What changed in this filing

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Item 1. Business

2022-03-09 compared with 2021-03-10 · 69 added, 46 removed, 64 unchanged (64% of the section changed)

Target Corporation (Target, the Corporation, or the Company) was incorporated in Minnesota in 1902.

Our corporate purpose is to help all families discover the joy of everyday life.

We offer to our customers, referred to as "guests," everyday essentials and fashionable, differentiated merchandise at discounted prices.

Our ability to deliver a preferred shopping experience to our guests is supported by our supply chain and technology, our devotion to innovation, our loyalty offerings and suite of fulfillment options, and our disciplined approach to managing our business and investing in future growth.

We operate as a single segment designed to enable guests to purchase products seamlessly in stores or through our digital channels.

Since 1946, we have given 5 percent of our profit to communities.

Our team, technology, and operations enable us to meet our corporate purpose and offer a preferred shopping experience to our guests through a durable, growth-driving enterprise strategy that differentiates Target in the marketplace.

The six pillars of our strategy are:

• Delivering affordability to our guests;

• Differentiating from our competition with our owned brands and a curated assortment of leading national brands;

• Investing to create an engaging and differentiated shopping experience;

• Leveraging our stores-as-hubs to efficiently provide a convenient and safe experience for our guests whether they purchase online or physically in-store;

• Maintaining and enhancing our relevancy to deepen engagement with guests;

• Leveraging our size and scale to benefit people, the planet, and our business, primarily through Target Forward, the sustainability-focused component of our overall business strategy, announced in 2021.

As illustrated by the charts below, our strategy places stores at the center of our flexible fulfillment approach, with stores fulfilling over 95 percent of total sales.

TARGET CORPORATION

2021 Form 10-K 2

BUSINESS Table of Contents

Index to Financial Statements

Sales by Fulfillment Channel

Financial Highlights

For information on key financial highlights, see Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A).

A larger share of annual revenues and earnings traditionally occurs in the fourth quarter because it includes the November and December holiday sales period.

A larger share of annual revenues traditionally occurs in the fourth quarter because it includes the November and December holiday sales period.

We sell a wide assortment of general merchandise and food.

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Our small format stores, generally smaller than 50,000 square feet, offer curated general merchandise and food assortments.

Our digital channels include a wide merchandise assortment, including many items found in our stores, along with a complementary assortment.

A significant portion of our sales is from national brand merchandise.

Approximately one-third of 2020 sales was related to our owned and exclusive brands, including but not limited to the following:

A New Day™ Hearth & Hand™ with Magnolia Shade & Shore™

All in Motion™ heyday™ Simply Balanced™

Archer Farms™ Hyde & EEK!

Boutique™ Smartly™

Art Class™ JoyLab™ Smith & Hawken™

Auden™ Knox Rose™ Sonia Kashuk™

Ava & Viv™ Kona Sol™ Spritz™

Boots & Barkley™ Made By Design™ Stars Above™

Bullseye's Playground™ Market Pantry™ Sun Squad™

Casaluna™ More Than Magic™ Threshold™

Cat & Jack™ Opalhouse™ Universal Thread™

Cloud Island™ Open Story™ up & up™

Colsie™ Original Use™ Wild Fable™

Embark™ Pillowfort™ Wondershop™

Everspring™ Project 62™ Xhilaration™

Good & Gather™ Prologue™

Goodfellow & Co™ Room Essentials™

Exclusive Adult Beverage Brands

California Roots™ Rosé Bae™ Wine Cube™

Mystic Reef™ The Collection™

Our digital channels include a wide merchandise assortment, including many items found in our stores, along with a complementary assortment sold by Target and third parties.

Sales by Product Category

TARGET CORPORATION

2 unchanged sentences

Index to Financial Statements

We also sell merchandise through periodic exclusive design and creative partnerships and generate revenue from in-store amenities such as Target Café and leased or licensed departments such as Target Optical, Starbucks, and other food service offerings.

A significant portion of our sales is from national brand merchandise.

Approximately one-third of 2021 sales was related to our owned and exclusive brands, including, but not limited, to the following:

A New Day™ Goodfellow & Co™ Room Essentials™

All in Motion™ Hearth & Hand™ with Magnolia Shade & Shore™

Archer Farms™ Heyday™ Simply Balanced™

Art Class™ Hyde & EEK!

Boutique™ Smartly™

Auden™ JoyLab™ Smith & Hawken™

Ava & Viv™ Kindfull™ Sonia Kashuk™

Boots & Barkley™ Knox Rose™ Spritz™

Brightroom™ Kona Sol™ Stars Above™

Bullseye's Playground™ Made By Design™ Sun Squad™

Casaluna™ Market Pantry™ Threshold™

Cat & Jack™ Mondo Llama™ Universal Thread™

Cloud Island™ More Than Magic™ up & up™

Colsie™ Opalhouse™ Wild Fable™

Embark™ Open Story™ Wondershop™

Everspring™ Original Use™ Xhilaration™

Favorite Day™ Pillowfort™

Good & Gather™ Project 62™

Exclusive Adult Beverage Brands

California Roots™ Mystic Reef™ SunPop™

Headliner™ Photograph™ The Collection™

Jingle & Mingle™ Rosé Bae™ Wine Cube™

We also sell merchandise through periodic exclusive design and creative partnerships, and shop-in-shop experiences, with partners such as Apple, Disney, Levi's, and Ulta Beauty, and generate revenue from in-store amenities such as Target Café, Starbucks, and Target Optical.

CVS Pharmacy, Inc.

(CVS) operates pharmacies and clinics in our stores under a perpetual operating agreement from which we generate annual occupancy income.

In 2020, we announced a partnership with Ulta Beauty under which we will operate Ulta Beauty at Target , a shop-in-shop experience debuting on Target.com and in more than 100 Target locations beginning in 2021, with plans to scale to hundreds more over time.

