MINNEAPOLIS, Nov. 17, 2021 /PRNewswire/ --
- Third quarter comparable sales grew 12.7 percent, on top of
20.7 percent growth last year.
-
- Comparable sales growth was driven entirely by
traffic.
- Store comparable sales increased 9.7 percent, on top of 9.9
percent growth last year.
- Digital comparable sales grew 29 percent, following growth
of 155 percent last year.
- Same-day services (Order Pickup, Drive Up and Shipt) grew
nearly 60 percent this year, on top of 200 percent last
year.
- More than 95 percent of Target's third quarter sales were
fulfilled by its stores.
- All five core merchandise categories delivered double-digit
comparable sales growth, on top of strong sales performance last
year.
- Third quarter GAAP EPS of $3.04 was 51.6 percent higher than last year, and
Adjusted EPS1 of $3.03 was
8.7 percent higher than last year. Third quarter GAAP and Adjusted
EPS have both more than doubled since Q3 2019.
- For additional media materials, please visit:
https://corporate.target.com/article/2021/11/q3-2021-earnings
Target Corporation (NYSE: TGT) today announced its third quarter
2021 financial results, which reflected growth in both sales and
profitability on top of record increases a year ago. The Company
reported third quarter GAAP earnings per share (EPS) of
$3.04, up 51.6 percent from
$2.01 in 2020. Third quarter Adjusted
EPS of $3.03 grew 8.7 percent
compared with $2.79 in 2020. The
attached tables provide a reconciliation of non-GAAP to GAAP
measures. All earnings per share figures refer to diluted EPS.
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.
|
"The consistently strong growth we're seeing in our business,
quarter after quarter, is a testament to the passion and commitment
our team brings to serving our guests, and the trust we've built
with them as a result," said Brian
Cornell, chairman and chief executive officer of Target
Corporation.
"Following comp growth of nearly 21 percent a year ago, our
third quarter comp increase of 12.7 percent was driven entirely by
traffic, and reflects continued strength in our store sales,
same-day digital fulfillment services and double-digit growth in
all five of our core merchandising categories. With a strong
inventory position heading into the peak of the holiday season, our
team and our business are ready to serve our guests and poised to
deliver continued, strong growth, through the holiday season and
beyond."
Fiscal 2021 Guidance
For the fourth quarter 2021, the Company expects high-single
digit to low-double digit growth in comparable sales, compared with
the previous guidance for a high-single digit increase.
The Company continues to expect its full-year operating income
margin rate will be 8 percent or higher.
Operating Results
Comparable sales grew 12.7 percent in the third quarter,
reflecting comparable store sales growth of 9.7 percent and
comparable digital sales growth of 29 percent. Total revenue of
$25.7 billion grew 13.3 percent
compared with last year, driven by total sales growth of 13.2
percent and a 22.3 percent increase in other revenue. Operating
income was $2.0 billion in third
quarter 2021, up 3.9 percent from $1.9
billion in 2020.
Third quarter operating income margin rate was 7.8 percent in
2021 compared with 8.5 percent in 2020. Third quarter gross margin
rate was 28.0 percent, compared with 30.6 percent in 2020. This
year's gross margin rate reflected pressure from higher merchandise
and freight costs, increased inventory shrink, and increased supply
chain costs from increased compensation and headcount in the
Company's distribution centers. These pressures were
partially offset by a slight benefit from favorable category mix.
Third quarter SG&A expense rate was 18.9 percent in 2021,
compared with 20.5 percent in 2020, driven by leverage on strong
revenue growth.
Interest Expense and Taxes
The Company's third quarter 2021 net interest expense was
$105 million, compared with
$632 million last year, which
included a $512 million loss on early
debt retirement.
Third quarter 2021 effective income tax rate was 22.1 percent,
in line with the prior year rate of 21.9 percent.
Capital Deployment and Return on Invested Capital
The Company paid dividends of $440
million in the third quarter, compared with $340 million last year, reflecting a 32.4 percent
increase in the dividend per share, partially offset by a decline
in average share count.
The Company repurchased $2.2
billion worth of its shares in third quarter 2021, retiring
8.8 million shares of common stock at an average price of
$246.80. As of the end of the
third quarter, the Company had approximately $14.6 billion of remaining capacity under the
repurchase program approved by Target's Board of Directors in
August 2021.
