MINNEAPOLIS, March 3, 2020 /PRNewswire/ --
- Fourth quarter comparable sales grew 1.5 percent, reflecting
comparable digital sales growth of 20 percent.
- Same-day services (Order Pick Up, Drive Up and Shipt)
accounted for more than 80 percent of Target's fourth-quarter
comparable digital sales growth.
- Fourth quarter GAAP EPS from continuing operations of
$1.63 was 6.9 percent higher than
last year. Adjusted EPS1 of $1.69 was 10.6 percent higher than last
year.
- Full-year comparable sales grew 3.4 percent, reflecting
comparable digital sales growth of 29 percent.
-
- 2019 marks the sixth
consecutive year in which Target's comparable digital sales have
grown more than 25 percent.
- In 2019, Target's same-day services grew more than 90
percent, accounting for nearly three-quarters of the Company's
comparable digital sales growth.
- Full-year operating income dollars grew 13.3 percent
compared with last year. The Company's full-year operating income
margin rate of 6.0 percent was 50 bps higher than last
year.
- Full-year GAAP EPS from continuing operations grew 15.4
percent compared with last year, while full-year Adjusted EPS grew
18.4 percent. Both GAAP EPS from continuing operations and Adjusted
EPS established new all-time highs.
- For additional media materials, please visit:
https://corporate.target.com/article/2020/03/q4-fy2019-earnings
Target Corporation (NYSE: TGT) today announced its
fourth-quarter and full-year 2019 results. The Company
reported GAAP earnings per share (EPS) from continuing operations
of $1.63 in fourth quarter and
$6.34 for full-year 2019, compared
with $1.52 and $5.50 in 2018, respectively. Fourth quarter
Adjusted EPS were $1.69 and full-year
Adjusted EPS were $6.39, compared
with $1.53 and $5.39 in 2018, respectively. The attached tables
provide a reconciliation of non-GAAP to GAAP measures. All earnings
per share figures refer to diluted EPS.
"With eleven consecutive quarters of positive comparable sales
growth, driven by healthy performance in both our stores and
digital channels, Target's results demonstrate that we've built a
sustainable business model that drives strong topline growth and
consistent bottom line performance," said Brian Cornell, Chairman and CEO of Target. "The
strategic investments we've made over the past several years to
elevate the shopping experience, curate our multi-category
assortment at scale, and deliver ease and convenience through our
fulfillment capabilities are deepening our relationship with our
guest. As we look ahead to 2020 and beyond, we are well positioned
to build on this strong foundation to further differentiate Target
and drive long-term, profitable growth."
Fiscal 2020 Guidance
In first quarter 2020, Target expects a low-single digit
increase in comparable sales and a mid-single digit increase in
operating income. The Company expects both GAAP EPS from continuing
operations and Adjusted EPS of $1.55 to $1.75.
For full-year 2020, Target expects a low-single digit increase
in comparable sales and a mid-single digit increase in
operating income. The Company expects both GAAP EPS from continuing
operations and Adjusted EPS of $6.70 to $7.00.
First quarter and full-year 2020 GAAP EPS from continuing
operations may include the impact of certain discrete items, which
will be excluded in calculating Adjusted EPS. The Company is not
currently aware of any such discrete items.
Operating Results
The Company's total comparable sales grew 1.5 percent in the
fourth quarter, reflecting comparable digital sales growth of 20
percent. Total revenue of $23.4
billion grew 1.8 percent compared with last year, reflecting
sales growth of 1.8 percent and a 9.3 percent increase in other
revenue. Operating income was $1,198
million in fourth quarter 2019, up 7.3 percent from
$1,117 million in 2018.
Fourth quarter operating income margin rate was 5.1 percent in
2019 compared with 4.9 percent in 2018. Fourth quarter gross margin
rate was 26.3 percent, compared with 25.7 percent in
2018. This increase reflected the benefit of merchandising
efforts to optimize costs, pricing, promotions and assortment,
combined with the benefit of favorable category sales mix. Fourth
quarter SG&A expense rate was 19.3 percent in 2019, compared
with 19.0 percent in 2018. Fourth quarter SG&A results
reflected higher marketing expenses compared with last year,
partially offset by lower net compensation expenses, including
lower incentive compensation in 2019.
