What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-03-11 compared with 2025-03-12 · 204 added, 147 removed, 914 unchanged (28% of the section changed)

12 unchanged sentences

Advertising Costs

Interchange Fee Settlements

Business Transformation Costs

Fair Value Measurements

15 unchanged sentences

Segment Reporting

Subsequent Event

TARGET CORPORATION

11 unchanged sentences

In addition, our consolidated financial statements have been audited by Ernst & Young LLP, independent registered public accounting firm, whose report also appears on this page.

Cornell /s/ Jim Lee

Chair of the Board and Chief Executive Officer

/s/ Michael J.

Chief Executive Officer

March 11, 2026

3 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of Target Corporation (the Corporation) as of February 1, 2025 and February 3, 2024, the related consolidated statements of operations, comprehensive income, shareholders' investment and cash flows for each of the three years in the period ended February 1, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Corporation at February 1, 2025 and February 3, 2024, and the results of its operations and its cash flows for each of the three years in the period ended February 1, 2025, in conformity with U.S.

We have audited the accompanying consolidated statements of financial position of Target Corporation (the Corporation) as of January 31, 2026 and February 1, 2025, the related consolidated statements of operations, comprehensive income, shareholders' investment and cash flows for each of the three years in the period ended January 31, 2026, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Corporation at January 31, 2026 and February 1, 2025, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2026, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Corporation's internal control over financial reporting as of February 1, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 12, 2025 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Corporation's internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 11, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

18 unchanged sentences

Valuation of Vendor Income Receivable

Description of the Matter At February 1, 2025, the Corporation’s vendor income receivable totaled $543 million.

Description of the Matter At January 31, 2026, the Corporation’s vendor income receivable totaled $542 million.

As discussed in Note 4 of the consolidated financial statements, the Corporation receives consideration for a variety of vendor-sponsored programs, which are primarily recorded as a reduction of cost of sales when earned.

18 unchanged sentences

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f).

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we assessed the effectiveness of our internal control over financial reporting as of February 1, 2025, based on the framework in Internal Control—Integrated Framework (2013) , issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we assessed the effectiveness of our internal control over financial reporting as of January 31, 2026, based on the framework in Internal Control—Integrated Framework (2013) , issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Based on our assessment, we conclude that the Corporation's internal control over financial reporting is effective based on those criteria.

Our internal control over financial reporting as of February 1, 2025, has been audited by Ernst & Young LLP, the independent registered public accounting firm who has also audited our consolidated financial statements, as stated in their report which appears on this page.

Cornell /s/ Jim Lee

Chair of the Board and Chief Executive Officer

Our internal control over financial reporting as of January 31, 2026, has been audited by Ernst & Young LLP, the independent registered public accounting firm who has also audited our consolidated financial statements, as stated in their report which appears on this page.

/s/ Michael J.

Chief Executive Officer

March 11, 2026

3 unchanged sentences

Opinion on Internal Control Over Financial Reporting

We have audited Target Corporation’s internal control over financial reporting as of February 1, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Target Corporation (the Corporation) maintained, in all material respects, effective internal control over financial reporting as of February 1, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Corporation as of February 1, 2025 and February 3, 2024, the related consolidated statements of operations, comprehensive income, shareholders' investment and cash flows for each of the three years in the period ended February 1, 2025, and the related notes and our report dated March 12, 2025 expressed an unqualified opinion thereon.

We have audited Target Corporation’s internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Target Corporation (the Corporation) maintained, in all material respects, effective internal control over financial reporting as of January 31, 2026, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Corporation as of January 31, 2026 and February 1, 2025, the related consolidated statements of operations, comprehensive income, shareholders' investment and cash flows for each of the three years in the period ended January 31, 2026, and the related notes and our report dated March 11, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

23 unchanged sentences

(millions, except per share data) 2025 2024 2023

$ 106,566 $ 107,412 $ 109,120

Net sales $ 104,780 $ 106,566 $ 107,412

Cost of sales 75,511 76,502 77,828

Selling, general, and administrative expenses 21,535 21,969 21,462

21,969 21,462 20,581

Depreciation and amortization (exclusive of depreciation included in cost of sales)

4 unchanged sentences

Net other income ( 95 ) ( 106 ) ( 92 )

( 106 ) ( 92 ) ( 48 )

Earnings before income taxes 4,767 5,261 5,297

18 unchanged sentences

Pension benefit liabilities

22 ( 23 ) ( 113 )

Currency translation adjustment and cash flow hedges

10 unchanged sentences

Consolidated Statements of Financial Position

(millions, except footnotes) February 1, 2025 February 3, 2024

(millions, except footnotes) January 31, 2026 February 1, 2025

Cash and cash equivalents $ 5,488 $ 4,762

2 unchanged sentences

Total current assets 20,005 19,454

Property and equipment

Land 6,735 6,547

Buildings and improvements 38,752 37,066

Fixtures and equipment 8,917 8,765

Computer hardware and software 3,710 3,428

Construction-in-progress 1,185 1,703

Accumulated depreciation ( 26,277 ) ( 24,413 )

Property and equipment, net 33,749 33,022

21 unchanged sentences

Common Stock Authorized 6,000,000,000 shares, $ 0.0833 par value;

455,566,995 shares issued and outstanding as of February 1, 2025;

452,840,187 shares issued and outstanding as of January 31, 2026;

455,566,995 shares issued and outstanding as of February 1, 2025.

