 4, 2019 Carrying Fair Carrying Fair Carrying Fair Long-term debt, including current portion (b) $ 12,474 $ 14,781 $ 9,992 $ 11,864 $ 11,243 $ 12,015 (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) | 3 Months Ended |
May 02, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivatives | Effect of Hedges on Debt (millions) May 2, February 1, May 4, Current portion of long-term debt and other borrowings Carrying amount of hedged debt $ — $ — $ 999 Cumulative hedging adjustments, included in carrying amount — — (1) Long-term debt and other borrowings Carrying amount of hedged debt 1,721 1,630 1,515 Cumulative hedging adjustments, included in carrying amount 228 137 23 Effect of Hedges on Net Interest Expense Three Months Ended (millions) May 2, May 4, Gain (loss) on fair value hedges recognized in Net Interest Expense Interest rate swap designated as fair value hedges $ 91 $ 15 Hedged debt (91) (15) Total $ — $ — |
Share Repurchase (Tables)
Share Repurchase (Tables) | 3 Months Ended |
May 02, 2020 | |
Equity [Abstract] | |
Schedule of Share Repurchase (excluding ASR) | Share Repurchase Activity Three Months Ended (millions, except per share data) May 2, May 4, Number of shares purchased 5.7 3.6 Average price paid per share $ 107.58 $ 76.98 Total investment $ 609 $ 277 Note: This table excludes activity related to the first quarter 2019 ASR arrangement described below because final settlement had not occurred as of May 4, 2019. |
Pension Benefits (Tables)
Pension Benefits (Tables) | 3 Months Ended |
May 02, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of Pension Plan Benefits | Net Pension Benefits Expense Three Months Ended (millions) Classification May 2, May 4, Service cost benefits earned SG&A Expenses $ 26 $ 23 Interest cost on projected benefit obligation Net Other (Income) / Expense 30 37 Expected return on assets Net Other (Income) / Expense (61) (62) Amortization of losses Net Other (Income) / Expense 32 16 Amortization of prior service cost Net Other (Income) / Expense (3) (3) Total $ 24 $ 11 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
May 02, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Summary of the Changes in Accumulated Other Comprehensive Loss | Change in Accumulated Other Comprehensive Loss Cash Flow Currency Translation Adjustment Pension Total (millions) February 1, 2020 $ (12) $ (19) $ (837) $ (868) Other comprehensive income before reclassifications, net of tax (7) (1) — (8) Amounts reclassified from AOCI, net of tax — — 22 22 May 2, 2020 $ (19) $ (20) $ (815) $ (854) |
Impact of Coronavirus (COVID-_2
Impact of Coronavirus (COVID-19) (Details) $ in Millions | 3 Months Ended |
May 02, 2020USD ($) | |
Cost of Sales | Coronavirus (COVID-19) | |
Unusual or Infrequent Item, or Both [Line Items] | |
Purchase order cancellation fees | $ 216 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 19,615 | $ 17,627 |
Apparel and accessories | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,619 | 3,290 |
Beauty and household essentials | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 5,911 | 4,971 |
Food and beverage | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 4,575 | 3,722 |
Hardlines | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,974 | 2,385 |
Home furnishings and decor | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 3,264 | 3,001 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 28 | 32 |
Sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 19,371 | 17,401 |
Credit card profit sharing | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 166 | 160 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 78 | 66 |
Other revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 244 | $ 226 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Millions | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 |
Revenue from Contract with Customer [Abstract] | |||
Reserve | $ 398 | $ 117 | $ 124 |
Revenues - Gift Card Liability
Revenues - Gift Card Liability (Details) $ in Millions | 3 Months Ended |
May 02, 2020USD ($) | |
Change in Contract with Customer, Liability [Roll Forward] | |
Beginning balance | $ 935 |
Gift Cards Issued During Current Period But Not Redeemed | 180 |
Revenue Recognized From Beginning Liability | (335) |
Ending balance | $ 780 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurements - Recurring Basis (Details) - USD ($) $ in Millions | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 |
Assets | |||
Prepaid forward contracts classified as Other Current Assets | $ 1,465 | $ 1,333 | $ 1,374 |
Interest rate swaps classified as Other Noncurrent Assets | 1,367 | 1,358 | 1,287 |
Liabilities | |||
Interest rate swaps classified as Other Noncurrent Liabilities | 1,781 | 1,724 | 1,808 |
Fair value measured on recurring basis | Level 1 | Casper Sleep Inc. | |||
Assets | |||
Equity securities classified as Other Current Assets | 18 | 39 | 80 |
Fair value measured on recurring basis | Level 1 | Prepaid forward contracts | |||
Assets | |||
Prepaid forward contracts classified as Other Current Assets | 23 | 23 | 21 |
Fair value measured on recurring basis | Level 1 | Short-term investments | |||
Assets | |||
Short-term investments classified as Cash and Cash Equivalents | 3,605 | 1,810 | 419 |
Fair value measured on recurring basis | Level 2 | Interest rate swaps | |||
Assets | |||
Interest rate swaps classified as Other Noncurrent Assets | 228 | 137 | 23 |
Liabilities | |||
Interest rate swaps classified as Other Current Liabilities | 0 | 0 | 1 |
Interest rate swaps classified as Other Noncurrent Liabilities | $ 10 | $ 0 | $ 0 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Significant Financial Instruments not Measured at Fair Value (Details) - USD ($) $ in Millions | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 |
Carrying Amount | |||
Financial Instruments, Balance Sheet Groupings | |||
Long-term debt, including current portion | $ 12,474 | $ 9,992 | $ 11,243 |