For the trailing twelve months through third quarter 2021,
after-tax return on invested capital (ROIC) was 31.3 percent,
compared with 19.9 percent for the trailing twelve months through
third quarter 2020. The increase in ROIC was driven primarily by
increased profitability. The tables in this release provide
additional information about the Company's ROIC
calculation.
Webcast Details
Target will webcast its third 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 (click on link under "Upcoming Events"). A
replay of the webcast will be provided when available. The replay
number is 1-866-461-2736.
Miscellaneous
Statements in this release regarding fourth quarter comparable
sales growth and full year operating margin rates 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
actions 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 January 30,
2021. 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 1,900 stores and
at Target.com, with the purpose of helping all families discover
the joy of everyday life. Since 1946, Target has given 5% of its
profit to communities, which today equals millions of dollars a
week. Additional company information can be found by visiting its
corporate website and press center and by following
@TargetNews.
For more on the Target Foundation, click here.
TARGET
CORPORATION
|
|
Consolidated
Statements of Operations
|
|
|
Three Months Ended
|
|
|
|
Nine Months
Ended
|
|
|
(millions, except per share data) (unaudited)
|
|
October 30,
2021
|
|
October 31,
2020
|
|
Change
|
|
October 30,
2021
|
|
October 31,
2020
|
|
Change
|
Sales
|
|
$
|
25,290
|
|
|
$
|
22,336
|
|
|
13.2
|
%
|
|
$
|
73,995
|
|
|
$
|
64,403
|
|
|
14.9
|
%
|
Other
revenue
|
|
362
|
|
|
296
|
|
|
22.3
|
|
|
1,014
|
|
|
819
|
|
|
23.9
|
|
Total
revenue
|
|
25,652
|
|
|
22,632
|
|
|
13.3
|
|
|
75,009
|
|
|
65,222
|
|
|
15.0
|
|
Cost of
sales
|
|
18,206
|
|
|
15,509
|
|
|
17.4
|
|
|
52,202
|
|
|
45,692
|
|
|
14.2
|
|
Selling, general and
administrative expenses
|
|
4,859
|
|
|
4,647
|
|
|
4.6
|
|
|
14,217
|
|
|
13,167
|
|
|
8.0
|
|
Depreciation and
amortization (exclusive of depreciation included in cost of
sales)
|
|
577
|
|
|
541
|
|
|
6.4
|
|
|
1,739
|
|
|
1,660
|
|
|
4.8
|
|
Operating
income
|
|
2,010
|
|
|
1,935
|
|
|
3.9
|
|
|
6,851
|
|
|
4,703
|
|
|
45.7
|
|
Net interest
expense
|
|
105
|
|
|
632
|
|
|
(83.2)
|
|
|
317
|
|
|
871
|
|
|
(63.5)
|
|
Net other (income) /
expense
|
|
(6)
|
|
|
5
|
|
|
NM(a)
|
|
(356)
|
|
|
16
|
|
|
NM(a)
|
Earnings before
income taxes
|
|
1,911
|
|
|
1,298
|
|
|
47.2
|
|
|
6,890
|
|
|
3,816
|
|
|
80.6
|
|
Provision for income
taxes
|
|
423
|
|
|
284
|
|
|
48.7
|
|
|
1,488
|
|
|
828
|
|
|
79.7
|
|
Net
earnings
|
|
$
|
1,488
|
|
|
$
|
1,014
|
|
|
46.8
|
%
|
|
$
|
5,402
|
|
|
$
|
2,988
|
|
|
80.8
|
%
|
Basic earnings per
share
|
|
$
|
3.07
|
|
|
$
|
2.02
|
|
|
51.6
|
%
|
|
$
|
10.97
|
|
|
$
|
5.97
|
|
|
83.8
|
%
|
Diluted earnings per
share
|
|
$
|
3.04
|
|
|
$
|
2.01
|
|
|
51.6
|
%
|
|
$
|
10.87
|
|
|
$
|
5.91
|
|
|
83.9
|
%
|
Weighted average
common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
484.8
|
|
|
500.6
|
|
|
(3.1)
|
%
|
|
492.2
|
|
|
500.6
|
|
|
(1.7)
|
%
|
Diluted
|
|
489.4
|
|
|
505.4
|
|
|
(3.2)
|
%
|
|
496.8
|
|
|
505.2
|
|
|
(1.7)
|
%
|
Antidilutive
shares
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
|
Dividends declared
per share
|
|
$
|
0.90
|
|
|
$
|
0.68
|
