

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 ~~April~~July 29, 2023

☐ 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)

612-304-6073

(Registrant’s telephone number, including area code)

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

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, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" 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 ☒

Total shares of common stock, par value $0.0833, outstanding at ~~May 19,~~August 18, 2023, were ~~461,559,612.~~461,605,464.


						Table of Contents
						Index to Notes

TARGET CORPORATION

TABLE OF CONTENTS


PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Consolidated Statements of Operations	1
	Consolidated Statements of Comprehensive Income	2
	Consolidated Statements of Financial Position	3
	Consolidated Statements of Cash Flows	4
	Consolidated Statements of Shareholders’ Investment	5
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1314
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2223
Item 4.	Controls and Procedures	2223

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	2324
Item 1A.	Risk Factors	2324
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2324
Item 3.	Defaults Upon Senior Securities	2324
Item 4.	Mine Safety Disclosures	2324
Item 5.	Other Information	2324
Item 6.	Exhibits	2425

Signatures		2526


			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				Three Months Ended				Six Months Ended
(millions, except per share data) (unaudited)	(millions, except per share data) (unaudited)	April 29, 2023		April 30, 2022			(millions, except per share data) (unaudited)	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Sales	Sales	$	24,948	$	24,830		Sales	$	24,384	$	25,653	$	49,332	$	50,483
Other revenue	Other revenue	374		340			Other revenue	389		384		763		724
Total revenue	Total revenue	25,322		25,170			Total revenue	24,773		26,037		50,095		51,207
Cost of sales	Cost of sales	18,386		18,461			Cost of sales	17,798		20,142		36,184		38,603
Selling, general and administrative expenses	Selling, general and administrative expenses	5,025		4,762			Selling, general and administrative expenses	5,184		5,002		10,209		9,764
Depreciation and amortization (exclusive of depreciation included in cost of sales)	Depreciation and amortization (exclusive of depreciation included in cost of sales)	583		601			Depreciation and amortization (exclusive of depreciation included in cost of sales)	594		572		1,177		1,173
Operating income	Operating income	1,328		1,346			Operating income	1,197		321		2,525		1,667
Net interest expense	Net interest expense	147		112			Net interest expense	141		112		288		224
Net other income	Net other income	(23)		(15)			Net other income	(16)		(8)		(39)		(23)
Earnings before income taxes	Earnings before income taxes	1,204		1,249			Earnings before income taxes	1,072		217		2,276		1,466
Provision for income taxes	Provision for income taxes	254		240			Provision for income taxes	237		34		491		274

Net earnings	Net earnings	$	950	$	1,009		Net earnings	$	835	$	183	$	1,785	$	1,192

Basic earnings per share	Basic earnings per share	$	2.06	$	2.17		Basic earnings per share	$	1.81	$	0.40	$	3.87	$	2.57

Diluted earnings per share	Diluted earnings per share	$	2.05	$	2.16		Diluted earnings per share	$	1.80	$	0.39	$	3.86	$	2.55
Weighted average common shares outstanding	Weighted average common shares outstanding						Weighted average common shares outstanding
Basic	Basic	460.9		464.0			Basic	461.6		461.5		461.3		463.8
Diluted	Diluted	462.9		467.8			Diluted	462.5		463.6		462.7		466.8
Antidilutive shares	Antidilutive shares	1.2		—			Antidilutive shares	2.9		1.3		2.4		1.0

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q1Q2 2023 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					Three Months Ended				Six Months Ended
(millions) (unaudited)	(millions) (unaudited)	April 29, 2023		April 30, 2022				(millions) (unaudited)	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Net earnings	Net earnings	$	950	$	1,009			Net earnings	$	835	$	183	$	1,785	$	1,192
Other comprehensive income, net of tax	Other comprehensive income, net of tax							Other comprehensive income, net of tax
Pension benefit liabilities	Pension benefit liabilities	2		11				Pension benefit liabilities	1		11		3		22
Cash flow hedges and currency translation adjustment	Cash flow hedges and currency translation adjustment	(5)		190				Cash flow hedges and currency translation adjustment	(4)		(28)		(9)		162
Other comprehensive income		(3)		201
Other comprehensive income (loss)								Other comprehensive income (loss)	(3)		(17)		(6)		184
Comprehensive income	Comprehensive income	$	947	$	1,210			Comprehensive income	$	832	$	166	$	1,779	$	1,376

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q1Q2 2023 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)	April 29, 2023		January 28, 2023		April 30, 2022		(millions, except footnotes) (unaudited)	July 29, 2023		January 28, 2023		July 30, 2022
Assets	Assets							Assets
Cash and cash equivalents	Cash and cash equivalents	$	1,321	$	2,229	$	1,112	Cash and cash equivalents	$	1,617	$	2,229	$	1,117
Inventory	Inventory	12,616		13,499		15,083		Inventory	12,684		13,499		15,320
Other current assets	Other current assets	1,836		2,118		1,758		Other current assets	1,797		2,118		2,016
Total current assets	Total current assets	15,773		17,846		17,953		Total current assets	16,098		17,846		18,453
Property and equipment	Property and equipment							Property and equipment
Land	Land	6,493		6,231		6,164		Land	6,504		6,231		6,161
Buildings and improvements	Buildings and improvements	35,198		34,746		33,300		Buildings and improvements	35,889		34,746		33,694
Fixtures and equipment	Fixtures and equipment	7,473		7,439		6,459		Fixtures and equipment	7,936		7,439		6,744
Computer hardware and software	Computer hardware and software	3,067		3,039		2,588		Computer hardware and software	3,178		3,039		2,684
Construction-in-progress	Construction-in-progress	2,822		2,688		1,444		Construction-in-progress	2,641		2,688		2,245
Accumulated depreciation	Accumulated depreciation	(22,657)		(22,631)		(21,285)		Accumulated depreciation	(23,201)		(22,631)		(21,708)
Property and equipment, net	Property and equipment, net	32,396		31,512		28,670		Property and equipment, net	32,947		31,512		29,820
Operating lease assets	Operating lease assets	2,640		2,657		2,571		Operating lease assets	2,840		2,657		2,542
Other noncurrent assets	Other noncurrent assets	1,341		1,320		1,648		Other noncurrent assets	1,321		1,320		1,655
Total assets	Total assets	$	52,150	$	53,335	$	50,842	Total assets	$	53,206	$	53,335	$	52,470
Liabilities and shareholders’ investment	Liabilities and shareholders’ investment							Liabilities and shareholders’ investment
Accounts payable	Accounts payable	$	11,935	$	13,487	$	14,053	Accounts payable	$	12,278	$	13,487	$	14,891
Accrued and other current liabilities	Accrued and other current liabilities	5,732		5,883		5,582		Accrued and other current liabilities	5,948		5,883		5,905
Current portion of long-term debt and other borrowings	Current portion of long-term debt and other borrowings	200		130		1,089		Current portion of long-term debt and other borrowings	1,106		130		1,649
Total current liabilities	Total current liabilities	17,867		19,500		20,724		Total current liabilities	19,332		19,500		22,445
Long-term debt and other borrowings	Long-term debt and other borrowings	16,010		16,009		13,379		Long-term debt and other borrowings	14,926		16,009		13,453
Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	2,621		2,638		2,581		Noncurrent operating lease liabilities	2,798		2,638		2,543
Deferred income taxes	Deferred income taxes	2,289		2,196		1,752		Deferred income taxes	2,334		2,196		1,862
Other noncurrent liabilities	Other noncurrent liabilities	1,758		1,760		1,632		Other noncurrent liabilities	1,826		1,760		1,575
Total noncurrent liabilities	Total noncurrent liabilities	22,678		22,603		19,344		Total noncurrent liabilities	21,884		22,603		19,433
Shareholders’ investment	Shareholders’ investment							Shareholders’ investment
Common stock	Common stock	38		38		39		Common stock	38		38		38
Additional paid-in capital	Additional paid-in capital	6,541		6,608		5,592		Additional paid-in capital	6,610		6,608		6,502
Retained earnings	Retained earnings	5,448		5,005		5,495		Retained earnings	5,767		5,005		4,421
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(422)		(419)		(352)		Accumulated other comprehensive loss	(425)		(419)		(369)
Total shareholders’ investment	Total shareholders’ investment	11,605		11,232		10,774		Total shareholders’ investment	11,990		11,232		10,592
Total liabilities and shareholders’ investment	Total liabilities and shareholders’ investment	$	52,150	$	53,335	$	50,842	Total liabilities and shareholders’ investment	$	53,206	$	53,335	$	52,470