Full-year sales increased 3.6 percent to $77.1 billion from $74.4
billion last year, reflecting a 3.4 percent increase in
comparable sales combined with sales from non-mature stores.
Full-year revenue of $78.1 billion
grew 3.7 percent compared with last year, reflecting sales growth
of 3.6 percent and a 6.3 percent increase in other revenue.
Full-year operating income was $4,658
million in 2019, an increase of 13.3 percent from
$4,110 million last year. Full-year
gross margin rate was 28.9 percent, compared with 28.4 percent in
2018. This increase reflects merchandising efforts to optimize
costs, pricing, promotions and assortment, combined with the
benefit of favorable category sales mix, partially offset by higher
supply chain and fulfillment costs. Full-year SG&A expense rate
was 20.8 percent in 2019, approximately flat to last year. Store
labor productivity and lower incentive compensation in 2019 offset
pressure from wage growth.
Interest Expense and Taxes from Continuing Operations
The Company's fourth quarter 2019 net interest expense was
$118 million, compared with
$110 million last year. Excluding the
loss of $10 million related to the
early retirement of debt in 2019, fourth quarter net interest
expense was approximately flat to last year.
Full-year 2019 net interest expense was $477 million, compared with $461 million in 2018, driven primarily by the
loss of $10 million related to the
early retirement of debt in 2019.
Fourth quarter 2019 effective income tax rate from continuing
operations was 20.7 percent, compared with 21.4 percent last year.
The Company's full-year 2019 effective income tax rate from
continuing operations was 22.0 percent compared with 20.3 percent
in 2018, when results included discrete benefits related to the Tax
Cuts and Jobs Act of 2017 and the resolution of certain income tax
matters unrelated to 2018 operations.
Shareholder Returns
The Company returned $940 million to shareholders in fourth
quarter 2019, including:
- Dividends of $334 million,
unchanged from $334 million in fourth
quarter 2018, reflecting a decline in share count offset by a 3.1
percent increase in the dividend per share.
- Share repurchases totaling $606
million that retired 5.1 million shares of common stock at
an average price of $117.81.
At the end of the fourth quarter, the Company had approximately
$0.1 billion of remaining capacity
under the $5 billion share repurchase
program approved in 2016. In September
2019, Target's Board of Directors authorized a new
$5 billion share repurchase program.
Repurchases through this program will begin upon completion of the
2016 program.
For the trailing twelve months through fourth quarter 2019,
after-tax return on invested capital (ROIC) was 16.0 percent,
compared with 14.7 percent for the twelve months through fourth
quarter 2018. The tables of this release provide additional
information about the Company's ROIC calculation.
Webcast Details
Target will webcast its financial community meeting, including a
Q&A session, beginning at 8:00 a.m.
CST today. Investors and the media are invited to listen to
the meeting at Investors.Target.com (hover over "investors" then
click on "events & presentations"). A replay of the webcast
will be available within four hours of the meeting's
conclusion.
Miscellaneous
Statements in this release regarding first quarter and full-year
2020 earnings per share, comparable sales guidance and operating
income are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements
are subject to risks and uncertainties which could cause the
Company's actual results to differ materially. The most important
risks and uncertainties are described in Item 1A of the Company's
Form 10-K for the fiscal year ended Feb. 2,
2019. Forward-looking statements speak only as of the date
they are made, and the Company does not undertake any obligation to
update any forward-looking statement.
About Target
Minneapolis-based Target
Corporation (NYSE: TGT) serves guests at more than 1,800 stores and
at Target.com. Since 1946, Target has given 5% of its profit to
communities, which today equals millions of dollars a week. For the
latest store count or for more information, visit
Target.com/Pressroom. For a behind-the-scenes look at Target, visit
Target.com/abullseyeview or follow @TargetNews on Twitter.
