FOR IMMEDIATE RELEASE

Contacts: John Hulbert, Investors, (612) 761-6627

Jennifer Kron, Media, (612) 696-3400

Target Corporation Reports Third Quarter Earnings

• The Company's third quarter operating income margin rate of 5.2 percent was 1.3 percentage
points higher than last year, driven by a higher gross margin rate.
• Third quarter GAAP and Adjusted EPS1 of $2.10 was 36 percent higher than a year ago and above
the high end of the Company's guidance range, reflecting disciplined inventory and expense
management.
• Through the first three quarters of this year, Target has generated more than $5.3 billion of
operating cash flow, compared with approximately $550 million in 2022.
• Third quarter comparable sales declined 4.9 percent, in line with expectations.
◦ Declines in discretionary categories were partially offset by continued growth in frequency
categories, most notably in Beauty.
◦ Same-day services grew more than 8 percent, led by more than 12 percent growth in Drive-
Up.
• Inventory at the end of Q3 was 14 percent lower than last year, reflecting a 19 percent reduction
in discretionary category inventory.
• To deliver newness and value for guests this holiday season, Target will offer more than 10,000
new items for the holidays, with thousands of must-have gifts under $25, and thousands of
exclusive-to-Target items across many categories.

For additional media materials, please visit:

https://corporate.target.com/news-features/article/2023/11/q3-2023-earnings

MINNEAPOLIS (November 15, 2023) – Target Corporation (NYSE: TGT) today announced its third
quarter 2023 financial results, which reflected stronger-than-expected profit performance on sales
consistent with expectations.

The Company reported third quarter GAAP and Adjusted earnings per share1 (EPS) of $2.10, up 36.3
percent from $1.54 in 2022. The attached tables provide a reconciliation of non-GAAP to GAAP
measures. All earnings per share figures refer to diluted EPS.
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1
Adjusted 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 Reports Third Quarter Earnings — Page 2 of 12

Brian Cornell, chair and chief executive of Target Corporation, said “In the third quarter, our team
continued to successfully navigate our business through a very challenging external environment. While
third quarter sales were consistent with our expectations, earnings per share came in far ahead of our
forecast. This profit performance benefited from our team’s commitment to efficiency and disciplined
inventory management, and I’d like to thank them for their tireless efforts. Looking ahead, we’re
continuing to make investments throughout our business -- in our assortment, our team and the services
we offer -- to provide the newness, affordability and convenience our guests want during the holiday
season and beyond.”

Guidance

For the fourth quarter, the Company expects comparable sales in a wide range around a mid-single digit
decline, and GAAP and Adjusted EPS of $1.90 to $2.60.

Operating Results

Comparable sales declined 4.9 percent in the third quarter, reflecting a comparable store sales decline of
4.6 percent and a comparable digital sales decline of 6.0 percent. Total revenue of $25.4 billion was 4.2
percent lower than last year, reflecting a total sales decline of 4.3 percent and a 0.6 percent decrease in
other revenue. Third quarter operating income of $1.3 billion was 28.9 percent higher than last year,
driven by a higher gross margin rate.

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Target Corporation Reports Third Quarter Earnings — Page 3 of 12

Third quarter operating income margin rate was 5.2 percent in 2023, compared with 3.9 percent in 2022.
Third quarter gross margin rate was 27.4 percent, compared with 24.7 percent in 2022, reflecting lower
markdowns and other inventory-related costs, lower freight costs, lower supply chain and digital
fulfillment costs, and favorable category mix. These benefits were partially offset by higher inventory
shrink. Third quarter SG&A expense rate was 20.9 percent in 2023, compared with 19.7 percent in 2022,
reflecting the de-leveraging impact of lower sales combined with higher costs, including continued
investments in pay and benefits and inflationary pressures throughout our business, partially offset by
disciplined cost management.

Interest Expense and Taxes

The Company’s third quarter 2023 net interest expense was $107 million, compared with $125 million last
year, reflecting an increase in interest income, partially offset by higher debt levels and the impact of
higher floating interest rates on interest rate swaps.

Third quarter 2023 effective income tax rate was 21.3 percent, in line with the prior year rate of 21.6
percent.

Capital Deployment and Return on Invested Capital

The Company paid dividends of $507 million in the third quarter, compared with $497 million last year,
reflecting a 1.9 percent increase in the dividend per share.