Common Stock Authorized 6,000,000,000 shares, $0.0833 par value; ~~461,552,843,~~461,600,640, 460,346,947, and ~~463,683,711~~460,236,393 shares issued and outstanding as of ~~April~~July 29, 2023, January 28, 2023, and ~~April~~July 30, 2022, respectively.

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

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q1Q2 2023 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
		Three Months Ended					Six Months Ended
(millions) (unaudited)	(millions) (unaudited)	April 29, 2023		April 30, 2022		(millions) (unaudited)	July 29, 2023		July 30, 2022
Operating activities	Operating activities					Operating activities
Net earnings	Net earnings	$	950	$	1,009	Net earnings	$	1,785	$	1,192

Adjustments to reconcile net earnings to cash provided by operating activities:	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	667		679		Depreciation and amortization	1,350		1,329
Share-based compensation expense	Share-based compensation expense	43		83		Share-based compensation expense	107		122
Deferred income taxes	Deferred income taxes	95		115		Deferred income taxes	141		227

Noncash losses / (gains) and other, net	Noncash losses / (gains) and other, net	(11)		52		Noncash losses / (gains) and other, net	11		108
Changes in operating accounts:	Changes in operating accounts:					Changes in operating accounts:
Inventory	Inventory	883		(1,181)		Inventory	815		(1,418)
Other assets	Other assets	34		(86)		Other assets	62		(179)
Accounts payable	Accounts payable	(1,463)		(1,560)		Accounts payable	(1,137)		(784)
Accrued and other liabilities	Accrued and other liabilities	67		(505)		Accrued and other liabilities	264		(644)

Cash provided by (required for) operating activities	Cash provided by (required for) operating activities	1,265		(1,394)		Cash provided by (required for) operating activities	3,398		(47)
Investing activities	Investing activities					Investing activities
Expenditures for property and equipment	Expenditures for property and equipment	(1,605)		(952)		Expenditures for property and equipment	(2,825)		(2,523)
Proceeds from disposal of property and equipment	Proceeds from disposal of property and equipment	2		2		Proceeds from disposal of property and equipment	6		4
Other investments	Other investments	1		2		Other investments	(2)		1
Cash required for investing activities	Cash required for investing activities	(1,602)		(948)		Cash required for investing activities	(2,821)		(2,518)
Financing activities	Financing activities					Financing activities
Change in commercial paper, net	Change in commercial paper, net	90		945		Change in commercial paper, net	—		1,545

Reductions of long-term debt	Reductions of long-term debt	(46)		(48)		Reductions of long-term debt	(72)		(113)
Dividends paid	Dividends paid	(497)		(424)		Dividends paid	(996)		(842)
Repurchase of stock	Repurchase of stock	—		(10)		Repurchase of stock	—		(2,646)
Accelerated share repurchase pending final settlement		—		(2,750)

Shares withheld for taxes on share-based compensation	Shares withheld for taxes on share-based compensation	(118)		(171)		Shares withheld for taxes on share-based compensation	(121)		(175)
Stock option exercises	Stock option exercises	—		1		Stock option exercises	—		2
Cash required for financing activities	Cash required for financing activities	(571)		(2,457)		Cash required for financing activities	(1,189)		(2,229)
Net decrease in cash and cash equivalents	Net decrease in cash and cash equivalents	(908)		(4,799)		Net decrease in cash and cash equivalents	(612)		(4,794)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	2,229		5,911		Cash and cash equivalents at beginning of period	2,229		5,911
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	1,321	$	1,112	Cash and cash equivalents at end of period	$	1,617	$	1,117
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	$	15	$	62	Leased assets obtained in exchange for new finance lease liabilities	$	20	$	107
Leased assets obtained in exchange for new operating lease liabilities	Leased assets obtained in exchange for new operating lease liabilities	54		59		Leased assets obtained in exchange for new operating lease liabilities	337		97

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			4


			FINANCIAL STATEMENTS			Table of Contents
						Index to Notes


Consolidated Statements of Shareholders’ Investment
	Common	Stock		Additional				Accumulated Other
	Stock	Par		Paid-in		Retained		Comprehensive
(millions) (unaudited)	Shares	Value		Capital		Earnings		(Loss) / Income		Total
January 29, 2022	471.3	$	39	$	6,421	$	6,920	$	(553)	$	12,827
Net earnings	—	—		—		1,009		—		1,009
Other comprehensive income	—	—		—		—		201		201
Dividends declared	—	—		—		(426)		—		(426)
Repurchase of stock	(0.1)	—		—		(10)		—		(10)
Accelerated share repurchase pending final settlement	(8.9)	(1)		(751)		(1,998)		—		(2,750)
Stock options and awards	1.4	1		(78)		—		—		(77)
April 30, 2022	463.7	$	39	$	5,592	$	5,495	$	(352)	$	10,774
Net earnings	—	—		—		183		—		183
Other comprehensive loss	—	—		—		—		(17)		(17)
Dividends declared	—	—		—		(502)		—		(502)
Repurchase of stock	(3.6)	(1)		870		(755)		—		114
Stock options and awards	0.1	—		40		—		—		40
July 30, 2022	460.2	$	38	$	6,502	$	4,421	$	(369)	$	10,592
Net earnings	—	—		—		712		—		712
Other comprehensive income	—	—		—		—		161		161
Dividends declared	—	—		—		(502)		—		(502)


Stock options and awards	0.1	—		56		—		—		56
October 29, 2022	460.3	$	38	$	6,558	$	4,631	$	(208)	$	11,019
Net earnings	—	—		—		876		—		876
Other comprehensive loss	—	—		—		—		(211)		(211)
Dividends declared	—	—		—		(502)		—		(502)

Stock options and awards	—	—		50		—		—		50
January 28, 2023	460.3	$	38	$	6,608	$	5,005	$	(419)	$	11,232


TARGET CORPORATION						Q1Q2 2023 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
January 28, 2023	January 28, 2023	460.3	$	38	$	6,608	$	5,005	$	(419)	$	11,232	January 28, 2023	460.3	$	38	$	6,608	$	5,005	$	(419)	$	11,232
Net earnings	Net earnings	—	—		—		950		—		950		Net earnings	—	—		—		950		—		950
Other comprehensive loss	Other comprehensive loss	—	—		—		—		(3)		(3)		Other comprehensive loss	—	—		—		—		(3)		(3)
Dividends declared	Dividends declared	—	—		—		(507)		—		(507)		Dividends declared	—	—		—		(507)		—		(507)

