MINNEAPOLIS, Aug. 21,
2024 PRNewswire/ --
- Second quarter comparable sales increased 2.0 percent, at
the high end of the Company's expectations.
- Traffic grew 3 percent in the second quarter as compared to
the prior year, with all six core merchandising categories
delivering traffic growth.
- Digital comparable sales grew 8.7 percent. Same-day services
saw double digit growth, led by low teens growth in Drive Up and
Target Circle 360™ same-day delivery.
- Discretionary sales trends continued to improve
meaningfully, with Apparel comparable sales growing more than 3
percent in the quarter.
- Second quarter operating income margin rate of 6.4 percent
grew 160 basis points compared to the prior year, driven by a
higher gross margin rate.
- GAAP and Adjusted EPS of $2.57
grew by more than 40 percent compared with last year.
For additional media materials, please
visit:
https://corporate.target.com/news-features/article/2024/08/q2-2024-earnings
Target Corporation (NYSE: TGT) today announced its second
quarter 2024 financial results, which reflected a return to topline
growth and strong profit performance.
The Company reported second quarter GAAP and Adjusted earnings
per share1 (EPS) of $2.57,
compared with $1.80 in 2023. 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, when applicable. See the tables of this
release for additional information.
|
"We made a commitment to get back to growth in the second
quarter, and the team delivered, all while expanding operating
margins and growing EPS by more than 40% compared to last year.
Importantly, our growth was driven entirely by traffic in stores
and our digital channels, with double-digit growth in our same-day
delivery services," said Brian
Cornell, chair and chief executive officer of Target
Corporation. "We also saw improving trends across our discretionary
categories, most notably in apparel, and we're seeing continued
strength in beauty. Looking ahead, even as we maintain the measured
outlook that has served us well, we are focused on building on this
positive momentum by executing our strategy and providing the
unique combination of newness and value that consumers can only
find at Target."
Guidance
For the third quarter, the Company expects a 0 to 2 percent
increase in its comparable sales, and GAAP and Adjusted EPS of
$2.10 to $2.40.
While the Company believes its full-year guidance range of a 0
to 2 percent increase in its comparable sales remains appropriate,
it now believes the increase will more likely be in the lower half
of that range. However, based on strong profit performance in the
front half of the year, the Company now expects full-year GAAP and
Adjusted EPS of $9.00 to $9.70, up from the prior range of $8.60 to $9.60.
Operating Results
Comparable sales increased 2.0 percent in the second quarter,
reflecting a comparable store sales increase of 0.7 percent and a
comparable digital sales increase of 8.7 percent. Total revenue of
$25.5 billion in the second quarter
was 2.7 percent higher than last year, reflecting a total sales
increase of 2.6 percent and a 10.8 percent increase in other
revenue. Second quarter operating income of $1.6 billion was 36.6 percent higher than last
year, driven by sales growth and a higher gross margin rate.
Second quarter operating income margin rate was 6.4 percent in
2024, compared with 4.8 percent in 2023. Second quarter gross
margin rate was 28.9 percent, compared with 27.0 percent in 2023,
reflecting the net impact of merchandising activities, including
cost improvements that more than offset higher promotional markdown
rates, combined with favorable category mix and lower book to
physical inventory adjustments as compared to the prior year,
partially offset by higher digital fulfillment and supply chain
costs. Second quarter SG&A expense rate was 21.2 percent
in 2024, compared with 20.9 percent in 2023, reflecting the
combined impact of higher costs, including continued investments in
pay and benefits, partially offset by disciplined cost
management.
Interest Expense and Taxes
The Company's second quarter 2024 net interest expense was
$110 million, compared with
$141 million last year, primarily
driven by an increase in interest income reflecting higher cash
balances year-over-year.
Second quarter 2024 effective income tax rate was 22.9 percent,
compared with the prior year rate of 22.2 percent, reflecting
higher pretax earnings and lower discrete benefits as compared to
the prior year.
Capital Deployment and Return on Invested Capital
The Company paid dividends of $509
million in the second quarter, compared with $499 million last year, reflecting a 1.9 percent
increase in the dividend per share.
