TARGET CORP 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Financial Summary Second quarter 2025 included the following notable items: • GAAP diluted earnings per share and Adjusted EPS 1 were $2.05. • Net Sales were $25.2 billion, a decrease of 0.9 percent from the comparable prior-year period. • Comparable sales decreased 1.9 percent, reflecting a 1.3 percent decrease in traffic and a 0.6 percent decrease in average transaction amount. ◦ Comparable stores-originated sales declined 3.2 percent. ◦ Comparable digitally-originated sales increased 4.3 percent. • Operating income of $1.3 billion was 19.4 percent lower than the comparable prior-year period. Earnings Per Share Three Months Ended Six Months Ended August 2, 2025 August 3, 2024 Change August 2, 2025 August 3, 2024 Change GAAP diluted earnings per share $ 2.05 $ 2.57 (20.2) % $ 4.32 $ 4.60 (6.1) % Adjustments — — (0.97) — Adjusted diluted earnings per share $ 2.05 $ 2.57 (20.2) % $ 3.35 $ 4.60 (27.1) % 1 Adjusted diluted earnings per share (Adjusted EPS), a non-GAAP metric, excludes the impact of certain items. Management believes that Adjusted EPS is useful in providing period-to-period comparisons of the results of our operations. A reconciliation of non-GAAP financial measures to GAAP measures is provid ed on page 21 . We report after-tax return on invested capital (ROIC) because we believe ROIC provides a meaningful measure of our capital allocation effectiveness over time. For the trailing twelve months ended August 2, 2025, after-tax ROIC was 14.3 percent , compared with 16.6 percent for the trailing twelve months ended August 3, 2024. The calculation of ROIC is provided on page 22 . Business Environment In April 2025, the U.S. imposed a range of tariffs on the vast majority of products manufactured in foreign countries and jurisdictions, and subsequently imposed incremental tariffs, paused, modified, or issued specific exceptions to recently imposed tariffs, and indicated that the U.S. is actively negotiating country-specific agreements that it expects will result in changes to imposed tariff rates. Approximately one-half of the merchandise we offer is sourced from outside the U.S., either directly or indirectly, with China as our single largest source of merchandise we import. We are closely monitoring the evolving consumer and regulatory landscape and adjusting plans as needed, including, but not limited to, vendor negotiations, assortment changes, movements in country of production, adjustments in order unit quantities and timing, and pricing strategies. The Gross Margin Rate section below provides additional information about the impact of such actions. Additionally, we are working closely with industry associations and government leaders, all with a goal to continue delivering the products our guests expect and minimizing the impact of tariffs on our guests. The collective interaction of tariffs, sourcing strategies, pricing actions, consumer response and behaviors, and other factors, could materially impact our sales and results of operations in future periods. TARGET CORPORATION Q2 2025 Form 10-Q 14 MANAGEMENT'S DISCUSSION AND ANALYSIS Table of Contents ANALYSIS OF RESULTS OF OPERATIONS Index to Notes Analysis of Results of Operations Summary of Operating Income Three Months Ended Six Months Ended (dollars in millions) August 2, 2025 August 3, 2024 Change August 2, 2025 August 3, 2024 Change Net sales $ 25,211 $ 25,452 (0.9) % 49,057 $ 49,983 (1.9) % Cost of sales (a) 17,903 17,826 0.4 35,031 35,297 (0.8) SG&A expenses (a) 5,359 5,365 (0.1) 9,950 10,511 (5.3) Depreciation and amortization (exclusive of depreciation included in cost of sales) 632 626 0.9 1,287 1,244 3.4 Operating income $ 1,317 $ 1,635 (19.4) % $ 2,789 $ 2,931 (4.8) % Rate Analysis Three Months Ended Six Months Ended August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024 Gross margin rate (a) 29.0 % 30.0 % 28.6 % 29.4 % SG&A expense rate (a) 21.3 21.1 20.3 21.0 Depreciation and amortization expense rate (exclusive of depreciation included in cost of sales) 2.5 2.5 2.6 2.5 Operating income margin rate 5.2 6.4 5.7 5.9 (a) Reflects the impact of a reclassification of prior year amounts, which were not material, to conform with current year presentation. Note: Gross margin (GM) is calculated