1Adjusted EPS, a non-GAAP financial measure, excludes
the impact of certain discretely managed items. See the tables of
this release for additional information about the items that have
been excluded from Adjusted EPS.
TARGET
CORPORATION
|
|
Consolidated
Statements of Operations
|
|
|
Three Months Ended
|
|
|
|
Twelve Months
Ended
|
|
|
(millions, except per share data) (unaudited)
|
|
February 1,
2020
|
|
February 2,
2019
|
|
Change
|
|
February 1,
2020
|
|
February 2,
2019
|
|
Change
|
Sales
|
|
$
|
23,133
|
|
|
$
|
22,734
|
|
|
1.8
|
%
|
|
$
|
77,130
|
|
|
$
|
74,433
|
|
|
3.6
|
%
|
Other
revenue
|
|
265
|
|
|
243
|
|
|
9.3
|
|
|
982
|
|
|
923
|
|
|
6.3
|
|
Total
revenue
|
|
23,398
|
|
|
22,977
|
|
|
1.8
|
|
|
78,112
|
|
|
75,356
|
|
|
3.7
|
|
Cost of
sales
|
|
17,056
|
|
|
16,900
|
|
|
0.9
|
|
|
54,864
|
|
|
53,299
|
|
|
2.9
|
|
Selling, general and
administrative expenses
|
|
4,504
|
|
|
4,376
|
|
|
2.9
|
|
|
16,233
|
|
|
15,723
|
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization (exclusive of depreciation included in cost of
sales)
|
|
640
|
|
|
584
|
|
|
9.4
|
|
|
2,357
|
|
|
2,224
|
|
|
6.0
|
|
Operating
income
|
|
1,198
|
|
|
1,117
|
|
|
7.3
|
|
|
4,658
|
|
|
4,110
|
|
|
13.3
|
|
Net interest
expense
|
|
118
|
|
|
110
|
|
|
7.2
|
|
|
477
|
|
|
461
|
|
|
3.3
|
|
Net other (income) /
expense
|
|
29
|
|
|
(7)
|
|
|
(516.2)
|
|
|
(9)
|
|
|
(27)
|
|
|
(71.4)
|
|
Earnings from
continuing operations before income taxes
|
|
1,051
|
|
|
1,014
|
|
|
3.6
|
|
|
4,190
|
|
|
3,676
|
|
|
14.0
|
|
Provision for income
taxes
|
|
218
|
|
|
216
|
|
|
0.5
|
|
|
921
|
|
|
746
|
|
|
23.4
|
|
Net earnings from
continuing operations
|
|
833
|
|
|
798
|
|
|
4.4
|
|
|
3,269
|
|
|
2,930
|
|
|
11.6
|
|
Discontinued
operations, net of tax
|
|
1
|
|
|
1
|
|
|
|
|
12
|
|
|
7
|
|
|
|
Net
earnings
|
|
$
|
834
|
|
|
$
|
799
|
|
|
4.4
|
%
|
|
$
|
3,281
|
|
|
$
|
2,937
|
|
|
11.7
|
%
|
Basic earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
1.64
|
|
|
$
|
1.53
|
|
|
7.2
|
%
|
|
$
|
6.39
|
|
|
$
|
5.54
|
|
|
15.4
|
%
|
Discontinued
operations
|
|
—
|
|
|
—
|
|
|
|
|
0.02
|
|
|
0.01
|
|
|
|
Net earnings per
share
|
|
$
|
1.65
|
|
|
$
|
1.54
|
|
|
7.2
|
%
|
|
$
|
6.42
|
|
|
$
|
5.55
|
|
|
15.6
|
%
|
Diluted earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
1.63
|
|
|
$
|
1.52
|
|
|
6.9
|
%
|
|
$
|
6.34
|
|
|
$
|
5.50
|
|
|
15.4
|
%
|
Discontinued
operations
|
|
—
|
|
|
—
|
|
|
|
|
0.02
|
|
|
0.01
|
|
|
|
Net earnings per
share
|
|
$
|
1.63
|
|
|
$
|
1.52
|
|
|
6.9
|
%
|
|
$
|
6.36
|
|
|
$
|
5.51
|
|
|
15.5
|
%
|
Weighted average
common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
506.2
|
|
|
519.9
|
|
|
(2.6)
|
%
|
|
510.9
|
|
|
528.6
|
|
|
(3.3)
|
%
|
Diluted
|
|
511.9
|
|
|
524.3
|
|
|
(2.4)
|
%
|
|
515.6
|
|
|
533.2
|
|
|
(3.3)
|
%
|
Antidilutive
shares
|
|
—
|
|
|
0.2
|
|
|
|
|
—
|
|
|
—
|
|
|
|
Dividends declared
per share
|
|
$
|
0.66
|
|
|
$
|
0.64
|
|
|
3.1
|
%
|
|
$
|
2.62
|
|
|
$
|
2.54
|
|
|
3.1
|
%
|
|
Note: Per share
amounts may not foot due to rounding.