Stock options and awards	Stock options and awards	1.3	—		(67)		—		—		(67)		Stock options and awards	1.3	—		(67)		—		—		(67)
April 29, 2023	April 29, 2023	461.6	$	38	$	6,541	$	5,448	$	(422)	$	11,605	April 29, 2023	461.6	$	38	$	6,541	$	5,448	$	(422)	$	11,605
Net earnings													Net earnings	—	—		—		835		—		835
Other comprehensive loss													Other comprehensive loss	—	—		—		—		(3)		(3)
Dividends declared													Dividends declared	—	—		—		(516)		—		(516)

Stock options and awards													Stock options and awards	—	—		69		—		—		69
July 29, 2023													July 29, 2023	461.6	$	38	$	6,610	$	5,767	$	(425)	$	11,990

We declared ~~$1.08~~$1.10 and ~~$0.90~~$1.08 dividends per share for the three months ended ~~April~~July 29, 2023 and ~~April~~July 30, 2022, respectively, and $4.14 per share for the fiscal year ended January 28, 2023.

See accompanying Notes to Consolidated Financial Statements.


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			6


			FINANCIAL STATEMENTS			Table of Contents
			INDEX			Index to Notes


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			7


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

Notes to Consolidated Financial Statements (unaudited)

1. Accounting Policies

These unaudited condensed consolidated financial statements are prepared in accordance with the rules and regulations of the Securities and Exchange Commission applicable to interim financial statements. While these statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by United States 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 most recent Form 10-K.

We use the same accounting policies in preparing quarterly and annual financial statements.

We operate as a single segment that 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.


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			8


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

2. Revenue

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).


Revenue	Revenue	Three Months Ended				Revenue	Three Months Ended				Six Months Ended
(millions)	(millions)	April 29, 2023		April 30, 2022				(millions)	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Apparel & accessories (a)	Apparel & accessories (a)	$	3,967	$	4,239			Apparel & accessories (a)	$	4,101	$	4,617	$	8,068	$	8,856
Beauty & household essentials (b)	Beauty & household essentials (b)	7,682		7,053				Beauty & household essentials (b)	7,513		7,208		15,195		14,261
Food & beverage (c)	Food & beverage (c)	5,997		5,505				Food & beverage (c)	5,392		5,268		11,389		10,773
Hardlines (d)	Hardlines (d)	3,391		3,713				Hardlines (d)	3,383		3,866		6,774		7,579
Home furnishings & décor (e)	Home furnishings & décor (e)	3,855		4,271				Home furnishings & décor (e)	3,955		4,647		7,810		8,918
Other	Other	56		49				Other	40		47		96		96
Sales	Sales	24,948		24,830				Sales	24,384		25,653		49,332		50,483

Credit card profit sharing	Credit card profit sharing	174		185				Credit card profit sharing	169		181		343		366
Other	Other	200		155				Other	220		203		420		358
Other revenue	Other revenue	374		340				Other revenue	389		384		763		724

Total revenue	Total revenue	$	25,322	$	25,170			Total revenue	$	24,773	$	26,037	$	50,095	$	51,207

(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 ~~April~~July 29, 2023, January 28, 2023, and ~~April~~July 30, 2022, the accrual for estimated returns was ~~$206~~$177 million, $174 million, and ~~$204~~$175 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	January 28, 2023		Gift Cards Issued During Current Period But Not Redeemed (b)			Revenue Recognized From Beginning Liability			April 29, 2023	Gift Card Liability Activity	January 28, 2023			Gift Cards Issued During Current Period But Not Redeemed (b)			Revenue Recognized From Beginning Liability			July 29, 2023
(millions)	(millions)							(millions)
Gift card liability (a)	Gift card liability (a)	$	1,240		$	268		$	(481)				$	1,027	Gift card liability (a)	$	1,240		$	399		$	(679)	$	960

(a)Included in Accrued and Other Current Liabilities.

(b)Net of estimated breakage.


TARGET CORPORATION						Q2 2023 Form 10-Q			9


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

Other Revenue

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~~						~~Q1 2023 Form 10-Q~~			9


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

Other — Includes advertising revenue, Shipt membership and service revenues, commissions earned on third-party sales through Target.com, rental income, and other miscellaneous revenues.

3. Fair Value Measurements

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

Financial Instruments Measured On a Recurring Basis

Fair Value

Financial Instruments Measured On a Recurring Basis

Fair Value

(millions)

Classification

Measurement Level

April 29, 2023

January 28, 2023

April 30, 2022

(millions)

Classification

Measurement Level

July 29, 2023

January 28, 2023

July 30, 2022

Assets

Short-term investments

Cash and Cash Equivalents

Level 1

408

1,343

182

Short-term investments

Cash and Cash Equivalents

Level 1

739

1,343

189

Prepaid forward contracts

Other Current Assets

Level 1

Prepaid forward contracts

Other Current Assets

Level 1

Interest rate swaps

Other Current Assets

Level 2

—

Interest rate swaps

Other Current Assets

Level 2

—

Interest rate swaps

Other Noncurrent Assets

Level 2

292

Interest rate swaps

Other Noncurrent Assets

Level 2

—

290

Liabilities

Interest rate swaps

Other Current Liabilities

Level 2

—

Interest rate swaps

Other Noncurrent Liabilities

Level 2

Interest rate swaps

Other Noncurrent Liabilities

Level 2

130


Significant Financial Instruments Not Measured at Fair Value (a) (millions)	Significant Financial Instruments Not Measured at Fair Value (a) (millions)	April 29, 2023				January 28, 2023				April 30, 2022				Significant Financial Instruments Not Measured at Fair Value (a) (millions)	July 29, 2023				January 28, 2023				July 30, 2022
		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)	$	14,144	$	13,672	$	14,141	$	13,688	$	11,549	$	11,466	Long-term debt, including current portion (b)	$	14,147	$	13,344	$	14,141	$	13,688	$	11,511	$	11,529

(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, fair value hedge adjustments, and lease liabilities.

4. Supplier Finance Programs

We have arrangements with several financial institutions to act as our paying agents to certain vendors. The arrangements also permit the financial institutions to provide vendors with an option, at our vendors' sole discretion, to sell their receivables from Target to the financial institutions. A vendor’s election to receive early payment at a discounted amount from the financial institutions does not change the amount that we must remit to the financial institutions or our payment date, which is up to 120 days from the invoice date.

We do not pay any fees or pledge any security to these financial institutions under these arrangements. The arrangements can be terminated by either party with notice ranging up to 120 days.

Our outstanding vendor obligations eligible for early payment under these arrangements totaled ~~$3.3~~$3.7 billion, $3.4 billion, and ~~$4.4~~$4.6 billion as of ~~April~~July 29, 2023, January 28, 2023, and ~~April~~July 30, 2022, respectively, and are included within Accounts Payable on our Consolidated Statements of Financial Position. Our outstanding vendor obligations do not represent actual receivables sold by our vendors to the financial institutions, which may be lower.