as Net Sales less Cost of Sales. All rates are calculated by dividing the applicable amount by Net Sales. We updated the prior period gross margin rate to conform to the current year calculation, which resulted in an approximate 1 percentage point increase in our gross margin rate for the 2024 periods presented. Net Sales Net sales includes all Merchandise Sales and revenues from other sources, most notably advertising revenue and credit card profit-sharing income. Merchandise Sales are net of expected returns, and our estimate of gift card breakage. Comparable sales include all Merchandise Sales, except sales from stores open less than 13 months or that have been closed. We use comparable sales to evaluate the performance of our stores and digital channels by measuring the change in sales for a period over the comparable, prior-year period of equivalent length. Comparable sales measures vary across the retail industry. As a result, our comparable sales calculation is not necessarily comparable to similarly titled measures reported by other companies. Digitally originated sales include all Merchandise Sales initiated through mobile applications and our websites. Our stores fulfill the majority of digitally originated sales, including shipment from stores to guests, store Order Pickup or Drive Up, and Same Day Delivery. Digitally originated sales may also be fulfilled through our distribution centers, our vendors, or other third parties. Merchandise Sales growth—from both comparable sales and new stores—represents an important driver of our long-term profitability. We expect that comparable sales growth will drive a significant portion of our total sales growth. We believe that our ability to successfully differentiate our guests’ shopping experience through a careful combination of merchandise assortment, price, convenience, guest experience, and other factors will over the long-term drive both increasing shopping frequency (number of transactions, or "traffic") and the amount spent each visit (average transaction amount). TARGET CORPORATION Q2 2025 Form 10-Q 15 MANAGEMENT'S DISCUSSION AND ANALYSIS Table of Contents ANALYSIS OF RESULTS OF OPERATIONS Index to Notes Comparable Sales Three Months Ended Six Months Ended August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024 Comparable sales change (1.9) % 2.0 % (2.8) % (0.9) % Drivers of change in comparable sales Number of transactions (traffic) (1.3) 3.0 (1.8) 0.6 Average transaction amount (0.6) (0.9) (1.0) (1.4) Comparable Sales by Channel Three Months Ended Six Months Ended August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024 Stores originated comparable sales change (3.2) % 0.7 % (4.4) % (2.1) % Digitally originated comparable sales change 4.3 8.7 4.5 5.0 Merchandise Sales by Channel Three Months Ended Six Months Ended August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024 Stores originated 81.1 % 82.1 % 80.7 % 81.9 % Digitally originated 18.9 17.9 19.3 18.1 Total 100 % 100 % 100 % 100 % Merchandise Sales by Fulfillment Channel Three Months Ended Six Months Ended August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024 Stores 97.7 % 97.9 % 97.7 % 97.8 % Other 2.3 2.1 2.3 2.2 Total 100 % 100 % 100 % 100 % Note: Merchandise 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 Same Day Delivery. Merchandise Sales by Product Category Three Months Ended Six Months Ended August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024 Apparel & accessories 16 % 17 % 16 % 17 % Beauty 14 14 14 13 Food & beverage 23 22 24 23 Hardlines 14 13 14 13 Home furnishings & décor 15 16 14 15 Household essentials 18 18 18 19 Total 100 % 100 % 100 % 100 % Note 2 to the Financial Statements provides additional product category sales information. The collective interaction of a broad array of macroeconomic, competitive, and consumer behavioral factors, as well as sales mix and the transfer of sales to new stores, makes further analysis of sales metrics infeasible. TARGET CORPORATION Q2 2025 Form 10-Q 16 MANAGEMENT'S DISCUSSION AND ANALYSIS Table of Contents ANALYSIS OF RESULTS OF OPERATIONS Index to Notes We monitor the percentage of purchases that are paid for using Target Circle Cards™ (Target Circle Card Penetration) because our internal analysis has indicated that a meaningful