|
|
32.4
|
%
|
|
$
|
2.48
|
|
|
$
|
2.02
|
|
|
22.8
|
%
|
TARGET
CORPORATION
|
|
Consolidated
Statements of Financial Position
|
(millions, except
footnotes) (unaudited)
|
|
October 30,
2021
|
|
January 30,
2021
|
|
October 31,
2020
|
Assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
5,753
|
|
|
$
|
8,511
|
|
|
$
|
5,996
|
|
Inventory
|
|
14,958
|
|
|
10,653
|
|
|
12,712
|
|
Other current
assets
|
|
1,865
|
|
|
1,592
|
|
|
1,601
|
|
Total current
assets
|
|
22,576
|
|
|
20,756
|
|
|
20,309
|
|
Property and
equipment
|
|
|
|
|
|
|
Land
|
|
6,146
|
|
|
6,141
|
|
|
6,063
|
|
Buildings and
improvements
|
|
32,478
|
|
|
31,557
|
|
|
31,398
|
|
Fixtures and
equipment
|
|
6,144
|
|
|
5,914
|
|
|
5,843
|
|
Computer hardware and
software
|
|
2,447
|
|
|
2,765
|
|
|
2,706
|
|
Construction-in-progress
|
|
1,302
|
|
|
780
|
|
|
518
|
|
Accumulated
depreciation
|
|
(20,602)
|
|
|
(20,278)
|
|
|
(19,755)
|
|
Property and
equipment, net
|
|
27,915
|
|
|
26,879
|
|
|
26,773
|
|
Operating lease
assets
|
|
2,539
|
|
|
2,227
|
|
|
2,208
|
|
Other noncurrent
assets
|
|
1,381
|
|
|
1,386
|
|
|
1,371
|
|
Total
assets
|
|
$
|
54,411
|
|
|
$
|
51,248
|
|
|
$
|
50,661
|
|
Liabilities and
shareholders' investment
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
16,250
|
|
|
$
|
12,859
|
|
|
$
|
14,203
|
|
Accrued and other
current liabilities
|
|
5,925
|
|
|
6,122
|
|
|
5,023
|
|
Current portion of
long-term debt and other borrowings
|
|
1,176
|
|
|
1,144
|
|
|
131
|
|
Total current
liabilities
|
|
23,351
|
|
|
20,125
|
|
|
19,357
|
|
Long-term debt and
other borrowings
|
|
11,586
|
|
|
11,536
|
|
|
12,490
|
|
Noncurrent operating
lease liabilities
|
|
2,494
|
|
|
2,218
|
|
|
2,196
|
|
Deferred income
taxes
|
|
1,246
|
|
|
990
|
|
|
1,171
|
|
Other noncurrent
liabilities
|
|
1,931
|
|
|
1,939
|
|
|
2,128
|
|
Total noncurrent
liabilities
|
|
17,257
|
|
|
16,683
|
|
|
17,985
|
|
Shareholders'
investment
|
|
|
|
|
|
|
Common
stock
|
|
40
|
|
|
42
|
|
|
42
|
|
Additional paid-in
capital
|
|
6,381
|
|
|
6,329
|
|
|
6,285
|
|
Retained
earnings
|
|
8,069
|
|
|
8,825
|
|
|
7,789
|
|
Accumulated other
comprehensive loss
|
|
(687)
|
|
|
(756)
|
|
|
(797)
|
|
Total shareholders'
investment
|
|
13,803
|
|
|
14,440
|
|
|
13,319
|
|
Total liabilities
and shareholders' investment
|
|
$
|
54,411
|
|
|
$
|
51,248
|
|
|
$
|
50,661
|
|
Common Stock Authorized 6,000,000,000 shares,
$0.0833 par value; 480,905,493,
500,877,129 and 500,754,729 shares issued and outstanding as of
October 30, 2021, January 30, 2021, and October 31,
2020, 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
|
|
|
Nine Months
Ended
|
(millions) (unaudited)
|
|
October 30,
2021
|
|
October 31,
2020
|
Operating
activities
|
|
|
|
|
Net
earnings
|
|
$
|
5,402
|
|
|
$
|
2,988
|
|
Adjustments to
reconcile net earnings to cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
1,952
|
|
|
1,848
|
|
Share-based
compensation expense
|
|
187
|
|
|
161
|
|
Deferred income
taxes
|
|
233
|
|
|
26
|
|
Gain on Dermstore
sale
|
|
(335)
|
|
|
—
|
|
Loss on debt
extinguishment
|
|
—
|
|
|
512
|
|
Noncash losses /
(gains) and other, net
|
|
18
|
|
|
124
|
|
Changes in operating
accounts:
|
|
|
|
|
Inventory
|
|
(4,305)
|
|
|
(3,720)
|
|
Other
assets
|
|
(117)
|
|
|
(174)
|
|
Accounts
payable
|
|
3,284
|
|
|
4,287
|
|
Accrued and other
liabilities
|
|
(722)
|
|
|
992
|
|
Cash provided by