The Company repurchased $155
million of its shares in the second quarter, retiring 1.1
million shares of common stock at an average price of $145.94. As of the end of the quarter, the
Company had approximately $9.5
billion of remaining capacity under the repurchase program
approved by Target's Board of Directors in August 2021.
For the trailing twelve months through second quarter 2024,
after-tax return on invested capital (ROIC) was 16.6 percent,
compared with 13.7 percent for the trailing twelve months through
second quarter 2023. The increase in ROIC reflects higher operating
income, partially offset by higher average invested capital. The
tables in this release provide additional information about the
Company's ROIC calculation.
Webcast Details
Target will webcast its second 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 "Q2 2024 Target
Corporation Earnings Conference Call" under "Events &
Presentations"). A replay of the webcast will be provided when
available. The replay number is 1-866-405-7299.
Miscellaneous
Statements in this release regarding the Company's future
financial performance, including its fiscal 2024 third quarter and
full-year 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 February 3, 2024. 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
|
|
|
Consolidated
Statements of Operations
|
|
|
Three Months Ended
|
|
|
|
Six Months
Ended
|
|
|
|
(millions, except per share data) (unaudited)
|
|
August 3,
2024
|
|
July 29,
2023
|
|
Change
|
|
August 3,
2024
|
|
July 29,
2023
|
|
Change
|
|
Sales
|
|
$
25,021
|
|
$
24,384
|
|
2.6 %
|
|
$
49,164
|
|
$
49,332
|
|
(0.3) %
|
|
Other
revenue
|
|
431
|
|
389
|
|
10.8
|
|
819
|
|
763
|
|
7.4
|
|
Total
revenue
|
|
25,452
|
|
24,773
|
|
2.7
|
|
49,983
|
|
50,095
|
|
(0.2)
|
|
Cost of
sales
|
|
17,799
|
|
17,798
|
|
0.0
|
|
35,248
|
|
36,184
|
|
(2.6)
|
|
Selling, general and
administrative expenses
|
|
5,392
|
|
5,184
|
|
4.0
|
|
10,560
|
|
10,209
|
|
3.4
|
|
Depreciation and
amortization (exclusive of depreciation included in cost of
sales)
|
|
626
|
|
594
|
|
5.3
|
|
1,244
|
|
1,177
|
|
5.7
|
|
Operating
income
|
|
1,635
|
|
1,197
|
|
36.6
|
|
2,931
|
|
2,525
|
|
16.1
|
|
Net interest
expense
|
|
110
|
|
141
|
|
(22.4)
|
|
216
|
|
288
|
|
(25.1)
|
|
Net other
income
|
|
(20)
|
|
(16)
|
|
20.3
|
|
(49)
|
|
(39)
|
|
24.2
|
|
Earnings before income
taxes
|
|
1,545
|
|
1,072
|
|
44.1
|
|
2,764
|
|
2,276
|
|
21.4
|
|
Provision for income
taxes
|
|
353
|
|
237
|
|
48.7
|
|
630
|
|
491
|
|
28.2
|
|
Net earnings
|
|
$
1,192
|
|
$
835
|
|
42.7 %
|
|
$
2,134
|
|
$
1,785
|
|
19.6 %
|
|
Basic earnings per
share
|
|
$
2.58
|
|
$
1.81
|
|
42.5 %
|
|
$
4.62
|
|
$
3.87
|
|
19.3 %
|
|
Diluted earnings per
share
|
|
$
2.57
|
|
$
1.80
|
|
42.4 %
|
|
$
4.60
|
|
$
3.86
|
|
19.3 %
|
|
Weighted average common
shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
462.5
|
|
461.6
|
|
0.2 %
|
|
462.4
|
|
461.3
|
|
0.2 %
|
|
Diluted
|
|
463.5
|
|
462.5
|
|
0.2 %
|
|
463.7
|
|
462.7
|
|
0.2 %
|
|
Antidilutive
shares
|
|
2.3
|
|
2.9
|
|
|
|
1.8
|
|
2.4
|
|
|
|
Dividends declared per
share
|
|
$
1.12
|
|
$
1.10
|
|