portion of the incremental purchases on our Target Circle Cards are also incremental sales for Target. Guests receive a 5 percent discount on virtually all purchases when they use a Target Circle Card at Target. For the three months ended August 2, 2025, and August 3, 2024, total Target Circle Card Penetration was 16.9 percent and 17.7 percent, respectively. For the six months ended August 2, 2025, and August 3, 2024, total Target Circle Card Penetration was 17.1 percent and 17.9 percent, respectively. TARGET CORPORATION Q2 2025 Form 10-Q 17 MANAGEMENT'S DISCUSSION AND ANALYSIS Table of Contents ANALYSIS OF RESULTS OF OPERATIONS Index to Notes Gross Margin Rate Quarter-to-Date For the three months ended August 2, 2025, our gross margin rate was 29.0 percent compared with 30.0 percent in the comparable prior-year period. The decrease reflected the net impact of • merchandising, including higher markdown rates and purchase order cancellation costs 1 , partially offset by growth in advertising and other revenues; • changes in category sales mix; and • lower inventory shrink. Year-to-Date For the six months ended August 2, 2025, our gross margin rate was 28.6 percent compared with 29.4 percent in the comparable prior-year period. The decrease reflected the net impact of • merchandising activities, including higher markdown rates and purchase order cancellation costs 1 , partially offset by growth in advertising and other revenues; • higher supply chain and digital fulfillment costs, partially due to to new supply chain facilities; • changes in category sales mix; and • lower inventory shrink. 1 The Business Environment section provides additional information. TARGET CORPORATION Q2 2025 Form 10-Q 18 MANAGEMENT'S DISCUSSION AND ANALYSIS Table of Contents ANALYSIS OF RESULTS OF OPERATIONS Index to Notes Selling, General, and Administrative Expense Rate For the three months ended August 2, 2025, our SG&A expense rate was 21.3 percent compared with 21.1 percent for the comparable prior-year period, reflecting the deleveraging impact of lower Net Sales. Higher remodel-related expenses during the three months ended August 2, 2025, were offset by the net impact of cost savings. For the six months ended August 2, 2025, our SG&A expense rate was 20.3 percent compared with 21.0 percent for the comparable prior-year period. The decrease reflected a favorable impact of interchange fee settlements during the first quarter of 2025 of approximately 1.2 percentage points, as further described in Note 3 , partially offset by the deleveraging impact of lower Net Sales, and the net impact of other costs. Store Data Change in Number of Stores Three Months Ended Six Months Ended August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024 Beginning store count 1,981 1,963 1,978 1,956 Opened 1 3 4 10 Closed — — — — Ending store count 1,982 1,966 1,982 1,966 Number of Stores and Number of Stores Retail Square Feet (a) Retail Square Feet August 2, 2025 February 1, 2025 August 3, 2024 August 2, 2025 February 1, 2025 August 3, 2024 170,000 or more sq. ft. 273 273 273 48,824 48,824 48,824 50,000 to 169,999 sq. ft. 1,562 1,559 1,549 195,436 195,050 193,705 49,999 or less sq. ft. 147 146 144 4,445 4,404 4,334 Total 1,982 1,978 1,966 248,705 248,278 246,863 (a) In thousands; reflects total square feet less office, supply chain facility, and vacant space. TARGET CORPORATION Q2 2025 Form 10-Q 19 MANAGEMENT'S DISCUSSION AND ANALYSIS Table of Contents OTHER PERFORMANCE FACTORS Index to Notes Other Performance Factors Net Interest Expense Net interest expense was $116 million and $232 million f or the three and six months ended August 2, 2025, respectively, compared with $110 million and $216 million in the comparable prior-year periods. The increase was primarily due to higher average debt levels. Provision for Income Taxes Our effective income tax rates for the three and six months ended August 2, 2025, were 23.2 percent and 24.2 percent, respectively, compared with 22.9 percent and 22.8 percent in the comparable prior-year periods. For the three month period, the increase is driven by the impact of Pillar Two global minimum taxes. For the six month period, the increase reflects discrete tax expense in the current year, primarily related to share-based compensation, and the