operating activities
|
|
5,597
|
|
|
7,044
|
|
Investing
activities
|
|
|
|
|
Expenditures for
property and equipment
|
|
(2,483)
|
|
|
(2,009)
|
|
Proceeds from disposal
of property and equipment
|
|
23
|
|
|
27
|
|
Proceeds from
Dermstore sale
|
|
356
|
|
|
—
|
|
Other
investments
|
|
14
|
|
|
(3)
|
|
Cash required for
investing activities
|
|
(2,090)
|
|
|
(1,985)
|
|
Financing
activities
|
|
|
|
|
Additions to long-term
debt
|
|
—
|
|
|
2,480
|
|
Reductions of
long-term debt
|
|
(112)
|
|
|
(2,395)
|
|
Dividends
paid
|
|
(1,116)
|
|
|
(1,002)
|
|
Repurchase of
stock
|
|
(5,042)
|
|
|
(741)
|
|
Stock option
exercises
|
|
5
|
|
|
18
|
|
Cash required for
financing activities
|
|
(6,265)
|
|
|
(1,640)
|
|
Net (decrease) /
increase in cash and cash equivalents
|
|
(2,758)
|
|
|
3,419
|
|
Cash and cash
equivalents at beginning of period
|
|
8,511
|
|
|
2,577
|
|
Cash and cash
equivalents at end of period
|
|
$
|
5,753
|
|
|
$
|
5,996
|
|
TARGET
CORPORATION
|
|
Operating
Results
|
|
Rate
Analysis
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(unaudited)
|
|
October 30,
2021
|
|
October 31,
2020
|
|
October 30,
2021
|
|
October 31,
2020
|
Gross margin
rate
|
|
28.0
|
%
|
|
30.6
|
%
|
|
29.5
|
%
|
|
29.1
|
%
|
SG&A expense
rate
|
|
18.9
|
|
|
20.5
|
|
|
19.0
|
|
|
20.2
|
|
Depreciation and
amortization (exclusive of depreciation included in cost of sales)
expense rate
|
|
2.2
|
|
|
2.4
|
|
|
2.3
|
|
|
2.5
|
|
Operating income
margin rate
|
|
7.8
|
|
|
8.5
|
|
|
9.1
|
|
|
7.2
|
|
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 $184
million and $527 million of profit-sharing income under our
credit card program agreement for the three and nine months ended
October 30, 2021, respectively, and $164 million and
$488 million for the three and nine months ended
October 31, 2020, respectively.
|
|
Comparable
Sales
|
|
Three Months Ended
|
|
Nine Months
Ended
|
(unaudited)
|
|
October 30,
2021
|
|
October 31,
2020
|
|
October 30,
2021
|
|
October 31,
2020
|
Comparable sales
change
|
|
12.7
|
%
|
|
20.7
|
%
|
|
14.4
|
%
|
|
18.7
|
%
|
Drivers of change in
comparable sales
|
|
|
|
|
|
|
|
|
Number of
transactions
|
|
12.9
|
|
|
4.5
|
|
|
14.0
|
|
|
2.6
|
|
Average transaction
amount
|
|
(0.2)
|
|
|
15.6
|
|
|
0.3
|
|
|
15.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Sales
by Channel
|
Three Months Ended
|
|
Nine Months
Ended
|
(unaudited)
|
October 30,
2021
|
|
October 31,
2020
|
|
October 30,
2021
|
|
October 31,
2020
|
Stores originated
comparable sales change
|
9.7
|
%
|
|
9.9
|
%
|
|
11.9
|
%
|
|
7.3
|
%
|
Digitally originated
comparable sales change
|
28.9
|
|
|
154.5
|
|
|
27.8
|
|
|
163.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales by
Channel
|
|
Three Months Ended
|
|
Nine Months
Ended
|
(unaudited)
|
|
October 30,
2021
|
|
October 31,
2020
|
|
October 30,
2021
|
|
October 31,
2020
|
Stores
originated
|
|
82.4
|
%
|
|
84.3
|
%
|
|
82.3
|
%
|
|
83.9
|
%
|
Digitally
originated
|
|
17.6
|
|
|
15.7
|
|
|
17.7
|
|
|
16.1
|
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales by
Fulfillment Channel
|
|
Three Months Ended
|
|
Nine Months
Ended
|
(unaudited)
|
|
October 30,
2021
|
|
October 31,
2020
|
|
October 30,
2021
|
|
October 31,
2020
|
Stores
|
|
96.7
|
%
|
|
96.1
|
%
|
|
96.5
|
%
|
|
96.2
|
%
|
Other
|
|
3.3
|
|
|
3.9
|
|
|
3.5
|
|
|
3.8
|
|
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.