1.8 %
|
|
$
2.22
|
|
$
2.18
|
|
1.8 %
|
|
TARGET
CORPORATION
|
|
|
Consolidated
Statements of Financial Position
|
|
(millions, except
footnotes) (unaudited)
|
|
August 3,
2024
|
|
February 3,
2024
|
|
July 29,
2023
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
3,497
|
|
$
3,805
|
|
$
1,617
|
|
Inventory
|
|
12,604
|
|
11,886
|
|
12,684
|
|
Other current
assets
|
|
1,817
|
|
1,807
|
|
1,797
|
|
Total current
assets
|
|
17,918
|
|
17,498
|
|
16,098
|
|
Property and
equipment
|
|
|
|
|
|
|
|
Land
|
|
6,645
|
|
6,547
|
|
6,504
|
|
Buildings and
improvements
|
|
38,324
|
|
37,066
|
|
35,889
|
|
Fixtures and
equipment
|
|
8,690
|
|
8,765
|
|
7,936
|
|
Computer hardware and
software
|
|
3,437
|
|
3,428
|
|
3,178
|
|
Construction-in-progress
|
|
830
|
|
1,703
|
|
2,641
|
|
Accumulated
depreciation
|
|
(24,851)
|
|
(24,413)
|
|
(23,201)
|
|
Property and
equipment, net
|
|
33,075
|
|
33,096
|
|
32,947
|
|
Operating lease
assets
|
|
3,545
|
|
3,362
|
|
2,840
|
|
Other noncurrent
assets
|
|
1,457
|
|
1,400
|
|
1,321
|
|
Total
assets
|
|
$
55,995
|
|
$
55,356
|
|
$
53,206
|
|
Liabilities and
shareholders' investment
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
12,595
|
|
$
12,098
|
|
$
12,278
|
|
Accrued and other
current liabilities
|
|
5,749
|
|
6,090
|
|
5,948
|
|
Current portion of
long-term debt and other borrowings
|
|
1,640
|
|
1,116
|
|
1,106
|
|
Total current
liabilities
|
|
19,984
|
|
19,304
|
|
19,332
|
|
Long-term debt and
other borrowings
|
|
13,654
|
|
14,922
|
|
14,926
|
|
Noncurrent operating
lease liabilities
|
|
3,444
|
|
3,279
|
|
2,798
|
|
Deferred income
taxes
|
|
2,495
|
|
2,480
|
|
2,334
|
|
Other noncurrent
liabilities
|
|
1,989
|
|
1,939
|
|
1,826
|
|
Total noncurrent
liabilities
|
|
21,582
|
|
22,620
|
|
21,884
|
|
Shareholders'
investment
|
|
|
|
|
|
|
|
Common
stock
|
|
38
|
|
38
|
|
38
|
|
Additional paid-in
capital
|
|
6,831
|
|
6,761
|
|
6,610
|
|
Retained
earnings
|
|
8,030
|
|
7,093
|
|
5,767
|
|
Accumulated other
comprehensive loss
|
|
(470)
|
|
(460)
|
|
(425)
|
|
Total shareholders'
investment
|
|
14,429
|
|
13,432
|
|
11,990
|
|
Total liabilities
and shareholders' investment
|
|
$
55,995
|
|
$
55,356
|
|
$
53,206
|
|
|
Common
Stock Authorized 6,000,000,000 shares, $0.0833 par value;
461,600,215, 461,675,441, and 461,600,640 shares issued and
outstanding as of August 3, 2024, February 3, 2024, and
July 29, 2023, 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
|
|
|
Six Months
Ended
|
|
(millions) (unaudited)
|
|
August 3,
2024
|
|
July 29,
2023
|
|
Operating
activities
|
|
|
|
|
|
Net earnings
|
|
$
2,134
|
|
$
1,785
|
|
Adjustments to
reconcile net earnings to cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
1,461
|
|
1,350
|
|
Share-based
compensation expense
|
|
149
|
|
107
|
|
Deferred income
taxes
|
|
16
|
|
141
|
|
Noncash losses /
(gains) and other, net
|
|
22
|
|
11
|
|
Changes in operating
accounts:
|
|
|
|
|
|
Inventory
|
|
(718)
|
|
815
|
|
Other
assets
|
|
(53)
|
|
62
|
|
Accounts
payable
|
|
522
|
|
(1,137)
|
|
Accrued and other
liabilities
|
|
(194)
|
|
264
|
|
Cash provided by
operating activities
|