impact of Pillar Two global minimum taxes. On July 4, 2025, the U.S. enacted new legislation that includes several U.S. corporate tax provisions, including restoring immediate deductibility of certain capital expenditures, restoring full expensing of domestic research and development costs, and changes in the computations of U.S. taxation on international earnings. We expect the provisions of the legislation to result in a favorable timing shift in our U.S. cash tax payments, with no material impact on our income tax expense. TARGET CORPORATION Q2 2025 Form 10-Q 20 MANAGEMENT'S DISCUSSION AND ANALYSIS Table of Contents RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Index to Notes Reconciliation of Non-GAAP Financial Measures to GAAP Measures To provide additional transparency, we disclose 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, generally accepted accounting principles in the 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 Three Months Ended August 2, 2025 August 3, 2024 (millions, except per share data) Pretax Net of Tax Per Share Pretax Net of Tax Per Share GAAP and Adjusted EPS $ 2.05 $ 2.57 Reconciliation of Non-GAAP Adjusted EPS Six Months Ended Six Months Ended August 2, 2025 August 3, 2024 (millions, except per share data) Pretax Net of Tax Per Share Pretax Net of Tax Per Share GAAP diluted earnings per share $ 4.32 $ 4.60 Adjustments Interchange fee settlements (a) $ (593) $ (441) $ (0.97) $ — $ — $ — Adjusted EPS $ 3.35 $ 4.60 (a) Note 3 to the Financial Statements provides additional information. 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) August 2, 2025 August 3, 2024 Change August 2, 2025 August 3, 2024 Change Net earnings $ 935 $ 1,192 (21.5) % $ 1,971 $ 2,134 (7.6) % + Provision for income taxes 283 353 (19.9) 629 630 (0.2) + Net interest expense 116 110 6.3 232 216 7.5 EBIT $ 1,334 $ 1,655 (19.3) % $ 2,832 $ 2,980 (5.0) % + Total depreciation and amortization (a) 770 743 3.6 1,558 1,461 6.6 EBITDA $ 2,104 $ 2,398 (12.2) % $ 4,390 $ 4,441 (1.2) % (a) Represents total depreciation and amortization, including amounts classified within Depreciation and Amortization and within Cost of Sales. TARGET CORPORATION Q2 2025 Form 10-Q 21 MANAGEMENT'S DISCUSSION AND ANALYSIS Table of Contents RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Index to Notes 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) Trailing Twelve Months Numerator August 2, 2025 August 3, 2024 (a) Operating income $ 5,425 $ 6,113 + Net other income 99 102 EBIT 5,524 6,215 + Operating lease interest (b) 166 146 - Income taxes (c) 1,305 1,427 Net operating profit after taxes $ 4,385 $ 4,934 Denominator August 2, 2025 August 3, 2024 July 29, 2023 Current portion of long-term debt and other borrowings $ 1,136 $ 1,640 $ 1,106 + Noncurrent portion of long-term debt 15,320 13,654 14,926 + Shareholders' investment 15,420 14,429 11,990 + Operating lease liabilities (d) 3,883 3,786 3,104 - Cash and cash equivalents 4,341 3,497 1,617 Invested capital $ 31,418 $ 30,012 $ 29,509 Average invested capital (e) $ 30,715 $ 29,760 After-tax return on invested capital (f) 14.3 % 16.6 % (a) The trailing twelve months ended August 3, 2024, consisted of 53 weeks compared with 52 weeks in the current-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 was owned or accounted for under finance leases. Calculated using the discount rate for each lease and recorded as a component of rent expense within Operating Income. 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 22.9 percent and 22.4 percent for the trailing twelve months ended August 2, 2025, and August 3, 2024, respectively. For the trailing twelve months ended August 2, 2025, and August 3, 2024, includes tax effect of $1.3 billion and $1.4 billion, respectively, related to EBIT and $38 million and $33 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. (f) For the trailing twelve months ended August 2, 2025, includes the impact of after-tax net gains on interchange fee settlements, which increased after-tax ROIC by 1.4 percentage points. Note 3 to the Financial Statements provides additional information. TARGET CORPORATION Q2 2025 Form 10-Q 22 MANAGEMENT'S DISCUSSION AND ANALYSIS Table of Contents ANALYSIS OF FINANCIAL CONDITION Index to Notes Analysis of Financial Condition