|
TARGET
CORPORATION
|
|
Consolidated
Statements of Financial Position
|
(millions, except
footnotes) (unaudited)
|
|
February 1,
2020
|
|
February 2,
2019
|
Assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,577
|
|
|
$
|
1,556
|
|
Inventory
|
|
8,992
|
|
|
9,497
|
|
Other current
assets
|
|
1,333
|
|
|
1,466
|
|
Total current
assets
|
|
12,902
|
|
|
12,519
|
|
Property and
equipment
|
|
|
|
|
Land
|
|
6,036
|
|
|
6,064
|
|
Buildings and
improvements
|
|
30,603
|
|
|
29,240
|
|
Fixtures and
equipment
|
|
6,083
|
|
|
5,912
|
|
Computer hardware and
software
|
|
2,692
|
|
|
2,544
|
|
Construction-in-progress
|
|
533
|
|
|
460
|
|
Accumulated
depreciation
|
|
(19,664)
|
|
|
(18,687)
|
|
Property and
equipment, net
|
|
26,283
|
|
|
25,533
|
|
Operating lease
assets
|
|
2,236
|
|
|
1,965
|
|
Other noncurrent
assets
|
|
1,358
|
|
|
1,273
|
|
Total
assets
|
|
$
|
42,779
|
|
|
$
|
41,290
|
|
Liabilities and
shareholders' investment
|
|
|
|
|
Accounts
payable
|
|
$
|
9,920
|
|
|
$
|
9,761
|
|
Accrued and other
current liabilities
|
|
4,406
|
|
|
4,201
|
|
Current portion of
long-term debt and other borrowings
|
|
161
|
|
|
1,052
|
|
Total current
liabilities
|
|
14,487
|
|
|
15,014
|
|
Long-term debt and
other borrowings
|
|
11,338
|
|
|
10,223
|
|
Noncurrent operating
lease liabilities
|
|
2,275
|
|
|
2,004
|
|
Deferred income
taxes
|
|
1,122
|
|
|
972
|
|
Other noncurrent
liabilities
|
|
1,724
|
|
|
1,780
|
|
Total noncurrent
liabilities
|
|
16,459
|
|
|
14,979
|
|
Shareholders'
investment
|
|
|
|
|
Common
stock
|
|
42
|
|
|
43
|
|
Additional paid-in
capital
|
|
6,226
|
|
|
6,042
|
|
Retained
earnings
|
|
6,433
|
|
|
6,017
|
|
Accumulated other
comprehensive loss
|
|
(868)
|
|
|
(805)
|
|
Total shareholders'
investment
|
|
11,833
|
|
|
11,297
|
|
Total liabilities
and shareholders' investment
|
|
$
|
42,779
|
|
|
$
|
41,290
|
|
|
Common
Stock Authorized 6,000,000,000 shares, $0.0833 par value;
504,198,962 and 517,761,600 shares issued and outstanding as of
February 1, 2020, and February 2, 2019,
respectively.
