What changed in this filing

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Item 1. Business

2025-03-12 compared with 2024-03-13 · 81 added, 66 removed, 111 unchanged (57% of the section changed)

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

Target Corporation 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.

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

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.

When used in this report, the terms "we," "our," "us," "Target," and the "Corporation" mean Target Corporation and its subsidiaries, collectively, unless the context otherwise requires or indicates.

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.

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• 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.

• Expanding our capabilities, such as our Roundel advertising and Target Plus third-party digital marketplace businesses, 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 .

• Our Team – A highly engaged and purpose-driven 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.

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

• Sustainability – Resiliency in our business model.

TARGET CORPORATION

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Index to Financial Statements

The vast majority of our Net Sales are generated by the sale of merchandise to customers.

Our strategy continues to leverage stores as fulfillment hubs, with stores fulfilling more than 96 percent of total Merchandise Sales in each of the last three years, which provides convenience for our guests at a reduced fulfillment cost.

In addition to Merchandise Sales, we generate revenue from other sources, most notably advertising revenue and credit card profit-sharing income.

Note 2 to the Financial Statements provides more information.

(in billions)

$109.1 $107.4 $106.6

(a) 2023 consisted of 53 weeks.

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

Sales by Fulfillment Channel

The extra week in 2023 contributed $1.7 billion of Net Sales.

TARGET CORPORATION

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Index to Financial Statements

Merchandise Sales by Fulfillment Channel

Financial Highlights

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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.

We manage our business across the five core merchandise categories shown below.

We manage our business across the six core merchandise categories shown below.

Within categories, gross margins vary depending on the type of merchandise.

Sales by Merchandise Category

Merchandise Sales by Category

TARGET CORPORATION

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Index to Financial Statements

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

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™ Future Collective™ Original Use™

A significant portion of our Merchandise Sales are from national brand merchandise.

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

A New Day™ Future Collective™ Pillowfort™

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™

Art Class™ Good & Gather™ Room Essentials™

Auden™ Goodfellow & Co™ Shade & Shore™

Ava & Viv™ Hearth & Hand™ with Magnolia Smartly™

Boots & Barkley™ Heyday™ Smith & Hawken™

Brightroom™ Hyde & EEK!

Boutique™ Smith & Hawken™

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™

Boutique™ Sonia Kashuk™

Bullseye's Playground™ JoyLab™ Spritz™

Casaluna™ Kindfull™ Sun Squad™

Cat & Jack™ Kona Sol™ Threshold™

Cloud Island™ Made By Design™ Universal Thread™

Colsie™ Market Pantry™ up & up™

Mondo Llama™ Wild Fable™

Embark™ More Than Magic™ Wondershop™

Everspring™ Opalhouse™ Xhilaration™

Favorite Day™ Open Story™

Original Use™

Exclusive Adult Beverage Brands

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

Our global sourcing operations, which operate from offices in 12 countries around the world, are an important component of our business strategy.

Our global sourcing team identifies, evaluates, and partners with suppliers and vendors from around the world to procure merchandise (most notably for our owned brands) and make it available to our guests through our stores and digital channels.

The global sourcing team is also integral to ensuring quality and value of products, management of product costs, and driving ethical business practices.

Other Capabilities

We generate revenue through a variety of other sources, including Roundel, which provides advertising services to vendors and other third parties;

credit card profit sharing related to our Target Circle Card program;

our third-party digital marketplace—Target Plus;

membership fees;

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, Target Credit Card, Target MasterCard ® , or RedCard Reloadable Account (collectively, RedCards™).

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 Target Circle Card Reloadable Account (collectively, Target Circle Cards).

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.

Among other benefits, Target Circle

TARGET CORPORATION

2024 Form 10-K 5

BUSINESS Table of Contents

Index to Financial Statements

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.

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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

2023 Form 10-K 5

BUSINESS Table of Contents

Index to Financial Statements

Human Capital Management

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

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.

To that end, we strive to foster a highly engaged and purpose-driven culture where all employees, referred to as "team members," have access to opportunity and growth, enabling our team to deliver business results.