Liquidity and Capital Resources Capital Allocation We follow a disciplined and balanced approach to capital allocation based on the following priorities, ranked in order of importance: first, we fully invest in opportunities to profitably grow our business, create sustainable long-term value, and maintain our current operations and assets; second, we maintain a competitive quarterly dividend and seek to grow it annually; and finally, we return any excess cash to shareholders by repurchasing shares within the limits of our credit rating goals. Our cash and cash equivalents balance was $4.3 billion, $4.8 billion, and $3.5 billion as of August 2, 2025, February 1, 2025, and August 3, 2024, respectively. Our cash and cash equivalents balance includes short-term investments of $3.3 billion, $3.9 billion, and $2.5 billion as of August 2, 2025, February 1, 2025, and August 3, 2024, respectively. Our investment policy is designed to preserve principal and liquidity of our short-term investments. This policy allows investments in large money market funds or in highly-rated direct short-term instruments that mature in 60 days or less. We also place dollar limits on our investments in individual funds or instruments. Operating Cash Flows Cash flows provided by operating activities were $2.4 billion and $3.3 billion for the six months ended August 2, 2025, and August 3, 2024, respectively. The decrease reflects lower accounts payable leverage and the net earnings impact of lower sales, partially offset by gains on interchange fee settlements discussed in Note 3 to the Financial Statements. Inventory Inventory was $12.9 billion as of August 2, 2025, compared with $12.7 billion and $12.6 billion as of February 1, 2025, and August 3, 2024, respectively. The increase compared to August 3, 2024, reflects higher merchandise costs and continued investment in frequency categories. Investing Cash Flows Cash required for investing activities increased to $1.9 billion for the six months ended August 2, 2025, compared to $1.3 billion for the six months ended August 3, 2024, due to higher capital expenditures. Dividends We paid dividends totaling $509 million ($1.12 per share) and $1,019 million ($2.24 per share) for the three and six months ended August 2, 2025, respectively, and $509 million ($1.10 per share) and $1,017 million ($2.20 per share) for the three and six months ended August 3, 2024, respectively, a per share increase of 1.8 percent. We declared dividends totaling $529 million ($1.14 per share) during the second quarter of 2025 and $527 million ($1.12 per share) during the second quarter of 2024, a per share increase of 1.8 percent. We have paid dividends every quarter since our 1967 initial public offering, and it is our intent to continue to do so in the future. Share Repurchase We deployed $251 million to repurchase shares during the six months ended August 2, 2025. See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds of this Quarterly Report on Form 10-Q and Note 9 to the Financial Statements for more information. TARGET CORPORATION Q2 2025 Form 10-Q 23 MANAGEMENT'S DISCUSSION AND ANALYSIS Table of Contents ANALYSIS OF FINANCIAL CONDITION Index to Notes Financing Our financing strategy is to ensure liquidity and access to capital markets, to maintain a balanced spectrum of debt maturities, and to manage our net exposure to floating interest rate volatility. Within these parameters, we seek to minimize our borrowing costs. Our ability to access the long-term debt and commercial paper markets has provided us with ample sources of liquidity. Our continued access to these markets depends on multiple factors, including the condition of debt capital markets, our operating performance, and maintaining strong credit ratings. As of August 2, 2025, our credit ratings were as follows: Credit Ratings Moody’s Standard and Poor’s Fitch Long-term debt A2 A A Commercial paper P-1 A-1 F1 If our credit ratings were lowered, our ability to access the debt markets, our cost of funds, and other terms for new debt issuances could be adversely impacted. Each of the credit rating agencies reviews its rating periodically, and there is no guarantee our current credit ratings will remain the same as described above. We issued $1.0 billion of unsecured debt in both March