The Company did not repurchase any stock in the third quarter. As of the end of the quarter, the Company
had approximately $9.7 billion of remaining capacity under the repurchase program approved by Target’s
Board of Directors in August 2021.

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Target Corporation Reports Third Quarter Earnings — Page 4 of 12

For the trailing twelve months through third quarter 2023, after-tax return on invested capital (ROIC) was
13.9 percent, compared with 14.6 percent for the trailing twelve months through third quarter 2022. The
decrease in ROIC reflects faster growth in average invested capital compared with after-tax returns. 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 Corporate.Target.com/Investors (click on "Q3 2023 Target
Corporation Earnings Conference Call" under "Events & Presentations"). A replay of the webcast will be
provided when available. The replay number is 1-800-391-9851.

Miscellaneous

Statements in this release regarding the Company’s future financial performance, including its fiscal 2023
fourth quarter guidance, 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 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 January 28, 2023. 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 2,000 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 the corporate website (corporate.target.com) and press
center.

###
Target Corporation Reports Third Quarter Earnings — Page 5 of 12

TARGET CORPORATION

Consolidated Statements of Operations

Three Months Ended Nine Months Ended
October 28, October 29, October 28, October 29,
(millions, except per share data) (unaudited) 2023 2022 Change 2023 2022 Change
Sales $ 25,004 $ 26,122 (4.3)% $ 74,336 $ 76,605 (3.0)%
Other revenue 394 396 (0.6) 1,157 1,120 3.3
Total revenue 25,398 26,518 (4.2) 75,493 77,725 (2.9)
Cost of sales 18,149 19,680 (7.8) 54,333 58,283 (6.8)
Selling, general and administrative expenses 5,316 5,219 1.8 15,525 14,983 3.6
Depreciation and amortization (exclusive of
depreciation included in cost of sales) 616 597 3.2 1,793 1,770 1.3
Operating income 1,317 1,022 28.9 3,842 2,689 42.9
Net interest expense 107 125 (14.1) 395 349 13.4
Net other income (25) (12) 115.0 (64) (35) 87.8
Earnings before income taxes 1,235 909 35.9 3,511 2,375 47.9
Provision for income taxes 264 197 34.2 755 471 60.6
Net earnings $ 971 $ 712 36.3 % $ 2,756 $ 1,904 44.7 %
Basic earnings per share $ 2.10 $ 1.55 35.9 % $ 5.97 $ 4.11 45.4 %
Diluted earnings per share $ 2.10 $ 1.54 36.3 % $ 5.96 $ 4.09 45.6 %
Weighted average common shares
outstanding
Basic 461.6 460.3 0.3 % 461.4 462.6 (0.3)%
Diluted 462.6 462.5 0.0 % 462.7 465.3 (0.6)%
Antidilutive shares 3.0 1.3 2.6 1.1
Dividends declared per share $ 1.10 $ 1.08 1.9 % $ 3.28 $ 3.06 7.2 %
Target Corporation Reports Third Quarter Earnings — Page 6 of 12

TARGET CORPORATION

Consolidated Statements of Financial Position

(millions, except footnotes) (unaudited) October 28, 2023 January 28, 2023 October 29, 2022
Assets
Cash and cash equivalents $ 1,910 $ 2,229 $ 954
Inventory 14,731 13,499 17,117
Other current assets 1,958 2,118 2,322
Total current assets 18,599 17,846 20,393
Property and equipment
Land 6,520 6,231 6,214
Buildings and improvements 36,627 34,746 34,279
Fixtures and equipment 8,490 7,439 7,184
Computer hardware and software 3,312 3,039 2,899
Construction-in-progress 2,000 2,688 2,358
Accumulated depreciation (23,781) (22,631) (22,013)
Property and equipment, net 33,168 31,512 30,921
Operating lease assets 3,086 2,657 2,596
Other noncurrent assets 1,376 1,320 1,705
Total assets $ 56,229 $ 53,335 $ 55,615
Liabilities and shareholders’ investment
Accounts payable $ 14,291 $ 13,487 $ 15,438
Accrued and other current liabilities 6,099 5,883 6,138
Current portion of long-term debt and other borrowings 1,112 130 2,207
Total current liabilities 21,502 19,500 23,783
Long-term debt and other borrowings 14,883 16,009 14,237
Noncurrent operating lease liabilities 3,031 2,638 2,590
Deferred income taxes 2,447 2,196 2,240
Other noncurrent liabilities 1,852 1,760 1,746
Total noncurrent liabilities 22,213 22,603 20,813
Shareholders’ investment
Common stock 38 38 38
Additional paid-in capital 6,681 6,608 6,558
Retained earnings 6,225 5,005 4,631
Accumulated other comprehensive loss (430) (419) (208)
Total shareholders’ investment 12,514 11,232 11,019
Total liabilities and shareholders’ investment $ 56,229 $ 53,335 $ 55,615
Common Stock Authorized 6,000,000,000 shares, $0.0833 par value; 461,651,176, 460,346,947, and 460,297,654 shares
issued and outstanding as of October 28, 2023, January 28, 2023, and October 29, 2022, respectively.