As of February 1, 2025, we employed approximately 440,000 full-time, part-time, and seasonal team members.

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This starts with the opportunity to do challenging work and learn on the job and is supplemented by programs and continuous learning that help our team build skills at all levels, including programs focused on specialized skill development, leadership opportunities, coaching, and mentoring.

Our talent and succession planning process supports the development of a diverse talent pipeline for leadership and other critical roles.

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

Diversity, Equity, and Inclusion (DE&I)

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.

Our talent and succession planning process supports the development of a strong talent pipeline for leadership and other critical roles.

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

We are focused on making Target a destination for talent by creating a sense of belonging for our team members.

We believe that this sense of belonging for all is an essential part of our team and culture, which helps fuel the growth of our business.

Compensation and Benefits

Our compensation and benefits are designed to support the financial, mental, and physical well-being of our team members and their families.

We believe in paying team members equitably, regardless of gender, race, or ethnicity, and we regularly review the pay data of U.S.

We believe in paying team members equitably and we regularly review the pay data of U.S.

team members to confirm that we are doing so.

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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

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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.

Working Capital

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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.

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

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, direct-to-consumer brands, and other forms of retail commerce.

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Geographic Information

Nearly all of our revenues are generated within the U.S.

Nearly all of our sales are generated within the U.S.

The vast majority of our property and equipment is located within the U.S.

In addition to our administrative operations headquartered in the U.S., we perform additional administrative functions in Bangalore, India, and perform global sourcing operations from offices in 12 countries, predominantly in Asia and Central America.

Available Information

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Securities and Exchange Commission (SEC).

In addition, the SEC maintains a website (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

In addition, the SEC maintains a website (sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Investors should note that we currently announce material information to our investors and others using filings with the SEC, press releases, public conference calls, webcasts, or our corporate website (corporate.target.com).

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2024 Form 10-K 7

BUSINESS & RISK FACTORS Table of Contents

BUSINESS Table of Contents

Index to Financial Statements

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

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.

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

Executive Vice President and Chief Financial Officer from November 2019 to October 2024.

Executive Vice President and Chief Commercial Officer since July 2024.

Executive Vice President and Chief Food, Essentials and Beauty Officer from January 2024 to July 2024, Executive Vice President and Chief Food and Beverage Officer from February 2021 to January 2024.

Executive Vice President and Chief Marketing, Digital & Strategy Officer from December 2019 to February 2021.

Christina Hennington Executive Vice President and Chief Strategy and Growth Officer since July 2024.

Executive Vice President and Chief Growth Officer from February 2021 to July 2024.

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

Senior Vice President, Group Merchandise Manager, Essentials, Beauty, Hardlines and Services from January 2019 to January 2020.

Senior Vice President, Merchandising Essentials, Beauty and Wellness from April 2017 to January 2019.

Kremer Executive Vice President and Chief Human Resources Officer since January 2019.

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

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.

Executive Vice President and Chief Financial Officer since September 2024.

Prior to joining Target, Mr.

Lee held various leadership positions with PepsiCo, Inc., including as Deputy Chief Financial Officer from November 2023 to September 2024, Senior Vice President, Corporate Finance from October 2022 to November 2023, and Chief Strategy and Transformation Officer and Senior Vice President, PepsiCo Beverages North America, from February 2019 to October 2022.

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

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Senior Vice President, Home from March 2019 to February 2021.

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

Executive Vice President, Chief Legal & Compliance Officer and Corporate Secretary since August 2024.

Prior to joining Target, Ms.

Tu held various leadership positions with Tyson Foods, Inc., including as President, International from October 2022 to August 2024, Chief Administrative Officer from October 2022 to August 2023, Executive Vice President and Chief Legal Officer and Secretary from October 2021 to January 2023, Executive Vice President, General Counsel and Secretary from November 2020 to October 2021, and Executive Vice President and General Counsel from December 2017 to November 2020.

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

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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.

TARGET CORPORATION

2024 Form 10-K 8

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