What changed in this filing

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Item 1. Business

2024-03-13 compared with 2023-03-08 · 69 added, 54 removed, 108 unchanged (53% of the section changed)

4 unchanged sentences

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

Our team, technology, and operations enable us to serve guests, fulfill our purpose, and drive business results through a durable, growth-focused enterprise strategy that differentiates Target in the marketplace.

The six pillars of our strategy are:

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

• Investing to create an engaging, convenient, safe, and differentiated shopping experience for our guests;

• Leveraging our stores as fulfillment hubs to efficiently meet our guests' needs, whether they purchase online or in-store;

• Engaging with our guests through programs like Target Circle and RedCard to maintain and enhance our relevancy;

• Delivering affordability to our guests;

• Leveraging our size and scale to benefit people, the planet, and our business, primarily through Target Forward, our enterprise sustainability strategy.

Our recent growth in sales demonstrates the strength and relevance of Target’s strategy.

Our strategy places stores at the center of our flexible fulfillment approach, with stores fulfilling more than 96 percent of total sales, which provides convenience for our guests at a reduced fulfillment cost.

Target delivers on our purpose of helping all families discover the joy of everyday life through our curated, multi-category assortment, outstanding value, and a team that’s centered on care for each other, our guests, and communities.

Our stores, digital experience, fulfillment services, and loyalty ecosystem also play a critical role in differentiating Target and bringing our purpose to life.

Our strategy aims to expand Target’s relevancy in consumers’ lives and drive traffic, sales , and market share growth.

Core elements include:

• Delighting with newness, style, and value by strengthening our owned brands portfolio, curating leading national brands, and expanding the breadth and depth of signature partnerships.

• Delivering value by providing everyday low pricing and leveraging promotions and our loyalty ecosystem, Target Circle.

• Opening new stores, updating existing stores , and enhancing our digital experience to reach more consumers and provide a reliably convenient, easy , and inspiring shopping experience.

• Transforming our supply chain for increased efficiency, speed, capacity, and reliability across our network.

• Being a favorite discovery destination by making it easy for consumers to discover Target’s products and experiences across different channels and touchpoints, including our stores, our mobile app and website, and social platforms.

• Expanding our capabilities, such as our Roundel advertising business, to leverage our assets and enhance the guest experience.

Our strategy defines how we’ll continue to differentiate Target, and we’ll seek to enable growth through:

• Our Team – A highly engaged, diverse, purpose-driven, and community-oriented team .

• Consumer-Centricity – A deep understanding of consumers .

• Technology – A connected ecosystem of data, insights, and technology, including artificial intelligence .

• Efficiency – Simplify work for our teams to make it easier to deliver a great guest experience.

• Sustainability – Resiliency in our business model through our Target Forward strategy.

Our strategy continues to leverage stores as fulfillment hubs, with stores fulfilling more than 96 percent of total sales, which provides convenience for our guests at a reduced fulfillment cost.

TARGET CORPORATION

2 unchanged sentences

Index to Financial Statements

(a) 2023 consisted of 53 weeks.

The extra week in 2023 contributed $1.7 billion of sales.

Sales by Fulfillment Channel

TARGET CORPORATION

2023 Form 10-K 3

BUSINESS Table of Contents

Index to Financial Statements

Financial Highlights

2 unchanged sentences

The majority of our stores offer a wide assortment of general merchandise and food.

Nearly all of our stores larger than 170,000 square feet offer a variety of general merchandise and a full line of food items comparable to traditional supermarkets.

Most of our stores larger than 170,000 square feet offer a variety of general merchandise and a full line of food items comparable to traditional supermarkets.

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

8 unchanged sentences

Approximately one-third of our sales come from our owned and exclusive brands, including, but not limited to, the brands listed below.

A New Day™ Goodfellow & Co™ Room Essentials™

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

Art Class™ Heyday™ Smartly™

Auden™ Hyde & EEK!

A New Day™ Future Collective™ Original Use™

All in Motion™ Gigglescape™

Art Class™ Good & Gather™ Project 62™

Auden™ Goodfellow & Co™ Room Essentials™

Ava & Viv™ Hearth & Hand™ with Magnolia Shade & Shore™

Boots & Barkley™ Heyday™ Smartly™

Brightroom™ Hyde & EEK!