|
RedCard
Penetration
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(unaudited)
|
|
October 30,
2021
|
|
October 31,
2020
|
|
October 30,
2021
|
|
October 31,
2020
|
Target Debit
Card
|
|
11.7
|
%
|
|
12.2
|
%
|
|
11.8
|
%
|
|
12.2
|
%
|
Target Credit
Cards
|
|
8.9
|
|
|
9.3
|
|
|
8.7
|
|
|
9.2
|
|
Total RedCard
Penetration
|
|
20.7
|
%
|
|
21.5
|
%
|
|
20.5
|
%
|
|
21.4
|
%
|
Note: Amounts may not
foot due to rounding.
|
Number of Stores
and Retail Square Feet
|
|
Number of
Stores
|
|
Retail Square Feet
(a)
|
(unaudited)
|
|
October 30,
2021
|
|
January 30,
2021
|
|
October 31,
2020
|
|
October 30,
2021
|
|
January 30,
2021
|
|
October 31,
2020
|
170,000 or more sq.
ft.
|
|
274
|
|
|
273
|
|
|
273
|
|
|
49,071
|
|
|
48,798
|
|
|
48,798
|
|
50,000 to 169,999 sq.
ft.
|
|
1,515
|
|
|
1,509
|
|
|
1,509
|
|
|
190,116
|
|
|
189,508
|
|
|
189,508
|
|
49,999 or less sq.
ft.
|
|
135
|
|
|
115
|
|
|
115
|
|
|
3,952
|
|
|
3,342
|
|
|
3,342
|
|
Total
|
|
1,924
|
|
|
1,897
|
|
|
1,897
|
|
|
243,139
|
|
|
241,648
|
|
|
241,648
|
|
(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 (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, generally accepted accounting principles in
the United States (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
|
|
|
|
October 30,
2021
|
|
October 31,
2020
|
|
|
(millions, except
per share data) (unaudited)
|
|
Pretax
|
|
Net of Tax
|
|
Per Share
|
|
Pretax
|
|
Net of Tax
|
|
Per Share
|
|
Change
|
GAAP diluted earnings
per share
|
|
|
|
|
|
$
|
3.04
|
|
|
|
|
|
|
$
|
2.01
|
|
|
51.6
|
%
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on debt
extinguishment
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
512
|
|
|
$
|
379
|
|
|
$
|
0.75
|
|
|
|
Loss on investment
(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
9
|
|
|
0.02
|
|
|
|
Other
(b)
|
|
(9)
|
|
|
(7)
|
|
|
(0.01)
|
|
|
8
|
|
|
6
|
|
|
0.01
|
|
|
|
Adjusted diluted
earnings per share
|
|
|
|
|
|
$
|
3.03
|
|
|
|
|
|
|
$
|
2.79
|
|
|
8.7
|
%
|
|
|
|
|
|
Reconciliation of
Non-GAAP
Adjusted
EPS
|
|
Nine Months
Ended
|
|
|
|
October 30,
2021
|
|
October 31,
2020
|
|
|
(millions, except
per share data) (unaudited)
|
|
Pretax
|
|
Net of Tax
|
|
Per Share
|
|
Pretax
|
|
Net of Tax
|
|
Per Share
|
|
Change
|
GAAP diluted earnings
per share
|
|
|
|
|
|
$
|
10.87
|
|
|
|
|
|
|
$
|
5.91
|
|
|
83.9
|
%
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on Dermstore
sale
|
|
$
|
(335)
|
|
|
$
|
(269)
|
|
|
$
|
(0.54)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Loss on debt
extinguishment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
512
|
|
|
379
|
|
|
0.75
|
|
|
|
Loss on investment
(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
18
|
|
|
0.03
|
|
|
|
Other
(b)
|
|
27
|
|
|
20
|
|
|
0.04
|
|
|
33
|
|
|
24
|
|
|
0.05
|
|
|
|
Adjusted diluted
earnings per share
|
|
|
|
|
|
$
|
10.37
|
|
|
|
|
|
|
$
|
6.75
|
|
|
53.7
|
%
|
Note: Amounts may not
foot due to rounding.
