MINNEAPOLIS, May 20, 2020 /PRNewswire/ --
- First quarter comparable sales grew 10.8 percent, driven by
a 12.5 percent increase in average basket, as guests made fewer,
bigger shopping trips.
- Store comparable sales increased 0.9 percent. Digital
comparable sales grew 141 percent, accounting for 9.9 percentage
points of Target's comparable sales growth.
-
- Digital comparable sales accelerated every month in the
quarter, from 33 percent in February to 282 percent in
April.
- Stores fulfilled nearly 80 percent of Target's first-quarter
digital sales.
- Same-day services (Order Pick Up, Drive Up and Shipt) grew
278 percent and accounted for approximately 5 percentage points of
total Company comparable sales growth.
- The Company saw healthy market-share gains across all five
of its core merchandise categories.
- First quarter GAAP EPS from continuing operations were
$0.56, and Adjusted EPS1
were $0.59. This performance
reflected hundreds of millions of dollars of incremental team
member pay and benefits and investments to protect the health and
safety of guests and team members.
- For additional media materials, please visit:
https://corporate.target.com/article/2020/05/q1-2020-earnings
Target Corporation (NYSE: TGT) today announced its first-quarter
2020 results, which reflect the impact of rapidly-evolving shopping
patterns and significant investments in response to the COVID-19
pandemic. The Company reported GAAP earnings per share (EPS)
from continuing operations of $0.56
in first quarter, compared with $1.53
in 2019. First quarter Adjusted EPS were $0.59, compared with $1.53 in 2019. The attached tables provide a
reconciliation of non-GAAP to GAAP measures. All earnings per share
figures refer to diluted EPS.
"Throughout the first quarter, our team and guests faced
unprecedented challenges arising from the spread of COVID-19. In
the face of those challenges, our team showed extraordinary
resilience as guests relied on Target as a trusted resource for
their families. With our stores at the center of our strategy, and
a significant investment in the safety of our team and guests, our
operations had the agility and flexibility needed to meet the
changing needs of our business," said Brian
Cornell, chairman and chief executive officer of Target
Corporation. "With the dedication of our team, the benefit of a
sustainable business model and a strong balance sheet, we are
confident Target will emerge from this crisis an even stronger
retailer, with higher affinity and trust from our guests."
Fiscal 2020 Guidance
On March 25th, the Company
withdrew its first quarter and full-year guidance given the
unusually wide range of potential outcomes as a result of the
highly fluid and uncertain outlook for consumer shopping patterns
and government policies related to COVID-19. As a result of
continued uncertainty, the Company did not provide second-quarter
or updated full-year guidance.
Operating
Results
The Company's total comparable sales grew 10.8 percent in the
first quarter, reflecting comparable digital sales growth of 141
percent. Total revenue of $19.6
billion grew 11.3 percent compared with last year,
reflecting sales growth of 11.3 percent and a 7.7 percent increase
in other revenue. Operating income was $468
million in first quarter 2020, down 58.7 percent from
$1,135 million in 2019.
First quarter operating income margin rate was 2.4 percent in
2020 compared with 6.4 percent in 2019. First quarter gross margin
rate was 25.1 percent, compared with 29.6 percent in
2019. This decrease reflected the net impact of actions taken
by the Company's merchandising teams, including costs and inventory
impairments related to the rapid slowdown in Apparel &
Accessories sales, unfavorable category mix as guests stocked up on
lower-margin categories like Essentials and Food & Beverage,
and higher digital and supply chain costs, driven by unusually
strong digital volume as well as investments in team member wages
and benefits. First quarter SG&A expense rate was 20.7 percent
in 2020, compared with 20.8 percent in 2019. First quarter
SG&A results reflected higher compensation costs,
including investments in wages and benefits, which were more than
offset by the net impact of other factors, including leverage from
strong sales growth.
Interest Expense and Taxes from Continuing Operations
The Company's first quarter 2020 net interest expense was
$117 million, compared with
$126 million last year, reflecting
lower average floating benchmark interest rates associated with the
Company's debt portfolio.
First quarter 2020 effective income tax rate from continuing
operations was 13.9 percent, compared with 22.4 percent last year.
First quarter 2020 effective income tax rate from continuing
operations reflects the impact of lower pre-tax earnings and a
larger impact from discrete tax benefits compared with last
year.
Shareholder Returns
The Company returned $941 million
to shareholders in first quarter 2020, including:
- Dividends of $332 million,
compared with $330 million in first
quarter 2019, reflecting a decline in share count offset by a 3.1
percent increase in the dividend per share.