Boutique™ Smith & Hawken™

Ava & Viv™ JoyLab™ Sonia Kashuk™

Boots & Barkley™ Kindfull™ Spritz™

Brightroom™ Knox Rose™ Stars Above™

Bullseye's Playground™ Kona Sol™ Sun Squad™

Casaluna™ Made By Design™ Threshold™

Cat & Jack™ Market Pantry™ Universal Thread™

Cloud Island™ Mondo Llama™ up & up™

Colsie™ More Than Magic™ Wild Fable™

Embark™ Opalhouse™ Wondershop™

Everspring™ Open Story™ Xhilaration™

Favorite Day™ Original Use™

Future Collective™ Pillowfort™

Good & Gather™ Project 62™

Bullseye's Playground™ JoyLab™ Sonia Kashuk™

Casaluna™ Kindfull™ Spritz™

Cat & Jack™ Knox Rose™ Stars Above™

Cloud Island™ Kona Sol™ Sun Squad™

Colsie™ Made By Design™ Threshold™

Market Pantry™ Universal Thread™

Embark™ Mondo Llama™ up & up™

Everspring™ More Than Magic™ Wild Fable™

Favorite Day™ Opalhouse™ Wondershop™

Open Story™ Xhilaration™

Exclusive Adult Beverage Brands

6 unchanged sentences

Customer Loyalty Programs

Our guests receive a 5 percent discount on nearly all purchases and receive free shipping at Target.com when they use their Target Debit Card, RedCard Reloadable Account, Target Credit Card, or Target MasterCard ® (collectively, RedCards™).

We also seek to drive customer loyalty and trip frequency through our Target Circle program, where members earn 1 percent rewards on nearly all non-RedCard purchases, among other benefits.

The vast majority of merchandise is distributed to our stores through our network of distribution centers.

Our guests receive a 5 percent discount on nearly all purchases and receive free shipping at Target.com when they use their Target Debit Card, Target Credit Card, Target MasterCard ® , or RedCard Reloadable Account (collectively, RedCards™).

We also seek to drive customer loyalty and trip frequency through our Target Circle™ program which offers guests instant discounts and Target Circle Rewards redeemable on future purchases.

In March 2024, we announced changes to Target Circle, including the integration of Target Circle Card™ (formerly RedCard) and the addition of a Target Circle 360™ paid membership option.

Among other benefits, Target Circle 360 members receive access to same-day delivery and our fastest available shipping option with no additional markup or fees.

Most merchandise is distributed to our stores through our network of distribution centers.

Common carriers ship merchandise to and from our distribution centers.

Vendors or third-party distributors ship certain food items and other merchandise directly to our stores.

Merchandise sold through our digital channels is distributed to our guests through guest pick-up at our stores, via common carriers (from stores, distribution centers, vendors, and third-party distributors), and delivery via our wholly owned subsidiary, Shipt, Inc.

Merchandise sold through our digital channels is distributed to our guests through guest pick-up at our stores, via common carriers (from stores, supply chain facilities, vendors, and third-party distributors), and same-day delivery via our wholly owned subsidiary, Shipt, Inc.

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.

8 unchanged sentences

To that end, we strive to foster an engaged, diverse, inclusive, safe, purpose-driven culture where employees, referred to as "team members," have equitable opportunities for success.

As of January 28, 2023, we employed approximately 440,000 full-time, part-time, and seasonal team members.

As of February 3, 2024, we employed approximately 415,000 full-time, part-time, and seasonal team members.

Because of the seasonal nature of the retail business, employment levels peak in the holiday season.

7 unchanged sentences

Diversity, Equity, and Inclusion (DE&I)

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 team members equitably in order to reflect the guests and communities we serve.

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 and EEO-1 report.

We set company-wide DE&I goals to drive progress in these areas.

Developing environments where all team members feel seen, heard, and welcome to belong is part of Target's core value of inclusivity and is fundamental to creating an inclusive guest experience.

We champion workplace inclusion, belonging and diversity with a focus on engaging, developing, advancing and attracting team members equitably in support of our business.