Preferred Stock Authorized 5,000,000 shares, $0.01 par value; no shares were issued or outstanding during any period
presented.
Target Corporation Reports Third Quarter Earnings — Page 7 of 12

TARGET CORPORATION

Consolidated Statements of Cash Flows

Nine Months Ended
October 28, October 29,
(millions) (unaudited) 2023 2022
Operating activities
Net earnings $ 2,756 $ 1,904
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization 2,072 2,004
Share-based compensation expense 176 177
Deferred income taxes 252 548
Noncash losses / (gains) and other, net 101 141
Changes in operating accounts:
Inventory (1,232) (3,215)
Other assets (208) (205)
Accounts payable 887 (224)
Accrued and other liabilities 528 (578)
Cash provided by operating activities 5,332 552
Investing activities
Expenditures for property and equipment (3,952) (4,323)
Proceeds from disposal of property and equipment 24 4
Other investments 18 16
Cash required for investing activities (3,910) (4,303)
Financing activities
Change in commercial paper, net — 2,104
Additions to long-term debt — 991
Reductions of long-term debt (114) (139)
Dividends paid (1,503) (1,339)
Repurchase of stock — (2,646)
Shares withheld for taxes on share-based compensation (124) (179)
Stock option exercises — 2
Cash required for financing activities (1,741) (1,206)
Net decrease in cash and cash equivalents (319) (4,957)
Cash and cash equivalents at beginning of period 2,229 5,911
Cash and cash equivalents at end of period $ 1,910 $ 954
Target Corporation Reports Third Quarter Earnings — Page 8 of 12

TARGET CORPORATION

Operating Results

Rate Analysis Three Months Ended Nine Months Ended

October 28, October 29, October 28, October 29,
(unaudited) 2023 2022 2023 2022
Gross margin rate 27.4 % 24.7 % 26.9 % 23.9 %
SG&A expense rate 20.9 19.7 20.6 19.3
Depreciation and amortization expense rate (exclusive of
depreciation included in cost of sales) 2.4 2.3 2.4 2.3
Operating income margin rate 5.2 3.9 5.1 3.5
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 $165 million and $508 million of profit-sharing
income under our credit card program agreement for the three and nine months ended October 28, 2023, respectively, and $184
million and $550 million for the three and nine months ended October 29, 2022, respectively.

Comparable Sales Three Months Ended Nine Months Ended

October 28, October 29, October 28, October 29,
(unaudited) 2023 2022 2023 2022
Comparable sales change (4.9)% 2.7 % (3.5)% 2.9 %
Drivers of change in comparable sales
Number of transactions (traffic) (4.1) 1.4 (2.7) 2.6
Average transaction amount (0.8) 1.3 (0.8) 0.2

Comparable Sales by Channel Three Months Ended Nine Months Ended

October 28, October 29, October 28, October 29,
(unaudited) 2023 2022 2023 2022
Stores originated comparable sales change (4.6)% 3.2 % (2.8)% 2.6 %
Digitally originated comparable sales change (6.0) 0.3 (6.7) 4.1

Sales by Channel Three Months Ended Nine Months Ended

October 28, October 29, October 28, October 29,
(unaudited) 2023 2022 2023 2022
Stores originated 83.2 % 82.9 % 82.9 % 82.3 %
Digitally originated 16.8 17.1 17.1 17.7
Total 100 % 100 % 100 % 100 %

Sales by Fulfillment Channel Three Months Ended Nine Months Ended

October 28, October 29, October 28, October 29,
(unaudited) 2023 2022 2023 2022
Stores 97.7 % 96.8 % 97.5 % 96.7 %
Other 2.3 3.2 2.5 3.3
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