|
(a)
|
Represented a loss on
our investment in Casper Sleep Inc., which was not core to our
operations. We sold this investment during the fourth quarter of
2020.
|
(b)
|
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
|
|
Three Months Ended
|
|
|
|
Nine Months
Ended
|
|
|
(dollars in
millions) (unaudited)
|
|
October 30,
2021
|
|
October 31,
2020
|
|
Change
|
|
October 30,
2021
|
|
October 31,
2020
|
|
Change
|
Net
earnings
|
|
$
|
1,488
|
|
|
$
|
1,014
|
|
|
46.8
|
%
|
|
$
|
5,402
|
|
|
$
|
2,988
|
|
|
80.8
|
%
|
+ Provision for
income taxes
|
|
423
|
|
|
284
|
|
|
48.7
|
|
|
1,488
|
|
|
828
|
|
|
79.7
|
|
+ Net interest
expense
|
|
105
|
|
|
632
|
|
|
(83.2)
|
|
|
317
|
|
|
871
|
|
|
(63.5)
|
|
EBIT
|
|
$
|
2,016
|
|
|
$
|
1,930
|
|
|
4.5
|
%
|
|
$
|
7,207
|
|
|
$
|
4,687
|
|
|
53.8
|
%
|
+ Total
depreciation and amortization (a)
|
|
652
|
|
|
603
|
|
|
7.9
|
|
|
1,952
|
|
|
1,848
|
|
|
5.6
|
|
EBITDA
|
|
$
|
2,668
|
|
|
$
|
2,533
|
|
|
5.3
|
%
|
|
$
|
9,159
|
|
|
$
|
6,535
|
|
|
40.2
|
%
|
(a)
|
Represents total
depreciation and amortization, including amounts classified within
Depreciation and Amortization and within Cost of Sales.
|
|
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
|
|
|
(dollars in
millions) (unaudited)
|
|
|
|
|
|
|
Trailing Twelve
Months
|
|
|
Numerator
|
|
October 30,
2021
|
|
October 31,
2020
|
|
|
Operating
income
|
|
$
|
8,687
|
|
|
$
|
5,901
|
|
|
|
+ Net other
income / (expense)
|
|
358
|
|
|
(46)
|
|
|
|
EBIT
|
|
9,045
|
|
|
5,855
|
|
|
|
+ Operating
lease interest (a)
|
|
85
|
|
|
87
|
|
|
|
-
Income taxes (b)
|
|
1,947
|
|
|
1,277
|
|
|
|
Net operating
profit after taxes
|
|
$
|
7,183
|
|
|
$
|
4,665
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
October 30,
2021
|
|
October 31,
2020
|
|
November 2,
2019
|
Current portion of
long-term debt and other borrowings
|
|
$
|
1,176
|
|
|
$
|
131
|
|
|
$
|
1,159
|
|
+ Noncurrent
portion of long-term debt
|
|
11,586
|
|
|
12,490
|
|
|
10,513
|
|
+ Shareholders'
investment
|
|
13,803
|
|
|
13,319
|
|
|
11,545
|
|
+ Operating
lease liabilities (c)
|
|
2,737
|
|
|
2,400
|
|
|
2,390
|
|
- Cash
and cash equivalents
|
|
5,753
|
|
|
5,996
|
|
|
969
|
|
Invested
capital
|
|
$
|
23,549
|
|
|
$
|
22,344
|
|
|
$
|
24,638
|
|
Average invested
capital (d)
|
|
$
|
22,947
|
|
|
$
|
23,491
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax return
on invested capital
|
|
|
31.3
|
%
|
|
|
19.9
|
%
|
(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 21.3 percent and 21.5 percent for
the trailing twelve months ended October 30, 2021, and
October 31, 2020, respectively. For the twelve months ended
October 30, 2021, and October 31, 2020, includes tax
effect of $1.9 billion and $1.3 billion, respectively, related
to EBIT, and $18 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.
|
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SOURCE Target Corporation