We disclose the composition of our team in our annual Workforce Diversity Report and EEO-1 report.

We set company-wide DE&I goals to drive our business, and learn and grow as an organization.

Compensation and Benefits

3 unchanged sentences

Our compensation packages include a starting wage range of $15 to $24 per hour for U.S.

hourly team members in our stores and supply chain facilities (who comprise the vast majority of our team), a 401(k) plan with dollar-for-dollar 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.

hourly team members in our stores and supply chain facilities (who comprise the vast majority of our team), a 401(k) plan with dollar-for-dollar matching contributions up to five percent of eligible earnings, paid vacation and holidays, family leave, sick pay, merchandise and other discounts, disability insurance, life insurance, healthcare and dependent care flexible spending accounts, tuition-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.

Workplace Health and Safety

We strive to maintain a safe and secure work environment and have specific safety programs.

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

TARGET CORPORATION

2 unchanged sentences

Index to Financial Statements

Workplace Health and Safety

We strive to maintain a safe and secure work environment and have specific safety programs.

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

Throughout the COVID-19 pandemic, we continued to invest in the well-being, health, and safety of our team members with a variety of mental, emotional, and physical wellness resources.

We also enacted dozens of safety, social distancing, and cleaning measures designed to protect our team and guests during the COVID-19 pandemic.

Working Capital

1 unchanged sentence

We achieve effective inventory management by staying in-stock in core product offerings, maintaining positive vendor relationships, and carefully planning inventory levels for seasonal and apparel items to minimize markdowns.

During 2022, rapid changes in consumer preferences and supply chain volatility resulted in increased working capital needs.

The Business Environment and Liquidity and Capital Resources sections in MD&A provide additional details.

27 unchanged sentences

Name Title and Recent Business Experience Age

Boylan Executive Vice President and Chief Communications Officer since February 2021.

Senior Vice President and Chief Communications Officer from January 2019 to February 2021.

Senior Vice President, Communications from June 2017 to January 2019.

Cornell Chair of the Board and Chief Executive Officer since August 2014.

Fiddelke Executive Vice President and Chief Financial Officer since November 2019.

Fiddelke Executive Vice President and Chief Operating Officer since February 2024 and Chief Financial Officer since November 2019.

Senior Vice President, Operations from August 2018 to October 2019.

Senior Vice President, Merchandising Capabilities from March 2017 to August 2018.

Christina Hennington

Executive Vice President and Chief Growth Officer since February 2021.

Christina Hennington Executive Vice President and Chief Growth Officer since February 2021.

Executive Vice President and Chief Merchandising Officer, Hardlines, Essentials and Capabilities from January 2020 to February 2021.

3 unchanged sentences

Senior Vice President, Talent and Organizational Effectiveness from October 2017 to January 2019.

Liu Executive Vice President, Chief Legal & Risk Officer and Corporate Secretary since October 2017.

Mulligan Executive Vice President and Chief Operating Officer since September 2015.

Liu Executive Vice President, Chief Legal & Compliance Officer and Corporate Secretary since October 2023.

Executive Vice President, Chief Legal & Risk Officer and Corporate Secretary from October 2017 to October 2023.

Sylvester Executive Vice President and Chief Guest Experience Officer since May 2022.

2 unchanged sentences

Vice President, Beauty & Dermstore from June 2017 to March 2019.

Ward Executive Vice President and Chief External Engagement Officer since January 2017.

Executive Vice President and Chief Corporate Affairs Officer since October 2023.

Executive Vice President and General Counsel from May 2022 to October 2023.

Senior Vice President, Risk and Employee & Labor Relations from August 2020 to May 2022.

Senior Vice President, Enterprise Risk from September 2017 to August 2020.

As previously disclosed, Mr.

Liu intends to retire as Target's Chief Legal & Compliance Officer and Corporate Secretary in 2024.

Liu intends to remain in his current role until a successor is appointed, and is expected to serve as a strategic advisor for a transition period following such appointment.

In addition, as previously disclosed, in connection with the appointment of Mr.

Fiddelke to the position of Executive Vice President and Chief Operating Officer, Mr.

Fiddelke will remain Chief Financial Officer until a successor is appointed to that role.

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