|
3,339
|
|
3,398
|
|
Investing
activities
|
|
|
|
|
|
Expenditures for
property and equipment
|
|
(1,313)
|
|
(2,825)
|
|
Proceeds from disposal
of property and equipment
|
|
2
|
|
6
|
|
Other
investments
|
|
6
|
|
(2)
|
|
Cash required for
investing activities
|
|
(1,305)
|
|
(2,821)
|
|
Financing
activities
|
|
|
|
|
|
Reductions of
long-term debt
|
|
(1,076)
|
|
(72)
|
|
Dividends
paid
|
|
(1,017)
|
|
(996)
|
|
Repurchase of
stock
|
|
(155)
|
|
—
|
|
Shares withheld for
taxes on share-based compensation
|
|
(94)
|
|
(121)
|
|
Cash required for
financing activities
|
|
(2,342)
|
|
(1,189)
|
|
Net decrease in cash
and cash equivalents
|
|
(308)
|
|
(612)
|
|
Cash and cash
equivalents at beginning of period
|
|
3,805
|
|
2,229
|
|
Cash and cash
equivalents at end of period
|
|
$
3,497
|
|
$
1,617
|
|
TARGET
CORPORATION
|
|
|
Operating
Results
|
|
Rate
Analysis
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
(unaudited)
|
|
August 3,
2024
|
|
July 29,
2023
|
|
August 3,
2024
|
|
July 29,
2023
|
|
Gross margin
rate
|
|
28.9 %
|
|
27.0 %
|
|
28.3 %
|
|
26.7 %
|
|
SG&A expense
rate
|
|
21.2
|
|
20.9
|
|
21.1
|
|
20.4
|
|
Depreciation and
amortization expense rate (exclusive of depreciation included in
cost of sales)
|
|
2.5
|
|
2.4
|
|
2.5
|
|
2.3
|
|
Operating income margin
rate
|
|
6.4
|
|
4.8
|
|
5.9
|
|
5.0
|
|
|
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 $144 million and
$286 million of profit-sharing income under our credit card program
agreement for the three and six months ended August 3, 2024,
respectively, and $169 million and $343 million for the three and
six months ended July 29, 2023, respectively.
|
|
Comparable
Sales
|
|
Three Months Ended
|
|
Six Months
Ended
|
|
(unaudited)
|
|
August 3,
2024
|
|
July 29,
2023
|
|
August 3,
2024
|
|
July 29,
2023
|
|
Comparable sales
change
|
|
2.0 %
|
|
(5.4) %
|
|
(0.9) %
|
|
(2.8) %
|
|
Drivers of change in
comparable sales
|
|
|
|
|
|
|
|
|
|
Number of transactions
(traffic)
|
|
3.0
|
|
(4.8)
|
|
0.6
|
|
(2.0)
|
|
Average transaction
amount
|
|
(0.9)
|
|
(0.7)
|
|
(1.4)
|
|
(0.8)
|
|
|
|
|
|
|
Comparable Sales by
Channel
|
|
Three Months Ended
|
|
Six Months
Ended
|
|
(unaudited)
|
|
August 3,
2024
|
|
July 29,
2023
|
|
August 3,
2024
|
|
July 29,
2023
|
|
Stores originated
comparable sales change
|
|
0.7 %
|
|
(4.3) %
|
|
(2.1) %
|
|
(1.8) %
|
|
Digitally originated
comparable sales change
|
|
8.7
|
|
(10.5)
|
|
5.0
|
|
(7.0)
|
|
|
|
|
|
|
Sales by
Channel
|
|
Three Months Ended
|
|
Six Months
Ended
|
|
(unaudited)
|
|
August 3,
2024
|
|
July 29,
2023
|
|
August 3,
2024
|
|
July 29,
2023
|
|
Stores
originated
|
|
82.1 %
|
|
83.1 %
|
|
81.9 %
|
|
82.8 %
|
|
Digitally
originated
|
|
17.9
|
|
16.9
|
|
18.1
|
|
17.2
|
|
Total
|
|
100 %
|
|
100 %
|
|
100 %
|
|
100 %
|
|
|
|
|
|
|
|
|
|
|
Sales by
Fulfillment Channel
|
|
Three Months Ended
|
|
Six Months
Ended
|
|
(unaudited)
|
|
August 3,
2024
|
|
July 29,
2023
|
|
August 3,
2024
|
|
July 29,
2023
|
|
Stores
|
|
97.9 %
|
|
97.6 %
|
|
97.8 %
|
|
97.4 %
|
|
Other
|
|
2.1
|
|
2.4
|
|
2.2
|
|
2.6
|
|
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.