~~5. Commercial Paper and Long-Term Debt~~

~~We obtain short-term financing from time to time~~ under our commercial paper program. For the three months ended April 29, 2023 and April 30, 2022, the maximum amounts outstanding were $90 million and $1.1 billion, respectively, and the average daily amounts outstanding were $2 million and $291 million, respectively, at a weighted average annual interest rate of 4.8 percent and 0.4 percent, respectively. As of April 29, 2023 and April 30, 2022, $90 million and $945 million, respectively, were outstanding and are classified within Current Portion of Long-Term Debt and Other Borrowings on our Consolidated Statements of Financial Position.


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			10


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

5. Property and Equipment

We review long-lived assets for impairment when store performance expectations, events, or changes in circumstances—such as a decision to relocate or close a store, office, or distribution center, discontinue a project, or make significant software changes—indicate that the asset’s carrying value may not be recoverable. We recognized impairment charges of $33 million for the three and six months ended July 29, 2023. We recognized impairment charges of $27 million and $50 million for the three and six months ended July 30, 2022, respectively. These impairment charges are included in Selling, General and Administrative Expenses (SG&A).

6. Commercial Paper and Long-Term Debt

We obtain short-term financing from time to time under our commercial paper program. For the six months ended July 29, 2023 and July 30, 2022, the maximum amounts outstanding were $90 million and $1.5 billion, respectively, and the average daily amounts outstanding were $2 million and $538 million, respectively, at a weighted average annual interest rate of 4.9 percent and 1.1 percent, respectively. No balances were outstanding as of July 29, 2023. As of July 30, 2022, $1.5 billion was outstanding and is classified within Current Portion of Long-Term Debt and Other Borrowings on our Consolidated Statements of Financial Position.

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

We were party to interest rate swaps with notional amounts totaling $2.45 billion as of ~~April~~July 29, 2023 and January 28, 2023, and ~~$1.50~~$2.25 billion as of ~~April~~July 30, 2022. We pay a floating rate and receive a fixed rate under each of these agreements. All of the agreements are designated as fair value hedges, and all were considered to be perfectly effective under the shortcut method during the three and six months ended ~~April~~July 29, 2023 and ~~April~~July 30, 2022.

During ~~the first quarter of~~ 2023, we amended ~~certain of our~~ interest rate swaps with notional amounts totaling ~~$1.25~~$1.5 billion to replace the London Interbank Offered Rate (LIBOR) with the daily Secured Overnight Financing Rate (SOFR) as part of our planned reference rate reform activities. These amendments did not result in any change to our application of hedge accounting or any impact to our consolidated financial statements.

We were party to forward-starting interest rate swaps with notional amounts totaling $2.15 billion as of ~~April~~July 30, 2022. During 2022, we terminated all remaining forward-starting interest rate swap agreements. The resulting gains upon termination were recorded in Accumulated Other Comprehensive Loss and will be recognized as a reduction to Net Interest Expense over the respective term of the debt.

Effect of Hedges on Debt
(millions)
April 29, 2023 January 28, 2023 April 30, 2022
Long-term debt and other borrowings
Carrying amount of hedged debt $ 2,376 $ 2,366 $ 1,468
Cumulative hedging adjustments, included in carrying amount (65) (74) (27)

Effect of Hedges on Net Interest Expense Three Months Ended
(millions) April 29, 2023 April 30, 2022
Gain (loss) on fair value hedges recognized in Net Interest Expense
Interest rate swap designated as fair value hedges $ 9 $ (104)
Hedged debt (9) 104
Gain on cash flow hedges recognized in Net Interest Expense 6 —
Total $ 6 $ —


Effect of Hedges on Debt (millions)	July 29, 2023		January 28, 2023		July 30, 2022



Long-term debt and other borrowings
Carrying amount of hedged debt	$	2,305	$	2,366	$	2,263
Cumulative hedging adjustments, included in carrying amount	(136)		(74)		22


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			11


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes


Effect of Hedges on Net Interest Expense	Three Months Ended				Six Months Ended
(millions)	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022


Gain (loss) on fair value hedges recognized in Net Interest Expense
Interest rate swaps designated as fair value hedges	$	(71)	$	49	$	(62)	$	(55)
Hedged debt	71		(49)		62		55
Gain on cash flow hedges recognized in Net Interest Expense	6		—		12		—
Total	$	6	$	—	$	12	$	—

8. 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. We did not repurchase any of our shares during the ~~three~~six months ended ~~April~~July 29, 2023.


~~Share Repurchase Activity~~	~~Three Months Ended~~
~~(millions, except per share data)~~	~~April 29, 2023~~		~~April 30, 2022~~
~~Number of shares purchased~~	—		~~0.1~~
~~Average price paid per share~~	$	—	$	~~208.60~~
~~Total investment~~	$	—	$	10


Share Repurchase Activity	Three Months Ended				Six Months Ended
(millions, except per share data)	July 29, 2023		July 30, 2022 (a)		July 29, 2023		July 30, 2022 (a)
Number of shares purchased	—		12.5		—		12.5
Average price paid per share	$	—	$	211.58	$	—	$	211.57
Total investment	$	—	$	2,636	$	—	$	2,646

~~Note: This table excludes~~(a) Includes activity related to the ASR arrangement ~~described below because final settlement had not occurred as of April 30, 2022.~~

~~During~~that we entered into during the first quarter of 2022 we entered into an ASR arrangement to repurchase up to $2.75 billion of our common stock. Under the agreement, we paid $2.75 billion and received an initial delivery of 8.9 million shares, which were retired, resulting in a $2.0 billion reduction to Retained Earnings. As of April 30, 2022, $751 million was included in the Consolidated Statement of Financial Position as a reduction to Additional Paid-in Capital. Finalbecause final settlement occurred ~~during~~in the second quarter of 2022. ~~In total, under~~Under the ASR arrangement, we repurchased 12.5 million shares for a total cash investment of $2.6 billion. We did not enter into an ASR arrangement during any other periods presented.

8.9. Pension Benefits

We provide pension plan benefits to eligible team members.


Net Pension Benefits Expense	Net Pension Benefits Expense		Three Months Ended				Net Pension Benefits Expense	Three Months Ended					Six Months Ended
(millions)	(millions)	Classification	April 29, 2023		April 30, 2022				(millions)	Classification	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Service cost benefits earned	Service cost benefits earned	SG&A	$	20	$	23			Service cost benefits earned	SG&A	$	19	$	23	$	39	$	46
Interest cost on projected benefit obligation	Interest cost on projected benefit obligation	Net Other Income	41		29				Interest cost on projected benefit obligation	Net Other Income	42		30		83		59
Expected return on assets	Expected return on assets	Net Other Income	(67)		(59)				Expected return on assets	Net Other Income	(67)		(58)		(134)		(117)
Amortization of losses	Amortization of losses	Net Other Income	—		15				Amortization of losses	Net Other Income	1		15		1		30
Prior service cost	Prior service cost	Net Other Income	3		—				Prior service cost	Net Other Income	8		10		11		10

Total	Total		$	(3)	$	8			Total		$	3	$	20	$	—	$	28


TARGET CORPORATION						Q2 2023 Form 10-Q			12


			FINANCIAL STATEMENTS			Table of Contents
			NOTES			Index to Notes

10. Accumulated Other Comprehensive Income (Loss)


Change in Accumulated Other Comprehensive Income (Loss)	Change in Accumulated Other Comprehensive Income (Loss)	Cash Flow Hedges		Currency Translation Adjustment				Pension				Total		Change in Accumulated Other Comprehensive Income (Loss)	Cash Flow Hedges				Currency Translation Adjustment				Pension				Total
(millions)	(millions)									(millions)
January 28, 2023	January 28, 2023	$	300			$	(23)			$	(696)						$	(419)	January 28, 2023		$	300			$	(23)			$	(696)	$	(419)
Other comprehensive income (loss) before reclassifications, net of tax		—		—				—				—

Amounts reclassified from AOCI, net of tax	Amounts reclassified from AOCI, net of tax	(5)		—				2				(3)		Amounts reclassified from AOCI, net of tax		(9)				—				3				(6)
April 29, 2023		$	295	$	(23)			$	(694)			$	(422)
July 29, 2023														July 29, 2023	$	291			$	(23)			$	(693)			$	(425)


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			1213


			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

~~First~~Second quarter 2023 included the following notable items:

•GAAP and Adjusted diluted earnings per share were ~~$2.05.~~$1.80.