|
|
Preferred
Stock Authorized 5,000,000 shares, $0.01 par value; no
shares were issued or outstanding during any period
presented.
|
TARGET
CORPORATION
|
|
Consolidated
Statements of Cash Flows
|
|
|
Twelve Months
Ended
|
(millions) (unaudited)
|
|
February
1,
2020
|
|
February
2,
2019
|
Operating
activities
|
|
|
|
|
Net
earnings
|
|
$
|
3,281
|
|
|
$
|
2,937
|
|
Earnings from
discontinued operations, net of tax
|
|
12
|
|
|
7
|
|
Net earnings from
continuing operations
|
|
3,269
|
|
|
2,930
|
|
Adjustments to
reconcile net earnings to cash provided by operations:
|
|
|
|
|
Depreciation and
amortization
|
|
2,604
|
|
|
2,474
|
|
Share-based
compensation expense
|
|
147
|
|
|
132
|
|
Deferred income
taxes
|
|
178
|
|
|
322
|
|
Loss on debt
extinguishment
|
|
10
|
|
|
—
|
|
Noncash losses /
(gains) and other, net
|
|
29
|
|
|
95
|
|
Changes in operating
accounts:
|
|
|
|
|
Inventory
|
|
505
|
|
|
(900)
|
|
Other
assets
|
|
18
|
|
|
(299)
|
|
Accounts
payable
|
|
140
|
|
|
1,127
|
|
Accrued and other
liabilities
|
|
199
|
|
|
89
|
|
Cash provided by
operating activities—continuing operations
|
|
7,099
|
|
|
5,970
|
|
Cash provided by
operating activities—discontinued operations
|
|
18
|
|
|
3
|
|
Cash provided by
operations
|
|
7,117
|
|
|
5,973
|
|
Investing
activities
|
|
|
|
|
Expenditures for
property and equipment
|
|
(3,027)
|
|
|
(3,516)
|
|
Proceeds from disposal
of property and equipment
|
|
63
|
|
|
85
|
|
Other
investments
|
|
20
|
|
|
15
|
|
Cash required for
investing activities
|
|
(2,944)
|
|
|
(3,416)
|
|
Financing
activities
|
|
|
|
|
Additions to long-term
debt
|
|
1,739
|
|
|
—
|
|
Reductions of
long-term debt
|
|
(2,069)
|
|
|
(281)
|
|
Dividends
paid
|
|
(1,330)
|
|
|
(1,335)
|
|
Repurchase of
stock
|
|
(1,565)
|
|
|
(2,124)
|
|
Stock option
exercises
|
|
73
|
|
|
96
|
|
Cash required for
financing activities
|
|
(3,152)
|
|
|
(3,644)
|
|
Net increase /
(decrease) in cash and cash equivalents
|
|
1,021
|
|
|
(1,087)
|
|
Cash and cash
equivalents at beginning of period
|
|
1,556
|
|
|
2,643
|
|
Cash and cash
equivalents at end of period
|
|
$
|
2,577
|
|
|
$
|
1,556
|
|
TARGET
CORPORATION
|
|
Operating
Results
|
|
Rate
Analysis
|
|
Three Months Ended
|
|
Twelve Months
Ended
|
(unaudited)
|
|
February
1,
2020
|
|
February
2,
2019
|
|
February
1,
2020
|
|
February
2,
2019
|
Gross margin
rate
|
|
26.3
|
%
|
|
25.7
|
%
|
|
28.9
|
%
|
|
28.4
|
%
|
SG&A expense
rate
|
|
19.3
|
|
|
19.0
|
|
|
20.8
|
|
|
20.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization (exclusive of depreciation included in cost of sales)
expense rate
|
|
2.7
|
|
|
2.5
|
|
|
3.0
|
|
|
3.0
|
|
Operating income
margin rate
|
|
5.1
|
|
|
4.9
|
|
|
6.0
|
|
|
5.5
|
|
|
Note: Gross
margin rate is calculated as gross margin (sales less cost of
sales) divided by sales. All other rates are calculated by dividing
the applicable amount by total revenue. Other revenue includes $176
million and $680 million of profit-sharing income under our credit
card program agreement for the three and twelve months ended
February 1, 2020, respectively, and $170 million and $673
million for the three and twelve months ended February 2,
2019, respectively.