|
|
Target Circle Card
Penetration
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
(unaudited)
|
|
August 3,
2024
|
|
July 29,
2023
|
|
August 3,
2024
|
|
July 29,
2023
|
|
Total Target Circle
Card Penetration
|
|
17.7 %
|
|
18.6 %
|
|
17.9 %
|
|
18.8 %
|
|
Number of Stores and
Retail Square Feet
|
|
Number of
Stores
|
|
Retail Square Feet
(a)
|
|
(unaudited)
|
|
August 3,
2024
|
|
February 3,
2024
|
|
July 29,
2023
|
|
August 3,
2024
|
|
February 3,
2024
|
|
July 29,
2023
|
|
170,000 or more sq.
ft.
|
|
273
|
|
273
|
|
274
|
|
48,824
|
|
48,824
|
|
48,995
|
|
50,000 to 169,999 sq.
ft.
|
|
1,549
|
|
1,542
|
|
1,534
|
|
193,705
|
|
192,908
|
|
191,947
|
|
49,999 or less sq.
ft.
|
|
144
|
|
141
|
|
147
|
|
4,334
|
|
4,207
|
|
4,404
|
|
Total
|
|
1,966
|
|
1,956
|
|
1,955
|
|
246,863
|
|
245,939
|
|
245,346
|
|
|
|
(a)
|
In thousands; reflects
total square feet less office, supply chain facilities, and vacant
space.
|
TARGET CORPORATION
Reconciliation of Non-GAAP Financial Measures
To provide additional transparency, we disclose non-GAAP
adjusted diluted earnings per share (Adjusted EPS). When
applicable, this metric excludes certain discretely managed items.
However, there are no adjustments in any period presented. We
believe this information is useful in providing period-to-period
comparisons of the results of our operations. This measure is not
in accordance with, or an alternative to, U.S. GAAP. The most
comparable GAAP measure is diluted earnings per share. Adjusted EPS
should not be considered in isolation or as a substitution for
analysis of our results as reported in accordance with GAAP. Other
companies may calculate Adjusted EPS differently, limiting the
usefulness of the measure for comparisons with other companies.
|
Reconciliation of
Non-GAAP
Adjusted
EPS
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
August 3,
2024
|
|
July 29,
2023
|
|
Change
|
|
August 3,
2024
|
|
July 29,
2023
|
|
Change
|
|
GAAP and adjusted
diluted earnings per share
|
|
$
2.57
|
|
$
1.80
|
|
42.4 %
|
|
$
4.60
|
|
$
3.86
|
|
19.3 %
|
|
Reconciliation of
Non-GAAP
Adjusted EPS
Guidance
|
Guidance
|
|
(per share)
(unaudited)
|
Q3 2024
|
|
Full Year
2024
|
|
GAAP diluted earnings
per share guidance
|
$2.10 -
$2.40
|
|
$9.00 -
$9.70
|
|
Estimated
adjustments
|
|
|
|
|
Other
(a)
|
$
—
|
|
$
—
|
|
Adjusted diluted
earnings per share guidance
|
$2.10 -
$2.40
|
|
$9.00 -
$9.70
|
|
|
|
(a)
|
Third quarter and
full-year 2024 GAAP EPS may include the impact of certain discrete
items, which will be excluded in calculating Adjusted EPS. The
guidance does not currently reflect any such discrete items. In the
past, these items have included losses on the early retirement of
debt and certain other items that are discretely
managed.