Fair Value | |||
Financial Instruments, Balance Sheet Groupings | |||
Long-term debt, including current portion | $ 14,781 | $ 11,864 | $ 12,015 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Millions | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Impairment charges | $ 35 | $ 4 |
Commercial Paper and Long-Ter_2
Commercial Paper and Long-Term Debt (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Apr. 30, 2020 | May 02, 2020 | May 04, 2019 | Feb. 01, 2020 | Mar. 31, 2020 | |
Commercial Paper | |||||
Debt Instrument [Line Items] | |||||
Maximum amount outstanding during period | $ 744,000,000 | ||||
Average daily amount outstanding | $ 0 | $ 140,000,000 | |||
Weighted average interest rate | 2.40% | ||||
Amount outstanding | $ 0 | ||||
Unsecured Fixed Rate 2.250 Percent Debt, Maturing 2025 | Unsecured Debt | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 1,500,000,000 | ||||
Interest rate | 2.25% | ||||
Unsecured Fixed Rate 2.650 Percent Debt, Maturing 2030 | Unsecured Debt | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 1,000,000,000 | ||||
Interest rate | 2.65% | ||||
Credit Facility Expiring April 2021 | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Term of debt | 364 days | ||||
Line of credit facility, borrowing capacity | $ 900,000,000 | ||||
Line of credit facility, outstanding balance | 0 | $ 0 | |||
Credit Facility Expiring 2023 | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, borrowing capacity | 2,500,000,000 | ||||
Line of credit facility, outstanding balance | $ 0 | $ 0 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Narrative (Details) - Designated as Hedging Instrument - USD ($) | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Interest Rate Swaps | ||
Derivative Contracts - Effect on Results of Operations (millions) | ||
Notional amount | $ 1,500,000,000 | $ 2,500,000,000 |
Forward-Starting Interest Rate Swap | ||
Derivative Contracts - Effect on Results of Operations (millions) | ||
Notional amount | 250,000,000 | |
Loss to be reclassified | $ 10,000,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Effect of Hedges on Debt (Details) - USD ($) $ in Millions | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 |
Current portion of long-term debt and other borrowings | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Carrying amount of hedged debt | $ 0 | $ 0 | $ 999 |
Cumulative hedging adjustments, included in carrying amount | 0 | 0 | (1) |
Long-term debt and other borrowings | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Carrying amount of hedged debt | 1,721 | 1,630 | 1,515 |
Cumulative hedging adjustments, included in carrying amount | $ 228 | $ 137 | $ 23 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Effect of Hedges on Net Interest Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Interest rate swap designated as fair value hedges | $ 91 | $ 15 |
Hedged debt | (91) | (15) |
Total | $ 0 | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 13.90% | 22.40% |
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 | ||||
May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | |
Equity [Abstract] | |||||
Number of shares purchased (in shares) | 5.7 | 3.6 | |||
Average price paid per share (in dollars per share) | $ 107.58 | $ 76.98 | |||
Total investment | $ 609 | $ 157 | $ 296 | $ (59) | $ 277 |
Share Repurchase - Narrative (D
Share Repurchase - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Aug. 03, 2019 | |
Equity, Class of Treasury Stock [Line Items] | ||||||
Number of shares purchased (in shares) | 5.7 | 3.6 | ||||
Stock repurchased and retired | $ 609 | $ 157 | $ 296 | $ (59) | $ 277 | |
Share Repurchase Program 2019 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Authorized shares for accelerated stock repurchase, low end | 275 | |||||
Authorized shares for accelerated stock repurchase, high end | 400 | |||||
Settlement (payment) of purchase agreement | $ 60 | $ 400 | $ 60 | |||
Number of shares purchased (in shares) | 1.2 | 3 | ||||
Shares receivable | $ 153 | |||||
Stock repurchased (in shares) | 4.2 | |||||
Prepaid repurchase amount | $ 340 | |||||
Price paid per share (in dollars per share) | $ 80.21 | |||||
Retained Earnings | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchased and retired | $ 609 | $ 335 | $ 295 | $ 94 | 277 | |
Retained Earnings | Share Repurchase Program 2019 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchased and retired | $ 247 |
Pension Benefits (Details)
Pension Benefits (Details) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Net Pension Benefits Expense | ||
Service cost benefits earned | $ 26 | $ 23 |
Interest cost on projected benefit obligation | 30 | 37 |
Expected return on assets | (61) | (62) |
Amortization of losses | 32 | 16 |
Amortization of prior service cost | (3) | (3) |
Total | $ 24 | $ 11 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) $ in Millions | 3 Months Ended |
May 02, 2020USD ($) | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | $ 11,833 |
Other comprehensive income before reclassifications, net of tax | (8) |
Amounts reclassified from AOCI, net of tax | 22 |
Ending balance | 11,169 |
Cash Flow Hedges | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | (12) |
Other comprehensive income before reclassifications, net of tax | (7) |
Amounts reclassified from AOCI, net of tax | 0 |
Ending balance | (19) |
Currency Translation Adjustment | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | (19) |
Other comprehensive income before reclassifications, net of tax | (1) |
Amounts reclassified from AOCI, net of tax | 0 |
Ending balance | (20) |
Pension | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | (837) |
Other comprehensive income before reclassifications, net of tax | 0 |
Amounts reclassified from AOCI, net of tax | 22 |
Ending balance | (815) |
Total | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | (868) |
Ending balance | $ (854) |