|
|
Comparable
Sales
|
|
Three Months Ended
|
|
Twelve Months
Ended
|
(unaudited)
|
|
February
1,
2020
|
|
February
2,
2019
|
|
February
1,
2020
|
|
February
2,
2019
|
Comparable sales
change
|
|
1.5
|
%
|
|
5.3
|
%
|
|
3.4
|
%
|
|
5.0
|
%
|
Drivers of change in
comparable sales:
|
|
|
|
|
|
|
|
|
Number of
transactions
|
|
1.3
|
|
|
4.5
|
|
|
2.7
|
|
|
5.0
|
|
Average transaction
amount
|
|
0.2
|
|
|
0.8
|
|
|
0.7
|
|
|
0.1
|
|
|
Note: Amounts may not
foot due to rounding.
|
|
Contribution to
Comparable Sales Change
|
|
Three Months Ended
|
|
Twelve Months
Ended
|
(unaudited)
|
|
February
1,
2020
|
|
February
2,
2019
|
|
February
1,
2020
|
|
February
2,
2019
|
Stores channel
comparable sales change
|
|
(0.7)
|
%
|
|
2.9
|
%
|
|
1.4
|
%
|
|
3.2
|
%
|
Contribution from
digitally originated sales to comparable sales change
|
|
2.2
|
|
|
2.4
|
|
|
1.9
|
|
|
1.8
|
|
Total comparable
sales change
|
|
1.5
|
%
|
|
5.3
|
%
|
|
3.4
|
%
|
|
5.0
|
%
|
|
Note: Amounts may not
foot due to rounding.
|
|
Sales by
Channel
|
|
Three Months Ended
|
|
Twelve Months
Ended
|
(unaudited)
|
|
February
1,
2020
|
|
February
2,
2019
|
|
February
1,
2020
|
|
February
2,
2019
|
Stores
originated
|
|
87.7
|
%
|
|
89.6
|
%
|
|
91.2
|
%
|
|
92.9
|
%
|
Digitally
originated
|
|
12.3
|
|
|
10.4
|
|
|
8.8
|
|
|
7.1
|
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
RedCard
Penetration
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
(unaudited)
|
|
February
1,
2020
|
|
February
2,
2019
|
|
February
1,
2020
|
|
February
2,
2019
|
Target Debit
Card
|
|
12.4
|
%
|
|
12.6
|
%
|
|
12.6
|
%
|
|
13.0
|
%
|
Target Credit
Cards
|
|
10.9
|
|
|
11.0
|
|
|
10.7
|
|
|
10.9
|
|
Total RedCard
Penetration
|
|
23.3
|
%
|
|
23.6
|
%
|
|
23.3
|
%
|
|
23.8
|
%
|
|
Note: Amounts may not
foot due to rounding.
|
|
Number of Stores
and Retail Square Feet
|
|
Number of
Stores
|
|
Retail Square Feet
(a)
|
(unaudited)
|
|
February
1,
2020
|
|
February
2,
2019
|
|
February
1,
2020
|
|
February
2,
2019
|
170,000 or more sq.
ft.
|
|
272
|
|
|
272
|
|
|
48,619
|
|
|
48,604
|
|
50,000 to 169,999 sq.
ft.
|
|
1,505
|
|
|
1,501
|
|
|
189,227
|
|
|
188,900
|
|
49,999 or less sq.
ft.
|
|
91
|
|
|
71
|
|
|
2,670
|
|
|
2,077
|
|
Total
|
|
1,868
|
|
|
1,844
|
|
|
240,516
|
|
|
239,581
|
|
|
|
(a)
|
In thousands,
reflects total square feet less office, distribution center, and
vacant space.
|
TARGET
CORPORATION
|
|
Reconciliation of
Non-GAAP Financial Measures
|
|
To provide additional
transparency, we have disclosed non-GAAP adjusted diluted earnings
per share from continuing operations (Adjusted EPS). This metric
excludes certain items presented below. We believe this information
is useful in providing period-to-period comparisons of the results
of our continuing operations. This measure is not in accordance
with, or an alternative to, generally accepted accounting
principles in the United States (GAAP). The most comparable GAAP
measure is diluted earnings per share from continuing operations.