- Share repurchases totaling $609
million that retired 5.7 million shares of common stock at
an average price of $107.58.
Early in the first quarter, the Company exhausted the remaining
capacity under the $5 billion share
repurchase program approved in 2016 and began repurchasing shares
under the new $5 billion repurchase
program approved by Target's Board of Directors in September 2019. As of the end of the first
quarter, the Company had approximately $4.5
billion of remaining capacity under the 2019 repurchase
program.
On March 25, 2020, the Company
announced that it had suspended share repurchase activity as a
result of the current environment and the Company's commitment to
maintain its strong investment-grade credit ratings.
For the trailing twelve months through first quarter 2020,
after-tax return on invested capital (ROIC) was 13.4 percent,
compared with 14.3 percent for the twelve months through first
quarter 2019. The tables of this release provide additional
information about the Company's ROIC calculation.
Webcast Details
Target will webcast its first quarter earnings conference call
at 7:00 a.m. CT 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. The replay number is
800-391-9851.
Miscellaneous
Statements in this release regarding the Company's future
financial performance and future effects of COVID-19 on the
Company's business 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. 1, 2020 and Item 7.01 of the Company's Form
8-K filed on May 20, 2020.
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 nearly 1,900 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.
For more on the Target Foundation, click here.
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
|
|
|
|
(millions, except per share data) (unaudited)
|
|
May 2,
2020
|
|
May 4,
2019
|
|
Change
|
|
Sales
|
|
$
|
19,371
|
|
|
$
|
17,401
|
|
|
11.3
|
%
|
|
Other
revenue
|
|
244
|
|
|
226
|
|
|
7.7
|
|
|
Total
revenue
|
|
19,615
|
|
|
17,627
|
|
|
11.3
|
|
|
Cost of
sales
|
|
14,510
|
|
|
12,248
|
|
|
18.5
|
|
|
Selling, general and
administrative expenses
|
|
4,060
|
|
|
3,663
|
|
|
10.9
|
|
|
Depreciation and
amortization (exclusive of depreciation included in cost of
sales)
|
|
577
|
|
|
581
|
|
|
(0.8)
|
|
|
Operating
income
|
|
468
|
|
|
1,135
|
|
|
(58.7)
|
|
|
Net interest
expense
|
|
117
|
|
|
126
|
|
|
(6.8)
|
|
|
Net other (income) /
expense
|
|
22
|
|
|
(12)
|
|
|
(283.8)
|
|
|
Earnings from
continuing operations before income taxes
|
|
329
|
|
|
1,021
|
|
|
(67.8)
|
|
|
Provision for income
taxes
|
|
45
|
|
|
229
|
|
|
(80.0)
|
|
|
Net earnings from
continuing operations
|
|
284
|
|
|
792
|
|
|
(64.2)
|
|
|
Discontinued
operations, net of tax
|
|
—
|
|
|
3
|
|
|
|
|
Net
earnings
|
|
$
|
284
|
|
|
$
|
795
|
|
|
(64.3)
|
%
|
|
Basic earnings per
share
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.57
|
|
|
$
|
1.54
|
|
|
(63.2)
|
%
|
|
Discontinued
operations
|
|
—
|
|
|
—
|
|
|
|
|
Net earnings per
share
|
|
$
|
0.57
|
|
|
$
|
1.54
|
|
|
(63.3)
|
%
|
|
Diluted earnings per
share
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.56
|
|
|
$
|
1.53
|
|
|
(63.3)
|
%
|
|
Discontinued
operations
|
|
—
|
|
|
—
|
|
|
|
|
Net earnings per
share
|
|
$
|
0.56
|
|
|
$
|
1.53
|
|
|
(63.4)
|
%
|
|
Weighted average
common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
|
501.0
|
|
|
515.7
|
|
|
(2.8)
|
%
|
|
Diluted
|
|
505.8
|
|
|
519.5
|
|
|
(2.6)
|
%
|
|
Antidilutive
shares
|
|
0.2
|
|
|
0.1
|
|
|
|
|
Dividends declared
per share
|
|
$
|
0.66
|
|
|
$
|
0.64
|
|
|
3.1
|
%
|
|
|
Note: Per share
amounts may not foot due to rounding.