•Total revenue was ~~$25.3~~$24.8 billion, ~~an increase~~a decrease of ~~0.6~~(4.9) percent, reflecting a total sales ~~growth~~decrease of ~~0.5~~(4.9) percent and a ~~10.2~~1.3 percent increase in other revenue.

•Comparable sales ~~were flat,~~decreased (5.4) percent, reflecting a ~~0.9~~(4.8) percent ~~increase~~decrease in traffic and a ~~(0.9)~~(0.7) percent decrease in average transaction amount.

◦Comparable ~~stores originated~~stores-originated sales ~~grew 0.7~~declined (4.3) percent.

◦Comparable ~~digitally originated~~digitally-originated sales declined ~~(3.4)~~(10.5) percent.

•Operating income of ~~$1.3~~$1.2 billion was ~~(1.4)~~273.0 percent ~~lower~~higher than the comparable prior-year period. See Business Environment below for additional information.

Cash flow provided by operating activities was ~~$1.3~~$3.4 billion for the ~~three~~six months ended ~~April~~July 29, 2023, compared with ~~$(1.4) billion~~$47 million cash flow required for operating activities for the ~~three~~six months ended ~~April~~July 30, 2022. The drivers of the operating cash flow increase are described on page 2021.


Earnings Per Share	Earnings Per Share	Three Months Ended						Earnings Per Share	Three Months Ended						Six Months Ended
		April 29, 2023		April 30, 2022		Change					July 29, 2023		July 30, 2022		Change		July 29, 2023		July 30, 2022		Change
GAAP diluted earnings per share	GAAP diluted earnings per share	$	2.05	$	2.16	(4.8)	%			GAAP diluted earnings per share	$	1.80	$	0.39	357.6	%	$	3.86	$	2.55	51.1	%
Adjustments	Adjustments	—		0.03						Adjustments	—		—				—		0.03
Adjusted diluted earnings per share	Adjusted diluted earnings per share	$	2.05	$	2.19	(6.2)	%			Adjusted diluted earnings per share	$	1.80	$	0.39	357.6	%	$	3.86	$	2.59	49.2	%

Note: Amounts may not foot due to rounding. Adjusted diluted earnings per share (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 operations. A reconciliation of non-GAAP financial measures to GAAP measures is provided on page 1819.

We report after-tax return on invested capital (ROIC) because we believe ROIC provides a meaningful measure of our capital allocation effectiveness over time. For the trailing twelve months ended ~~April~~July 29, 2023, after-tax ROIC was ~~11.4~~13.7 percent, compared with ~~25.3~~18.4 percent for the trailing twelve months ended ~~April~~July 30, 2022. The calculation of ROIC is provided on page 1920.

Business Environment

During the first ~~quarter~~two quarters of 2023, sales growth in our Frequency categories (Beauty & Household Essentials and Food & Beverage) was more than offset by accelerating decreases in our Discretionary categories (Apparel & Accessories, Hardlines, and Home Furnishings & ~~Decor)~~Décor). ~~Inventory as~~This trend of ~~April 29, 2023~~ decreased ~~compared with January 28, 2023 and April 30,~~Discretionary category sales began in 2022. ~~This decrease was driven by actions~~In response to this trend, during 2022 we took ~~during 2022~~actions and employed strategies ~~we employed~~ to align inventories with sales ~~trends,~~trends. These actions, as well as improvements in the supply chain, ~~that reduced in-transit inventory.~~have resulted in decreased inventory as of July 29, 2023 compared with January 28, 2023 and July 30, 2022. These actions and improvements have also resulted in a reduction in costs related to managing elevated inventory levels and reduced our working capital investment. ~~In addition,~~

Along with supply chain improvements, we have experienced a significant decrease in freight costs due to a decline in freight rates compared to 2022. We have also experienced lower digital fulfillment costs due to a decrease in digital sales and a continued shift by our guests to lower-cost same-day fulfillment options.

We continue to experience higher inventory shrink, as a percentage of sales, relative to historical levels — including significantly higher shrink rates at certain stores. We believe that this trend is pervasive across the retail industry. Increased shrink has had, and if current trends persist will continue to have, an adverse impact on our results of operations, including potential impairment of our long-lived assets.

The Gross Margin Rate analysis on page 1617 and the Inventory section on page 2021 provide additional information.


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			1314


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

Analysis of Results of Operations


Summary of Operating Income	Summary of Operating Income	Three Months Ended						Summary of Operating Income	Three Months Ended						Six Months Ended
(dollars in millions)	(dollars in millions)	April 29, 2023		April 30, 2022		Change				(dollars in millions)	July 29, 2023		July 30, 2022		Change		July 29, 2023		July 30, 2022		Change
Sales	Sales	$	24,948	$	24,830	0.5	%			Sales	$	24,384	$	25,653	(4.9)	%	$	49,332	$	50,483	(2.3)	%
Other revenue	Other revenue	374		340		10.2				Other revenue	389		384		1.3		763		724		5.5
Total revenue	Total revenue	25,322		25,170		0.6				Total revenue	24,773		26,037		(4.9)		50,095		51,207		(2.2)
Cost of sales	Cost of sales	18,386		18,461		(0.4)				Cost of sales	17,798		20,142		(11.6)		36,184		38,603		(6.3)
Selling, general and administrative expenses	Selling, general and administrative expenses	5,025		4,762		5.5				Selling, general and administrative expenses	5,184		5,002		3.6		10,209		9,764		4.6
Depreciation and amortization (exclusive of depreciation included in cost of sales)	Depreciation and amortization (exclusive of depreciation included in cost of sales)	583		601		(3.0)				Depreciation and amortization (exclusive of depreciation included in cost of sales)	594		572		3.9		1,177		1,173		0.4
Operating income	Operating income	$	1,328	$	1,346	(1.4)	%			Operating income	$	1,197	$	321	273.0	%	$	2,525	$	1,667	51.5	%


Rate Analysis	Rate Analysis	Three Months Ended				Rate Analysis	Three Months Ended				Six Months Ended
		April 29, 2023		April 30, 2022					July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Gross margin rate	Gross margin rate	26.3	%	25.7	%			Gross margin rate	27.0	%	21.5	%	26.7	%	23.5	%
SG&A expense rate	SG&A expense rate	19.8		18.9				SG&A expense rate	20.9		19.2		20.4		19.1
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)	2.3		2.4				Depreciation and amortization expense rate (exclusive of depreciation included in cost of sales)	2.4		2.2		2.3		2.3
Operating income margin rate	Operating income margin rate	5.2		5.3				Operating income margin rate	4.8		1.2		5.0		3.3

Note: Gross margin rate is calculated as gross margin (sales less cost of sales) divided by sales. All other rates are calculated by dividing the applicable amount by total revenue.