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
than we do, limiting the usefulness of the measure for comparisons
with other companies.
|
|
Reconciliation of
Non-GAAP
Adjusted
EPS
|
|
Three Months
Ended
|
|
|
|
February 1,
2020
|
|
February 2,
2019
|
|
|
(millions, except
per share data) (unaudited)
|
|
Pretax
|
|
Net of Tax
|
|
Per Share
|
|
Pretax
|
|
Net of Tax
|
|
Per Share
|
|
Change
|
GAAP diluted earnings
per share from continuing operations
|
|
|
|
|
|
$
|
1.63
|
|
|
|
|
|
|
$
|
1.52
|
|
|
6.9
|
%
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on investment
(a)
|
|
$
|
41
|
|
|
$
|
31
|
|
|
$
|
0.06
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Tax Act
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
0.01
|
|
|
|
Loss on debt
extinguishment
|
|
10
|
|
|
8
|
|
|
0.02
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Other
(c)
|
|
(9)
|
|
|
(6)
|
|
|
(0.01)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Adjusted diluted
earnings per share from continuing operations
|
|
|
|
|
|
$
|
1.69
|
|
|
|
|
|
|
$
|
1.53
|
|
|
10.6
|
%
|
|
Note: Amounts may not
foot due to rounding.
|
|
Reconciliation of
Non-GAAP
Adjusted
EPS
|
|
Twelve Months
Ended
|
|
|
|
February 1,
2020
|
|
February 2,
2019
|
|
|
(millions, except
per share data) (unaudited)
|
|
Pretax
|
|
Net of Tax
|
|
Per Share
|
|
Pretax
|
|
Net of Tax
|
|
Per Share
|
|
Change
|
GAAP diluted earnings
per share from continuing operations
|
|
|
|
|
|
$
|
6.34
|
|
|
|
|
|
|
$
|
5.50
|
|
|
15.4
|
%
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on investment
(a)
|
|
$
|
41
|
|
|
$
|
31
|
|
|
$
|
0.06
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Tax Act
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36)
|
|
|
(0.07)
|
|
|
|
Loss on debt
extinguishment
|
|
10
|
|
|
8
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Other
(c)
|
|
(17)
|
|
|
(13)
|
|
|
(0.02)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Other income tax
matters (d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18)
|
|
|
(0.03)
|
|
|
|
Adjusted diluted
earnings per share from continuing operations
|
|
|
|
|
|
$
|
6.39
|
|
|
|
|
|
|
$
|
5.39
|
|
|
18.4
|
%
|
|
Note: Amounts may not
foot due to rounding.
|
|
(a)
|
Represents an
unrealized loss on our investment in Casper Sleep, Inc., which is
not core to our continuing operations.
|
(b)
|
Represents discrete
items related to the Tax Cuts and Job Act of 2017 (Tax
Act).
|
(c)
|
Represents insurance
recoveries related to the 2013 data breach.
|
(d)
|
Represents benefits
from the resolution of certain income tax matters unrelated to
current period operations.