|
TARGET
CORPORATION
|
|
Consolidated
Statements of Financial Position
|
(millions, except
footnotes) (unaudited)
|
|
May 2,
2020
|
|
February
1,
2020
|
|
May 4,
2019
|
Assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
4,566
|
|
|
$
|
2,577
|
|
|
$
|
1,173
|
|
Inventory
|
|
8,584
|
|
|
8,992
|
|
|
9,060
|
|
Other current
assets
|
|
1,465
|
|
|
1,333
|
|
|
1,374
|
|
Total current
assets
|
|
14,615
|
|
|
12,902
|
|
|
11,607
|
|
Property and
equipment
|
|
|
|
|
|
|
Land
|
|
6,034
|
|
|
6,036
|
|
|
6,061
|
|
Buildings and
improvements
|
|
30,756
|
|
|
30,603
|
|
|
29,573
|
|
Fixtures and
equipment
|
|
5,486
|
|
|
6,083
|
|
|
5,401
|
|
Computer hardware and
software
|
|
2,597
|
|
|
2,692
|
|
|
2,553
|
|
Construction-in-progress
|
|
803
|
|
|
533
|
|
|
574
|
|
Accumulated
depreciation
|
|
(19,087)
|
|
|
(19,664)
|
|
|
(18,456)
|
|
Property and
equipment, net
|
|
26,589
|
|
|
26,283
|
|
|
25,706
|
|
Operating lease
assets
|
|
2,235
|
|
|
2,236
|
|
|
2,019
|
|
Other noncurrent
assets
|
|
1,367
|
|
|
1,358
|
|
|
1,287
|
|
Total
assets
|
|
$
|
44,806
|
|
|
$
|
42,779
|
|
|
$
|
40,619
|
|
Liabilities and
shareholders' investment
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
9,625
|
|
|
$
|
9,920
|
|
|
$
|
8,360
|
|
Accrued and other
current liabilities
|
|
4,619
|
|
|
4,406
|
|
|
3,823
|
|
Current portion of
long-term debt and other borrowings
|
|
168
|
|
|
161
|
|
|
1,056
|
|
Total current
liabilities
|
|
14,412
|
|
|
14,487
|
|
|
13,239
|
|
Long-term debt and
other borrowings
|
|
14,073
|
|
|
11,338
|
|
|
11,357
|
|
Noncurrent operating
lease liabilities
|
|
2,249
|
|
|
2,275
|
|
|
2,064
|
|
Deferred income
taxes
|
|
1,122
|
|
|
1,122
|
|
|
1,034
|
|
Other noncurrent
liabilities
|
|
1,781
|
|
|
1,724
|
|
|
1,808
|
|
Total noncurrent
liabilities
|
|
19,225
|
|
|
16,459
|
|
|
16,263
|
|
Shareholders'
investment
|
|
|
|
|
|
|
Common
stock
|
|
42
|
|
|
42
|
|
|
43
|
|
Additional paid-in
capital
|
|
6,206
|
|
|
6,226
|
|
|
5,908
|
|
Retained
earnings
|
|
5,775
|
|
|
6,433
|
|
|
5,958
|
|
Accumulated other
comprehensive loss
|
|
(854)
|
|
|
(868)
|
|
|
(792)
|
|
Total shareholders'
investment
|
|
11,169
|
|
|
11,833
|
|
|
11,117
|
|
Total liabilities
and shareholders' investment
|
|
$
|
44,806
|
|
|
$
|
42,779
|
|
|
$
|
40,619
|
|
|
Common
Stock Authorized 6,000,000,000 shares, $0.0833 par value;
499,919,691, 504,198,962 and 512,312,434 shares issued and
outstanding as of May 2, 2020, February 1, 2020, and
May 4, 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
|
|
|
Three Months
Ended
|
(millions) (unaudited)
|
|
May 2,
2020
|
|
May 4,
2019
|
Operating
activities
|
|
|
|
|
Net
earnings
|
|
$
|
284
|
|
|
$
|
795
|
|
Earnings from
discontinued operations, net of tax
|
|
—
|
|
|
3
|
|
Net earnings from
continuing operations
|
|
284
|
|
|
792
|
|
Adjustments to
reconcile net earnings to cash provided by operations:
|
|
|
|
|
Depreciation and
amortization
|
|
641
|
|
|
644
|
|
Share-based
compensation expense
|
|
49
|
|
|
46
|
|
Deferred income
taxes
|
|
(4)
|
|
|
59
|
|
Noncash losses /
(gains) and other, net
|
|
5
|
|
|
10
|
|
Changes in operating
accounts:
|
|
|
|
|
Inventory
|
|
408
|
|
|
438
|
|
Other
assets