Sales

Sales include all merchandise sales, net of expected returns, and our estimate of gift card breakage. We use comparable sales to evaluate the performance of our stores and digital channel sales by measuring the change in sales for a period over the comparable prior-year period of equivalent length. Comparable sales include all sales, except 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 Pickup or Drive Up, and delivery via Shipt. Digitally originated sales may also be fulfilled through our distribution centers, our vendors, or other third parties.

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

Comparable Sales Three Months Ended
April 29, 2023 April 30, 2022
Comparable sales change 0.0 % 3.3 %
Drivers of change in comparable sales
Number of transactions (traffic) 0.9 3.9
Average transaction amount (0.9) (0.6)


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			1415


			MANAGEMENT'S DISCUSSION AND ANALYSIS			Table of Contents
			ANALYSIS OF RESULTS OF OPERATIONS

Comparable Sales by Channel Three Months Ended
April 29, 2023 April 30, 2022
Stores originated comparable sales change 0.7 % 3.4 %
Digitally originated comparable sales change (3.4) 3.2


Comparable Sales	Three Months Ended				Six Months Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Comparable sales change	(5.4)	%	2.6	%	(2.8)	%	3.0	%
Drivers of change in comparable sales
Number of transactions (traffic)	(4.8)		2.7		(2.0)		3.3
Average transaction amount	(0.7)		0.0		(0.8)		(0.3)

Sales by Channel Three Months Ended
April 29, 2023 April 30, 2022
Stores originated 82.5 % 81.8 %
Digitally originated 17.5 18.2
Total 100 % 100 %


Comparable Sales by Channel	Three Months Ended				Six Months Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Stores originated comparable sales change	(4.3)	%	1.3	%	(1.8)	%	2.3	%
Digitally originated comparable sales change	(10.5)		9.0		(7.0)		6.1

Sales by Fulfillment Channel Three Months Ended
April 29, 2023 April 30, 2022
Stores 97.2 % 96.5 %
Other 2.8 3.5
Total 100 % 100 %


Sales by Channel	Three Months Ended				Six Months Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Stores originated	83.1	%	82.1	%	82.8	%	81.9	%
Digitally originated	16.9		17.9		17.2		18.1
Total	100	%	100	%	100	%	100	%


Sales by Fulfillment Channel	Three Months Ended				Six Months Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Stores	97.6	%	96.6	%	97.4	%	96.6	%
Other	2.4		3.4		2.6		3.4
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	Sales by Product Category	Three Months Ended				Sales by Product Category	Three Months Ended				Six Months Ended
		April 29, 2023		April 30, 2022					July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Apparel & accessories	Apparel & accessories	16	%	17	%			Apparel & accessories	17	%	18	%	16	%	18	%
Beauty & household essentials	Beauty & household essentials	31		29				Beauty & household essentials	31		28		31		28
Food & beverage	Food & beverage	24		22				Food & beverage	22		21		23		21
Hardlines	Hardlines	14		15				Hardlines	14		15		14		15
Home furnishings & décor	Home furnishings & décor	15		17				Home furnishings & décor	16		18		16		18
Total	Total	100	%	100	%			Total	100	%	100	%	100	%	100	%

Note 2 to the Financial Statements provides additional product category sales information. 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.

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. For the three months ended ~~April~~July 29, 2023 and ~~April~~July 30, 2022, total RedCard Penetration was ~~19.0~~18.6 percent and ~~20.3~~20.1 percent, respectively.

For the six months ended July 29, 2023 and July 30, 2022, total RedCard Penetration was 18.8 percent and 20.2 percent, respectively.


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			1516


			MANAGEMENT'S DISCUSSION AND ANALYSIS			Table of Contents
			ANALYSIS OF RESULTS OF OPERATIONS

Gross Margin Rate

Quarter-to-Date

Year-to-Date

For the three months ended ~~April~~July 29, 2023, our gross margin rate was ~~26.3~~27.0 percent compared with ~~25.7~~21.5 percent in the comparable prior-year period. ~~The~~For the six months ended July 29, 2023, our gross margin rate was 26.7 percent compared with 23.5 percent in the comparable prior-year period. For both the three and six months ended July 29, 2023, the increase reflected the net impact of

•merchandising benefit, including

◦lower ~~freight costs;~~

◦~~retail price increases;~~clearance and

◦~~lower clearance~~ promotional markdown rates and other costs compared with the prior-year, which included the impact of inventory impairments and other actions;

◦lower freight costs; and

◦retail price increases;

•lower digital fulfillment costs due to a decrease in digital volume and a ~~beneficial mix of sales fulfilled through~~shift by our guests to lower-cost same-day fulfillment options; and

•higher inventory shrink.

Business Environment on page 1314 provides additional information.

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

For the three months ended April 29, 2023, our SG&A expense rate was 19.8 percent compared with 18.9 percent for the comparable prior-year period. The increase reflected the net impact of cost increases across our business, including investments in team member pay and benefits.

~~Store Data~~

Change in Number of Stores Three Months Ended
April 29, 2023 April 30, 2022
Beginning store count 1,948 1,926
Opened 6 7
Closed — —
Ending store count 1,954 1,933

Number of Stores and Number of Stores
Retail Square Feet (a)
Retail Square Feet April 29, 2023 January 28, 2023 April 30, 2022 April 29, 2023 January 28, 2023 April 30, 2022
170,000 or more sq. ft. 274 274 274 48,985 48,985 49,071
50,000 to 169,999 sq. ft. 1,530 1,527 1,519 191,543 191,241 190,461
49,999 or less sq. ft. 150 147 140 4,465 4,358 4,147
Total 1,954 1,948 1,933 244,993 244,584 243,679

~~(a)In thousands; reflects total square feet less office, supply chain facilities, and vacant space.~~


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			1617


			MANAGEMENT'S DISCUSSION AND ANALYSIS			Table of Contents
			ANALYSIS OF RESULTS OF OPERATIONS

Selling, General, and Administrative Expense Rate

For the three months ended July 29, 2023, our SG&A expense rate was 20.9 percent compared with 19.2 percent for the comparable prior-year period. For the six months ended July 29, 2023, our SG&A expense rate was 20.4 percent compared with 19.1 percent for the comparable prior-year period. The increase reflected the deleveraging impact of lower sales and the net impact of cost increases across our business, including investments in team member pay and benefits.

Store Data


Change in Number of Stores	Three Months Ended		Six Months Ended
	July 29, 2023	July 30, 2022	July 29, 2023	July 30, 2022
Beginning store count	1,954	1,933	1,948	1,926
Opened	5	5	11	12
Closed	(4)	(1)	(4)	(1)

Ending store count	1,955	1,937	1,955	1,937


Number of Stores and	Number of Stores			Retail Square Feet (a)
Retail Square Feet	July 29, 2023	January 28, 2023	July 30, 2022	July 29, 2023	January 28, 2023	July 30, 2022
170,000 or more sq. ft.	274	274	273	48,995	48,985	48,798
50,000 to 169,999 sq. ft.	1,534	1,527	1,521	191,947	191,241	190,734
49,999 or less sq. ft.	147	147	143	4,404	4,358	4,256
Total	1,955	1,948	1,937	245,346	244,584	243,788

(a)In thousands; reflects total square feet less office, supply chain facilities, and vacant space.