October 28, October 29, October 28, October 29,
(unaudited) 2023 2022 2023 2022
Total RedCard Penetration 18.3 % 19.6 % 18.6 % 20.0 %
Target Corporation Reports Third Quarter Earnings — Page 9 of 12

Number of Stores and Retail Square Feet Number of Stores Retail Square Feet (a)
October 28, January 28, October 29, October 28, January 28, October 29,
(unaudited) 2023 2023 2022 2023 2023 2022
170,000 or more sq. ft. 273 274 274 48,824 48,985 48,985
50,000 to 169,999 sq. ft. 1,542 1,527 1,522 192,877 191,241 190,739
49,999 or less sq. ft. 141 147 145 4,207 4,358 4,305
Total 1,956 1,948 1,941 245,908 244,584 244,029
(a)
In thousands; reflects total square feet less office, supply chain facilities, and vacant space.
Target Corporation Reports Third Quarter Earnings — Page 10 of 12

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, 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 Three Months Ended

Adjusted EPS October 28, 2023 October 29, 2022
(millions, except per share data) (unaudited) Pretax Net of Tax Per Share Pretax Net of Tax Per Share Change
GAAP and adjusted diluted earnings per share $ 2.10 $ 1.54 36.3 %
Reconciliation of Non-GAAP Nine Months Ended
Adjusted EPS October 28, 2023 October 29, 2022
(millions, except per share data) (unaudited) Pretax Net of Tax Per Share Pretax Net of Tax Per Share Change
GAAP diluted earnings per share $ 5.96 $ 4.09 45.6 %
Adjustments
Other (a) $ — $ — $ — $ 20 $ 15 $ 0.03
Adjusted diluted earnings per share $ 5.96 $ 4.12 44.4 %
(a)
Other items unrelated to current period operations, none of which were individually significant.

Reconciliation of Non-GAAP Guidance

Adjusted EPS Guidance Q4 2023
(unaudited) Per Share
GAAP diluted earnings per share guidance $1.90 - $2.60
Estimated adjustments
Other (a) $ —
Adjusted diluted earnings per share guidance $1.90 - $2.60
(a)
Fourth quarter and full-year 2023 GAAP EPS may include the impact of certain discrete items, which will be excluded
in calculating Adjusted EPS. In the past, these items have included losses on the early retirement of debt and certain
other items that are discretely managed. The Company is not currently aware of any such discrete items.
Target Corporation Reports Third Quarter Earnings — Page 11 of 12

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

October 28, October 29, October 28, October 29,
(dollars in millions) (unaudited) 2023 2022 Change 2023 2022 Change
Net earnings $ 971 $ 712 36.3 % $ 2,756 $ 1,904 44.7 %
+ Provision for income taxes 264 197 34.2 755 471 60.6
+ Net interest expense 107 125 (14.1) 395 349 13.4
EBIT $ 1,342 $ 1,034 29.8 % $ 3,906 $ 2,724 43.5 %
(a)
+ Total depreciation and amortization 722 674 7.1 2,072 2,004 3.4
EBITDA $ 2,064 $ 1,708 20.9 % $ 5,978 $ 4,728 26.5 %
(a)
Represents total depreciation and amortization, including amounts classified within Depreciation and Amortization and
within Cost of Sales.
Target Corporation Reports Third Quarter Earnings — Page 12 of 12

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
October 28, October 29,
Numerator 2023 2022
Operating income $ 5,001 $ 4,784
+ Net other income 79 61
EBIT 5,080 4,845
+ Operating lease interest (a) 106 89
- Income taxes (b) 1,050 1,059
Net operating profit after taxes $ 4,136 $ 3,875

October 28, October 29, October 30,

Denominator 2023 2022 2021
Current portion of long-term debt and other borrowings $ 1,112 $ 2,207 $ 1,176
+ Noncurrent portion of long-term debt 14,883 14,237 11,586
+ Shareholders' investment 12,514 11,019 13,803
+ Operating lease liabilities (c) 3,351 2,879 2,737
- Cash and cash equivalents 1,910 954 5,753
Invested capital $ 29,950 $ 29,388 $ 23,549
Average invested capital (d) $ 29,670 $ 26,469

After-tax return on invested capital 13.9 % 14.6 %

(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 20.3 percent and 21.5 percent for the trailing twelve months ended
October 28, 2023, and October 29, 2022, respectively. For the twelve months ended October 28, 2023, and October 29,
2022, includes tax effect of $1.0 billion related to EBIT, and $22 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.