|
|
11
|
|
|
17
|
|
Accounts
payable
|
|
(280)
|
|
|
(1,402)
|
|
Accrued and other
liabilities
|
|
170
|
|
|
(281)
|
|
Cash provided by
operations
|
|
1,284
|
|
|
323
|
|
Investing
activities
|
|
|
|
|
Expenditures for
property and equipment
|
|
(751)
|
|
|
(655)
|
|
Proceeds from disposal
of property and equipment
|
|
6
|
|
|
5
|
|
Other
investments
|
|
1
|
|
|
1
|
|
Cash required for
investing activities
|
|
(744)
|
|
|
(649)
|
|
Financing
activities
|
|
|
|
|
Additions to long-term
debt
|
|
2,480
|
|
|
994
|
|
Reductions of
long-term debt
|
|
(17)
|
|
|
(13)
|
|
Dividends
paid
|
|
(332)
|
|
|
(330)
|
|
Repurchase of
stock
|
|
(686)
|
|
|
(320)
|
|
Accelerated share
repurchase pending final settlement
|
|
—
|
|
|
(400)
|
|
Stock option
exercises
|
|
4
|
|
|
12
|
|
Cash provided by /
(required for) financing activities
|
|
1,449
|
|
|
(57)
|
|
Net increase /
(decrease) in cash and cash equivalents
|
|
1,989
|
|
|
(383)
|
|
Cash and cash
equivalents at beginning of period
|
|
2,577
|
|
|
1,556
|
|
Cash and cash
equivalents at end of period
|
|
$
|
4,566
|
|
|
$
|
1,173
|
|
TARGET
CORPORATION
|
|
Operating
Results
|
Rate
Analysis
|
|
Three Months
Ended
|
(unaudited)
|
|
May 2,
2020
|
|
May 4,
2019
|
Gross margin
rate
|
|
25.1
|
%
|
|
29.6
|
%
|
SG&A expense
rate
|
|
20.7
|
|
|
20.8
|
|
Depreciation and
amortization (exclusive of depreciation included in cost of sales)
expense rate
|
|
2.9
|
|
|
3.3
|
|
Operating income
margin rate
|
|
2.4
|
|
|
6.4
|
|
|
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 $166
million and $160 million of profit-sharing income under our credit
card program agreement for the three months ended May 2, 2020,
and May 4, 2019, respectively.
|
|
Comparable
Sales
|
|
Three Months Ended
|
(unaudited)
|
|
May 2,
2020
|
|
May 4,
2019
|
Comparable sales
change
|
|
10.8
|
%
|
|
4.8
|
%
|
Drivers of change in
comparable sales:
|
|
|
|
|
Number of
transactions
|
|
(1.5)
|
|
|
4.3
|
|
Average transaction
amount
|
|
12.5
|
|
|
0.5
|
|
|
Note: Amounts may not
foot due to rounding.
|
|
Contribution to
Comparable Sales Change
|
|
Three Months Ended
|
(unaudited)
|
|
May 2,
2020
|
|
May 4,
2019
|
Stores originated
channel comparable sales change
|
|
0.9
|
%
|
|
2.7
|
%
|
Contribution from
digitally originated sales to comparable sales change
|
|
9.9
|
|
|
2.1
|
|
Total comparable
sales change
|
|
10.8
|
%
|
|
4.8
|
%
|
|
Note: Amounts may not
foot due to rounding.
|
|
Sales by
Channel
|
|
Three Months Ended
|
(unaudited)
|
|
May 2,
2020
|
|
May 4,
2019
|
Stores
originated
|
|
84.7
|
%
|
|
92.9
|
%
|
Digitally
originated
|
|
15.3
|
|
|
7.1
|
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
RedCard
Penetration
|
|
Three Months
Ended
|
(unaudited)
|
|
May 2,
2020
|
|
May 4,
2019
|
Target Debit
Card
|
|
12.7
|
%
|
|
13.1
|
%
|
Target Credit
Cards
|
|
9.7
|
|
|
10.4
|
|
Total RedCard
Penetration
|
|
22.4
|
%
|
|
23.5
|
%
|
|
Note: Amounts may not
foot due to rounding.
|
|
Number of Stores
and Retail Square Feet
|
|
Number of
Stores
|
|
Retail Square Feet
(a)
|
(unaudited)
|
|
May 2,
2020
|
|
February
1,
2020
|
|
May 4,
2019
|
|
May 2,
2020
|
|
February
1,
2020
|
|
May 4,
2019
|
170,000 or more sq.
ft.