Customer Loyalty Programs

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Our stores fulfill the majority of the digitally originated sales, which allows improved product availability, faster fulfillment times, reduced shipping costs, and allows us to offer guests a suite of same-day fulfillment options such as Order Pickup, Drive Up, and Shipt.

TARGET CORPORATION

2021 Form 10-K 4

BUSINESS Table of Contents

Index to Financial Statements

Human Capital Management

At Target, our purpose is to help all families discover the joy of everyday life.

In support of this purpose we invest in our team, our most important asset, by giving them opportunities to grow professionally, take care of themselves, each other and their families, and to make a difference for our guests and our communities.

We are among the largest private employers in the U.S., and our workforce has varying goals and expectations of their employment relationship, from team members looking to build a career to students, retirees and others who are seeking to supplement their income in an enjoyable atmosphere.

In support of our purpose—to help all families discover the joy of everyday life—we invest in our team, our most important asset, by giving them opportunities to grow professionally, take care of themselves, each other and their families, and to make a difference for our guests and our communities.

We are among the largest private employers in the United States (U.S.), and our workforce has varying goals and expectations of their employment relationship, from team members looking to build a career to students, retirees and others who are seeking to supplement their income in an enjoyable atmosphere.

We seek to be an employer of choice to attract and retain top talent no matter their objectives in seeking employment.

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We also engage independent contractors, most notably in our Shipt subsidiary.

Our Board of Directors, through the Compensation and Human Capital Management Committee, oversees human capital management matters.

Talent Development and Engagement

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We monitor our team members’ perceptions of these commitments through a number of surveys and take steps to address areas needing improvement.

TARGET CORPORATION

2020 Form 10-K 3

BUSINESS Table of Contents

Index to Financial Statements

Diversity and Inclusion

We champion workplace diversity and inclusion and focus on developing, advancing, and recruiting diverse talent.

We monitor the representation of women and racially or ethnically diverse team members at different levels throughout the company and disclose the composition of our team in our annual Workforce Diversity Report (which, beginning with our 2019 report, includes demographic information using the categories disclosed in our EEO-1 report).

Developing teams where team members feel heard, respected, and included is a core Target value and is also fundamental to creating an inclusive guest experience.

Diversity, Equity, and Inclusion

We embrace diversity and strive to give our team members equitable access to opportunities.

We champion workplace diversity and an inclusive work environment with a focus on attracting, engaging, developing and advancing diverse talent.

We monitor the representation of women and racially or ethnically diverse team members at different levels throughout the company and disclose the composition of our team in our annual Workforce Diversity Report (which includes demographic information using the categories disclosed in our EEO-1 report).

Developing teams where team members feel heard, respected, and included is a core Target value and is fundamental to creating an inclusive guest experience.

Compensation and Benefits

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team members to confirm that we are doing so.

Our compensation packages include a $15 per-hour minimum starting wage for US hourly team members (who comprise the vast majority of our team), a 401(k) plan with matching contributions up to five percent of eligible earnings, paid vacation and holidays, family leave, merchandise and other discounts, disability insurance, life insurance, healthcare and dependent care flexible spending accounts, tuition reimbursement, various team member assistance programs, an annual short-term incentive program, long-term equity awards, and health insurance benefits.

Our compensation packages include a starting wage of at least $15 per hour for U.S.

hourly team members (who comprise the vast majority of our team), a 401(k) plan with matching contributions up to five percent of eligible earnings, paid vacation and holidays, family leave, merchandise and other discounts, disability insurance, life insurance, healthcare and dependent care flexible spending accounts, debt-free education assistance and tuition reimbursement, free mental health services, an annual short-term incentive program, long-term equity awards, and health insurance benefits, including free virtual health care visits.

Eligibility for, and the level of, benefits vary depending on team members’ full-time or part-time status, work location, compensation level, and tenure.

TARGET CORPORATION

2021 Form 10-K 5

BUSINESS & RISK FACTORS Table of Contents

Index to Financial Statements

Workplace Health and Safety

1 unchanged sentence

This includes administering a comprehensive occupational injury- and illness-prevention program and training for team members.

In 2020 we invested more than $1 billion in the well-being, health, and safety of our team members and guests.

Since the start of the COVID-19 pandemic in 2020, we have continued to invest in the well-being, health, and safety of our team members and guests.

We extended certain benefits to our team members in light of the COVID-19 pandemic, including bonuses, fully-paid leaves for up to 30 days, free back-up dependent care, and a variety of mental, emotional, and physical wellness resources.

4 unchanged sentences

The Liquidity and Capital Resources section in MD&A provides additional details.

We compete with traditional and internet retailers, including department stores, off-price general merchandise retailers, wholesale clubs, category-specific retailers, drug stores, supermarkets, and other forms of retail commerce.

Our ability to positively differentiate ourselves from other retailers and provide compelling value to our guests largely determines our competitive position within the retail industry.

2 unchanged sentences

Our principal trademarks, including Target, our "Expect More.

Pay Less." brand promise, and our "Bullseye Design," have been registered with the United States (U.S.) Patent and Trademark Office.

Pay Less." brand promise, and our "Bullseye Design," ha ve been registered with the U.S.

Patent and Trademark Office.

We also seek to obtain and preserve intellectual property protection for our brands.

TARGET CORPORATION

2020 Form 10-K 4

BUSINESS & RISK FACTORS Table of Contents

Index to Financial Statements

Geographic Information

7 unchanged sentences

Information on our website is not part of this or any other report we file with, or furnish to, the SEC.

TARGET CORPORATION

2021 Form 10-K 6

RISK FACTORS Table of Contents

Index to Financial Statements

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business