|
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
|
|
|
|
Six Months
Ended
|
|
|
|
(dollars in
millions) (unaudited)
|
|
August 3,
2024
|
|
July 29,
2023
|
|
Change
|
|
August 3,
2024
|
|
July 29,
2023
|
|
Change
|
|
Net earnings
|
|
$
1,192
|
|
$
835
|
|
42.7 %
|
|
$
2,134
|
|
$
1,785
|
|
19.6 %
|
|
+ Provision for
income taxes
|
|
353
|
|
237
|
|
48.7
|
|
630
|
|
491
|
|
28.2
|
|
+ Net interest
expense
|
|
110
|
|
141
|
|
(22.4)
|
|
216
|
|
288
|
|
(25.1)
|
|
EBIT
|
|
$
1,655
|
|
$
1,213
|
|
36.3 %
|
|
$
2,980
|
|
$
2,564
|
|
16.2 %
|
|
+ Total
depreciation and amortization (a)
|
|
743
|
|
683
|
|
8.8
|
|
1,461
|
|
1,350
|
|
8.2
|
|
EBITDA
|
|
$
2,398
|
|
$
1,896
|
|
26.4 %
|
|
$
4,441
|
|
$
3,914
|
|
13.5 %
|
|
|
|
(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
|
|
August 3, 2024
(a)
|
|
July 29,
2023
|
|
|
|
Operating
income
|
|
$
6,113
|
|
$
4,706
|
|
|
|
+ Net other
income
|
|
102
|
|
65
|
|
|
|
EBIT
|
|
6,215
|
|
4,771
|
|
|
|
+ Operating lease
interest (b)
|
|
146
|
|
102
|
|
|
|
- Income
taxes (c)
|
|
1,427
|
|
986
|
|
|
|
Net operating profit
after taxes
|
|
$
4,934
|
|
$
3,887
|
|
|
|
Denominator
|
|
August 3,
2024
|
|
July 29,
2023
|
|
July 30,
2022
|
|
Current portion of
long-term debt and other borrowings
|
|
$
1,640
|
|
$
1,106
|
|
$
1,649
|
|
+ Noncurrent
portion of long-term debt
|
|
13,654
|
|
14,926
|
|
13,453
|
|
+ Shareholders'
investment
|
|
14,429
|
|
11,990
|
|
10,592
|
|
+ Operating lease
liabilities (d)
|
|
3,786
|
|
3,104
|
|
2,823
|
|
- Cash
and cash equivalents
|
|
3,497
|
|
1,617
|
|
1,117
|
|
Invested
capital
|
|
$
30,012
|
|
$
29,509
|
|
$
27,400
|
|
Average invested
capital (e)
|
|
$
29,760
|
|
$
28,454
|
|
|
|
|
After-tax return on
invested capital
|
|
16.6 %
|
|
13.7 %
|
|
|
|
|
|
(a)
|
The trailing twelve
months ended August 3, 2024, consisted of 53 weeks compared with 52
weeks in the prior-year period.
|
|
(b)
|
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.
|
|
(c)
|
Calculated using the
effective tax rates, which were 22.4 percent and 20.2
percent for the trailing twelve months ended August 3,
2024, and July 29, 2023, respectively. For the twelve months
ended August 3, 2024, and July 29, 2023, includes tax
effect of $1.4 billion and $1.0 billion, respectively, related
to EBIT, and $33 million and $20 million, respectively,
related to operating lease interest.
|
|
(d)
|
Total short-term and
long-term operating lease liabilities included within Accrued and
Other Current Liabilities and Noncurrent Operating Lease
Liabilities, respectively.
|
|
(e)
|
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