|
|
272
|
|
|
272
|
|
|
272
|
|
|
48,613
|
|
|
48,619
|
|
|
48,603
|
|
50,000 to 169,999 sq.
ft.
|
|
1,505
|
|
|
1,505
|
|
|
1,501
|
|
|
189,226
|
|
|
189,227
|
|
|
188,918
|
|
49,999 or less sq.
ft.
|
|
94
|
|
|
91
|
|
|
78
|
|
|
2,745
|
|
|
2,670
|
|
|
2,276
|
|
Total
|
|
1,871
|
|
|
1,868
|
|
|
1,851
|
|
|
240,584
|
|
|
240,516
|
|
|
239,797
|
|
|
|
(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,
limiting the usefulness of the measure for comparisons with other
companies.
|
|
Reconciliation of
Non-GAAP
Adjusted EPS
|
|
Three Months
Ended
|
|
|
|
May 2,
2020
|
|
May 4,
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
|
|
|
|
|
|
$
|
0.56
|
|
|
|
|
|
|
$
|
1.53
|
|
|
(63.3)
|
%
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on investment
(a)
|
|
$
|
21
|
|
|
$
|
15
|
|
|
$
|
0.03
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Adjusted diluted
earnings per share from continuing operations
|
|
|
|
|
|
$
|
0.59
|
|
|
|
|
|
|
$
|
1.53
|
|
|
(61.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Amounts may not
foot due to rounding.
|
(a)
|
Includes an
unrealized loss on our investment in Casper Sleep Inc., which is
not core to our continuing 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
|
|
|
(dollars in
millions) (unaudited)
|
|
May 2,
2020
|
|
May 4,
2019
|
|
Change
|
Net earnings from
continuing operations
|
|
$
|
284
|
|
|
$
|
792
|
|
|
(64.2)
|
%
|
+ Provision for
income taxes
|
|
45
|
|
|
229
|
|
|
(80.0)
|
|
+ Net interest
expense
|
|
117
|
|
|
126
|
|
|
(6.8)
|
|
EBIT
|
|
$
|
446
|
|
|
$
|
1,147
|
|
|
(61.1)
|
%
|
+ Total
depreciation and amortization (a)
|
|
641
|
|
|
644
|
|
|
(0.6)
|
|
EBITDA
|
|
$
|
1,087
|
|
|
$
|
1,791
|
|
|
(39.3)
|
%
|
|
|
(a)
|
Represents total
depreciation and amortization, including amounts classified within
Depreciation and Amortization and within Cost of Sales.
|
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
|
|
May 2,
2020
|
|
|
May 4,
2019
|
|
|
|
Operating
income
|
|
$
|
3,992
|
|
|
$
|
4,204
|
|
|
|
+ Net other
income / (expense)
|
|
(26)
|
|
|
33
|
|
|
|
EBIT
|
|
3,966
|
|
|
4,237
|
|
|
|
+ Operating
lease interest (a)
|
|
87
|
|
|
84
|
|
|
|
- Income taxes
(b)
|
|
855
|
|
|
878
|
|
|
|
Net operating
profit after taxes
|
|
$
|
3,198
|
|
|
$
|
3,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
May 2,
2020
|
|
|
May 4,
2019
|
|
|
May 5,
2018
|
|
Current portion of
long-term debt and other borrowings
|
|
$
|
168
|
|
|
$
|
1,056
|
|
|
$
|
283
|
|
+ Noncurrent
portion of long-term debt
|
|
14,073
|
|
|
11,357
|
|
|
11,107
|
|
+ Shareholders'
investment
|
|
11,169
|
|
|
11,117
|
|
|
11,158
|
|
+ Operating
lease liabilities (c)
|
|
2,448
|
|
|
2,231
|
|
|
2,157
|
|
- Cash and cash
equivalents
|
|
4,566
|
|
|
1,173
|
|
|
1,060
|
|
Invested
capital
|
|
$
|
23,292
|
|
|
$
|
24,588
|
|
|
$
|
23,645
|
|
Average invested
capital (d)
|
|
$
|
23,940
|
|
|
$
|
24,116
|
|
|
|
|
|
After-tax return
on invested capital
|
|
|
13.4
|
%
|
|
|
14.3
|
%
|
|
|
|
|
(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 21.1
percent and 20.3 percent for the trailing twelve months ended
May 2, 2020, and May 4, 2019, respectively. For the
twelve months ended May 2, 2020, and May 4, 2019,
includes tax effect of $837 million and $861 million,
respectively, related to EBIT and $18 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.
|
(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.
|
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SOURCE Target Corporation