and June 2025, and repaid $1.5 billion of unsecured debt in April 2025. Note 7 to the Financial Statements provides additional information. We have the ability to obtain short-term financing from time to time under our commercial paper program and credit facilities. Our committed $1.0 billion 364-day and $3.0 billion unsecured revolving credit facilities that will expire in October 2025 and October 2028, respectively, provide a liquidity backstop to our commercial paper program. No balances were outstanding under either credit facility at any time during 2025 or 2024. There was no commercial paper outstanding as of either August 2, 2025, or August 3, 2024. Note 7 to the Financial Statements provides additional information. Most of our long-term debt obligations contain covenants related to secured debt levels. In addition to a secured debt level covenant, our credit facilities also contain a debt leverage covenant. We are, and expect to remain, in compliance with these covenants. Additionally, as of August 2, 2025, no notes or debentures contained provisions requiring acceleration of payment upon a credit rating downgrade, except that certain outstanding notes allow the note holders to put the notes to us if within a matter of months of each other we experience both (i) a change in control and (ii) our long-term credit ratings are either reduced and the resulting rating is non-investment grade, or our long-term credit ratings are placed on watch for possible reduction and those ratings are subsequently reduced and the resulting rating is non-investment grade. We believe our sources of liquidity, namely operating cash flows, credit facility capacity, and access to capital markets, will continue to be adequate to meet our contractual obligations, working capital, and planned capital expenditures, finance anticipated expansion and strategic initiatives, fund debt maturities, pay dividends, and execute purchases under our share repurchase program for the foreseeable future. New Accounting Pronouncements We do not expect any recently issued accounting pronouncements to have a material effect on our financial statements. TARGET CORPORATION Q2 2025 Form 10-Q 24 MANAGEMENT'S DISCUSSION AND ANALYSIS & SUPPLEMENTAL INFORMATION Table of Contents FORWARD-LOOKING STATEMENTS & CONTROLS AND PROCEDURES Index to Notes Forward-Looking Statements This report contains forward-looking statements, which are based on our current assumptions and expectations. These statements are typically accompanied by the words "anticipate," "believe," "could," “expect,” “may,” “might,” “seek,” "will," “would,” or similar words. The principal forward-looking statements in this report include statements regarding: our future financial and operational performance, the adequacy of and costs associated with our sources of liquidity, the funding of debt maturities, the execution of our share repurchase program, our expected capital expenditures and new lease commitments, the expected compliance with debt covenants, the expected impact of new accounting pronouncements, our intentions regarding future dividends, the expected return on plan assets, the expected outcome of, and adequacy of our reserves for, claims, litigation, and the resolution of tax matters, and changes in our assumptions and expectations. All such forward-looking statements are intended to enjoy the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended. Although we believe there is a reasonable basis for the forward-looking statements, our actual results could be materially different. The most important factors which could cause our actual results to differ from our forward-looking statements are set forth in our description of risk factors included in Part I, Item 1A, Risk Factors of our Form 10-K for the fiscal year ended February 1, 2025, which should be read in conjunction with the forward-looking statements in this report. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update any forward-looking statement. Item 3. Quantitative and Qualitative Disclosures About Market Risk There have been no material changes in our primary risk exposures or management of market risks from those disclosed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk of our Form 10-K for the fiscal year ended February 1, 2025.