|
Earnings from continuing operations before interest expense and
income taxes (EBIT) and earnings from continuing operations before
interest expense, income taxes, depreciation and amortization
(EBITDA) are non-GAAP financial measures. We believe these measures
provide meaningful information about our operational efficiency
compared with our competitors by excluding the impact of
differences in tax jurisdictions and structures, debt levels, and,
for EBITDA, capital investment. These measures are not in
accordance with, or an alternative for, GAAP. The most comparable
GAAP measure is net earnings from continuing operations. 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
|
|
Three Months Ended
|
|
|
|
Twelve Months
Ended
|
|
|
(dollars in
millions) (unaudited)
|
|
February
1, 2020
|
|
February
2, 2019
|
|
Change
|
|
February
1, 2020
|
|
February
2, 2019
|
|
Change
|
Net earnings from
continuing operations
|
|
$
|
833
|
|
|
$
|
798
|
|
|
4.4
|
%
|
|
$
|
3,269
|
|
|
$
|
2,930
|
|
|
11.6
|
%
|
+ Provision for
income taxes
|
|
218
|
|
|
216
|
|
|
0.5
|
|
|
921
|
|
|
746
|
|
|
23.4
|
|
+ Net interest
expense
|
|
118
|
|
|
110
|
|
|
7.2
|
|
|
477
|
|
|
461
|
|
|
3.3
|
|
EBIT
|
|
$
|
1,169
|
|
|
$
|
1,124
|
|
|
3.9
|
%
|
|
$
|
4,667
|
|
|
$
|
4,137
|
|
|
12.8
|
%
|
+ Total
depreciation and amortization (a)
|
|
699
|
|
|
647
|
|
|
8.1
|
|
|
2,604
|
|
|
2,474
|
|
|
5.3
|
|
EBITDA
|
|
$
|
1,868
|
|
|
$
|
1,771
|
|
|
5.5
|
%
|
|
$
|
7,271
|
|
|
$
|
6,611
|
|
|
10.0
|
%
|
|
|
(a)
|
Represents total
depreciation and amortization, including amounts classified within
Depreciation and Amortization and within Cost of Sales on our
Consolidated Statements of Operations.
|
We have also disclosed after-tax return on invested capital from
continuing operations (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
|
|
|
(dollars in
millions)
|
|
|
|
|
|
|
Trailing Twelve
Months
|
|
|
Numerator
|
|
February
1,
2020
|
|
February
2,
2019
|
|
|
Operating
income
|
|
$
|
4,658
|
|
|
$
|
4,110
|
|
|
|
+ Net other
income / (expense)
|
|
9
|
|
|
27
|
|
|
|
EBIT
|
|
4,667
|
|
|
4,137
|
|
|
|
+ Operating
lease interest (a)
|
|
86
|
|
|
83
|
|
|
|
- Income taxes
(b)
|
|
1,045
|
|
|
856
|
|
|
|
Net operating
profit after taxes
|
|
$
|
3,708
|
|
|
$
|
3,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
February
1,
2020
|
|
February
2,
2019
|
|
February
3,
2018
|
Current portion of
long-term debt and other borrowings
|
|
$
|
161
|
|
|
$
|
1,052
|
|
|
$
|
281
|
|
+ Noncurrent
portion of long-term debt
|
|
11,338
|
|
|
10,223
|
|
|
11,117
|
|
+ Shareholders'
investment
|
|
11,833
|
|
|
11,297
|
|
|
11,651
|
|
+ Operating
lease liabilities (c)
|
|
2,475
|
|
|
2,170
|
|
|
2,072
|
|
- Cash and cash
equivalents
|
|
2,577
|
|
|
1,556
|
|
|
2,643
|
|
Invested
capital
|
|
$
|
23,230
|
|
|
$
|
23,186
|
|
|
$
|
22,478
|
|
Average invested
capital (d)
|
|
$
|
23,208
|
|
|
$
|
22,832
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax return
on invested capital
|
|
16.0
|
%
|
|
14.7
|
%
|
|
|
|
|
(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 for continuing operations, which were 22.0
percent and 20.3 percent for the trailing twelve months ended
February 1, 2020, and February 2, 2019, respectively. For
the twelve months ended February 1, 2020, and February 2,
2019, includes tax effect of $1,026 million and $839 million,
respectively, related to EBIT and $19 million and $17 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 on the Consolidated Statements of Financial
Position.
|
(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.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/target-reports-fourth-quarter-and-full-year-2019-earnings-301014864.html
SOURCE Target Corporation