Other Performance Factors

Net Interest Expense

Net interest expense was ~~$147~~$141 million and $288 million for the three and six months ended ~~April~~July 29, 2023, ~~and~~respectively, compared with $112 million ~~for~~and $224 million in the ~~three months ended April 30, 2022.~~respective comparable prior-year periods. The increase in net interest expense was primarily due to higher average debt levels in addition to higher floating interest rates for the three and six months ended ~~April~~July 29, 2023 compared with the prior-year ~~period.~~periods.

Provision for Income Taxes

Our effective income tax rate for the three and six months ended ~~April~~July 29, 2023 was ~~21.1~~22.2 percent and 21.6 percent, respectively, compared with ~~19.2~~15.8 percent and 18.7 percent in the respective comparable prior-year ~~period. The~~periods.The increase reflects higher pretax earnings in the current year, resulting in a smaller tax rate benefit from ongoing and discrete tax ~~benefits in the prior-year, primarily related to share-based compensation.~~items.


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			1718


			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 (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 operations. This measure is not in accordance with, or an alternative to, U.S. GAAP. The most comparable GAAP measure is diluted earnings per share. Adjusted EPS should not be considered in isolation or as a substitution for analysis of our results as reported in accordance with GAAP. Other companies may calculate Adjusted EPS differently, limiting the usefulness of the measure for comparisons with other companies.

Reconciliation of Non-GAAP Adjusted EPS Three Months Ended
April 29, 2023 April 30, 2022
(millions, except per share data) Pretax Net of Tax Per Share Pretax Net of Tax Per Share
GAAP diluted earnings per share $ 2.05 $ 2.16
Adjustments
Other (a)
$ — $ — $ — $ 20 $ 15 $ 0.03
Adjusted diluted earnings per share $ 2.05 $ 2.19

Reconciliation of Non-GAAP Adjusted EPS

Three Months Ended

July 29, 2023

July 30, 2022

(millions, except per share data)

Pretax

Net of Tax

Per Share

Pretax

Net of Tax

Per Share

GAAP and adjusted diluted earnings per share

1.80

0.39


Reconciliation of Non-GAAP Adjusted EPS	Six Months Ended
	July 29, 2023						July 30, 2022
(millions, except per share data)	Pretax		Net of Tax		Per Share		Pretax		Net of Tax		Per Share
GAAP diluted earnings per share					$	3.86					$	2.55
Adjustments




Other (a)	$	—	$	—	$	—	$	20	$	15	$	0.03
Adjusted diluted earnings per share					$	3.86					$	2.59

Note: Amounts may not foot due to rounding.

(a)Other items unrelated to current period operations, none of which were individually significant.

Earnings before interest expense and income taxes (EBIT) and earnings 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. 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						EBIT and EBITDA	Three Months Ended						Six Months Ended
(dollars in millions)	(dollars in millions)	April 29, 2023		April 30, 2022		Change				(dollars in millions)	July 29, 2023		July 30, 2022		Change		July 29, 2023		July 30, 2022		Change
Net earnings	Net earnings	$	950	$	1,009	(5.8)	%			Net earnings	$	835	$	183	356.5	%	$	1,785	$	1,192	49.8	%
+ Provision for income taxes	+ Provision for income taxes	254		240		6.0				+ Provision for income taxes	237		34		591.2		491		274		79.4
+ Net interest expense	+ Net interest expense	147		112		31.2				+ Net interest expense	141		112		26.3		288		224		28.7
EBIT	EBIT	$	1,351	$	1,361	(0.7)	%			EBIT	$	1,213	$	329	268.8	%	$	2,564	$	1,690	51.8	%
+ Total depreciation and amortization (a)	+ Total depreciation and amortization (a)	667		679		(1.8)				+ Total depreciation and amortization (a)	683		650		5.0		1,350		1,329		1.5
EBITDA	EBITDA	$	2,018	$	2,040	(1.1)	%			EBITDA	$	1,896	$	979	93.6	%	$	3,914	$	3,019	29.6	%

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


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			1819


			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	April 29, 2023		April 30, 2022		Numerator	July 29, 2023		July 30, 2022
Operating income	Operating income	$	3,830	$	7,918	Operating income	$	4,706	$	5,773
+ Net other income	+ Net other income	57		55		+ Net other income	65		54
EBIT	EBIT	3,887		7,973		EBIT	4,771		5,827
+ Operating lease interest (a)	+ Operating lease interest (a)	96		87		+ Operating lease interest (a)	102		88
- Income taxes (b)	- Income taxes (b)	770		1,804		- Income taxes (b)	986		1,282
Net operating profit after taxes	Net operating profit after taxes	$	3,213	$	6,256	Net operating profit after taxes	$	3,887	$	4,633


Denominator	Denominator	April 29, 2023			April 30, 2022			May 1, 2021		Denominator	July 29, 2023			July 30, 2022			July 31, 2021
Current portion of long-term debt and other borrowings	Current portion of long-term debt and other borrowings	$	200		$	1,089		$	1,173	Current portion of long-term debt and other borrowings	$	1,106		$	1,649		$	1,190
+ Noncurrent portion of long-term debt	+ Noncurrent portion of long-term debt	16,010			13,379			11,509		+ Noncurrent portion of long-term debt	14,926			13,453			11,589
+ Shareholders' investment	+ Shareholders' investment	11,605			10,774			14,959		+ Shareholders' investment	11,990			10,592			14,860
+ Operating lease liabilities (c)	+ Operating lease liabilities (c)	2,921			2,854			2,563		+ Operating lease liabilities (c)	3,104			2,823			2,695
- Cash and cash equivalents	- Cash and cash equivalents	1,321			1,112			7,816		- Cash and cash equivalents	1,617			1,117			7,368
Invested capital	Invested capital	$	29,415		$	26,984		$	22,388	Invested capital	$	29,509		$	27,400		$	22,966
Average invested capital (d)	Average invested capital (d)	$	28,199		$	24,686				Average invested capital (d)	$	28,454		$	25,183

After-tax return on invested capital	After-tax return on invested capital	11.4		%	25.3		%			After-tax return on invested capital	13.7		%	18.4		%

(a)Represents the add-back to operating income driven by the hypothetical interest expense we would incur if the property under our operating leases were owned or accounted for as finance leases. Calculated using the discount rate for each lease and recorded as a component of rent expense within SG&A. 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, which were ~~19.3~~20.2 percent and ~~22.4~~21.7 percent for the trailing twelve months ended ~~April~~July 29, 2023 and ~~April~~July 30, 2022, respectively. For the trailing twelve months ended ~~April~~July 29, 2023 and ~~April~~July 30, 2022, includes tax effect of ~~$0.8~~$1.0 billion and ~~$1.8~~$1.3 billion, respectively, related to EBIT and ~~$18~~$20 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, 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						Q1Q2 2023 Form 10-Q			1920


			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.

Our cash and cash equivalents balance was ~~$1.3~~$1.6 billion, $2.2 billion, and $1.1 billion as of ~~April~~July 29, 2023, January 28, 2023, and ~~April~~July 30, 2022, respectively. Our cash and cash equivalents balance included short-term investments of ~~$408~~$739 million, $1.3 billion, and ~~$182~~$189 million as of ~~April~~July 29, 2023, January 28, 2023, and ~~April~~July 30, 2022, 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~~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

Cash flows provided by operating activities were ~~$1.3~~$3.4 billion for the ~~three~~six months ended ~~April~~July 29, 2023, compared with ~~$(1.4) billion~~$47 million of cash flows required for operating activities for the ~~three~~six months ended ~~April~~July 30, 2022. For the ~~three~~six months ended ~~April~~July 29, 2023, operating cash flows increased as a result of higher net earnings and an improvement in working capital, including lower inventory levels, compared with the ~~three~~six months ended ~~April~~July 30, 2022.

Inventory

Inventory was ~~$12.6~~$12.7 billion as of ~~April~~July 29, 2023, compared with $13.5 billion and ~~$15.1~~$15.3 billion at January 28, 2023 and ~~April~~July 30, 2022, respectively. The decrease ~~over~~from the balance as of ~~April~~July 30, 2022 primarily reflects actions taken to align inventory levels with sales trends ~~as well as~~and improvements in the supply chain, ~~that~~including reduced in-transit inventory.

The Business Environment section on page 1314 provides additional information.

Investing Cash Flows

~~Investing cash flows included capital investments of $1.6 billion and $1.0~~Cash required for investing activities increased to $2.8 billion for the ~~three~~six months ended ~~April~~July 29, 2023, ~~and April~~compared to $2.5 billion for the six months ended July 30, 2022, ~~respectively. The increase primarily reflects real estate acquisitions for new store and supply chain sites and timing of remodel activity.~~due to capital investments.

Dividends

We paid dividends totaling ~~$497~~$499 million ($1.08 per share) and $996 million ($2.16 per share) for the three and six months ended ~~April~~July 29, 2023, respectively, and ~~$424~~$417 million ($0.90 per share) and $841 million ($1.80 per share) for the three and six months ended ~~April~~July 30, 2022, respectively, a per share increase of 20.0 percent. We declared dividends totaling ~~$507~~$516 million ($1.10 per share) during the second quarter of 2023 and $502 million ($1.08 per share) during the ~~first quarter of 2023 and $426 million ($0.90 per share) during the first~~second quarter of 2022, a per share increase of ~~20.0~~1.9 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 did not repurchase any shares during the ~~three~~six months ended ~~April~~July 29, 2023. See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds of this Quarterly Report on Form 10-Q and Note 78 to the Financial Statements for more information.


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			2021


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

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 ~~April~~July 29, 2023, our credit ratings were as follows:


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

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

We have the ability to obtain short-term financing from time to time under our commercial paper program and credit facilities. Our committed $1.0 billion 364-day and $3.0 billion unsecured revolving credit facilities that will expire in October 2023 and October 2027, respectively, backstop our commercial paper program. No balances were outstanding under either credit facility at any time during 2023 or 2022. We ~~had $90 million and $945 million~~did not have any balances outstanding under our commercial paper program as of ~~April~~July 29, 2023, and ~~April~~we had $1.5 billion outstanding as of July 30, ~~2022, respectively.~~2022. Note 56 to the Financial Statements provides additional information.

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 also contain a debt leverage covenant. We are, and expect to remain, in compliance with these covenants. Additionally, as of ~~April~~July 29, 2023, 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.

We believe our sources of liquidity, namely operating cash flows, credit facility capacity, and access to capital markets, will continue to be adequate to meet our contractual obligations, working capital and planned capital expenditures, finance anticipated expansion and strategic initiatives, fund debt maturities, pay dividends, and execute purchases under our share repurchase program for the foreseeable future.

New Accounting Pronouncements

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


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			2122


			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 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, 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 January 28, 2023, 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 January 28, 2023.

Item 4. Controls and Procedures

Changes in Internal Control Over Financial Reporting

During the most recently completed fiscal quarter, there were no changes which materially affected, or are 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						Q1Q2 2023 Form 10-Q			2223


			SUPPLEMENTAL INFORMATION			Table of Contents
						Index to Notes

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

~~On March~~For the quarterly period ended July 29, 2023, ~~Target Corporation and certain~~no response is required under Item 103 of ~~its officers were named as defendants in a purported federal securities law class action filed in the United States District Court~~Regulation S-K, nor have there been any material developments for the District of Minnesota. The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 relating to certain prior disclosures of Target about its business model, strategy, and inventory. The plaintiff seeks to represent a class of shareholders who purchased or otherwise acquired Target common stock between August 18, 2021 and May 17, 2022. The plaintiff seeks damages and other relief, including attorneys’ fees, based on allegations that the defendants misled investors about Target’s business model, strategy, and inventory and that such conduct affected the value of Target common stock. Target intends to vigorously defend this lawsuit.any previously reported legal proceedings.

Item 1A. Risk Factors

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 January 28, 2023.

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

On August 11, 2021, our Board of Directors authorized a $15 billion share repurchase program with no stated expiration. Under the program, we have repurchased 23.8 million shares of common stock at an average price of $223.52, for a total investment of $5.3 billion. As of ~~April~~July 29, 2023, the dollar value of shares that may yet be purchased under the program is $9.7 billion. There were no Target common stock purchases made during the three months ended ~~April~~July 29, 2023 by Target or any "affiliated purchaser" of Target, as defined in Rule 10b-18(a)(3) under the Exchange Act.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~Not applicable.~~On May 31, 2023, Brian C. Cornell, Target’s Chair of the Board and Chief Executive Officer, terminated a written plan for the sale of Target common stock that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act as they existed at the time of adoption. This written plan was adopted on December 2, 2022, was scheduled to expire on August 18, 2023, and provided for the sale of 105,000 shares of Target common stock in the aggregate. 35,000 shares of Target common stock were sold pursuant to the written plan prior to its termination.


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			2324


			SUPPLEMENTAL INFORMATION			Table of Contents
						Index to Notes

Item 6. Exhibits


3.1		Amended and Restated Articles of Incorporation of Target Corporation (as amended through June 9, 2010) (filed as Exhibit (3)A to Target's Current Report on Form 8-K on June 10, 2010 and incorporated herein by reference).
3.2		Bylaws of Target Corporation (as amended and restated through January 11, 2023) (filed as Exhibit 3.2 to Target's Current Report on Form 8-K on January 12, 2023 and incorporated herein by reference).
~~10.21.4~~	** +	~~Letter Agreement dated March 8, 2023 among Target Corporation, Target Enterprise, Inc. and TD Bank USA, N.A.~~

31.1	**	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	**	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	***	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	***	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	**	Inline 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)


**			Filed herewith.
***			Furnished herewith.
+			Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission upon its request.


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			2425


			SUPPLEMENTAL INFORMATION			Table of Contents
						Index to Notes

SIGNATURES

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: ~~May 26,~~August 25, 2023	By:	/s/ Michael J. Fiddelke
			Michael J. Fiddelke
			Executive Vice President and
			Chief Financial Officer
			(Duly Authorized Officer and
			Principal Financial Officer)


		/s/ Matthew A. Liegel
			Matthew A. Liegel
			Senior Vice President, Chief Accounting Officer
			and Controller


TARGET CORPORATION						Q1Q2 2023 Form 10-Q			2526


INDEX TO NOTES

Notes to Consolidated Financial Statements		8
Note 1	Accounting Policies	8
Note 2	Revenue	9
Note 3	Fair Value Measurements	10
Note 4	Supplier Finance Programs	10
Note 5	Property and Equipment	11
Note 6	Commercial Paper and Long-Term Debt	1011
Note 67	Derivative Financial Instruments	11
Note 78	Share Repurchase	12
Note 89	Pension Benefits	12
Note 910	Accumulated Other Comprehensive Income (Loss)	1213