14 unchanged sentences

Deferred income taxes ( 55 ) ( 180 ) 298

Noncash losses / (gains) and other, net

Noncash (gains) / losses and other, net

( 100 ) 26 94

Changes in operating accounts:

6 unchanged sentences

Expenditures for property and equipment ( 3,727 ) ( 2,891 ) ( 4,806 )

Proceeds from disposal of property and equipment 3 24 8

Other investments 28 22 16

Cash required for investing activities ( 2,860 ) ( 4,760 ) ( 5,504 )

Cash used in investing activities

( 3,649 ) ( 2,860 ) ( 4,760 )

Financing activities

5 unchanged sentences

( 67 ) ( 99 ) ( 127 )

Stock option exercises — — 4

Cash required for financing activities ( 3,550 ) ( 2,285 ) ( 2,196 )

Net increase / (decrease) in cash and cash equivalents

Cash used in financing activities

( 2,187 ) ( 3,550 ) ( 2,285 )

Net increase in cash and cash equivalents

726 957 1,576

Cash and cash equivalents at beginning of period 4,762 3,805 2,229

2 unchanged sentences

Interest paid, net of capitalized interest $ 629 $ 615 $ 605

Income taxes paid 1,055 374 213

Leased assets obtained in exchange for new finance lease liabilities 104 319 104

14 unchanged sentences

Net earnings — — — 4,138 — 4,138

Other comprehensive income — — — — 134 134

Dividends declared — — — ( 1,931 ) — ( 1,931 )

Repurchase of stock ( 12.5 ) ( 1 ) 119 ( 2,764 ) — ( 2,646 )

Other comprehensive loss

— — — — ( 41 ) ( 41 )

Dividends declared, $ 4.38 per share

— — — ( 2,050 ) — ( 2,050 )

Share-based compensation

1.4 — 153 — — 153

January 28, 2023 460.3 $ 38 $ 6,608 $ 5,005 $ ( 419 ) $ 11,232

February 3, 2024 461.7 $ 38 $ 6,761 $ 7,093 $ ( 460 ) $ 13,432

Net earnings — — — 4,091 — 4,091

Other comprehensive loss

Other comprehensive income

Dividends declared, $ 4.46 per share

— — — ( 2,080 ) — ( 2,080 )

Dividends declared — — — ( 2,050 ) — ( 2,050 )

Repurchase of stock ( 7.2 ) ( 1 ) — ( 1,014 ) — ( 1,015 )

Share-based compensation

3 unchanged sentences

Other comprehensive income

Dividends declared — — — ( 2,080 ) — ( 2,080 )

— — — — 41 41

Dividends declared, $ 4.54 per share

— — — ( 2,095 ) — ( 2,095 )

Repurchase of stock ( 3.8 ) — — ( 403 ) — ( 403 )

1 unchanged sentence

1.0 — 251 — — 251

February 1, 2025 455.6 $ 38 $ 6,996 $ 8,090 $ ( 458 ) $ 14,666

We declared $ 4.46 , $ 4.38 , and $ 4.14 dividends per share for the twelve months ended February 1, 2025, February 3, 2024, and January 28, 2023, respectively.

January 31, 2026 452.8 $ 38 $ 7,247 $ 9,297 $ ( 417 ) $ 16,165

See accompanying Notes to Consolidated Financial Statements .

16 unchanged sentences

Unless otherwise stated, references to years in this report relate to fiscal years, rather than to calendar years.

Fiscal 2025 ended January 31, 2026, and consisted of 52 weeks.

Fiscal 2024 ended February 1, 2025, and consisted of 52 weeks.

Fiscal 2023 ended February 3, 2024, and consisted of 53 weeks.

Fiscal 2022 ended January 28, 2023, and consisted of 52 weeks.

Fiscal 2026 will end January 30, 2027, and will consist of 52 weeks.

7 unchanged sentences

2025 2024 2023

Apparel and accessories (a)

Apparel & accessories (a)

$ 15,737 $ 16,505 $ 16,485

13,214 13,173 12,538

Food and beverage (c)

Food & beverage (c)

24,136 23,828 23,899

1 unchanged sentence

15,800 15,784 16,162

Home furnishings and décor (e)

Home furnishings & décor (e)

15,608 16,699 17,760

6 unchanged sentences

Other 626 521 420

$ 106,566 $ 107,412 $ 109,120

Net sales $ 104,780 $ 106,566 $ 107,412

(a) Includes apparel for women, men, young adults, kids, toddlers, and babies, as well as jewelry, accessories, and shoes.

9 unchanged sentences

Sales are recognized net of expected returns, which we estimate using historical return patterns and our expectation of future returns.

As of February 1, 2025, and February 3, 2024, the liability for estimated returns was $ 172 million and $ 170 million, respectively.

As of January 31, 2026, and February 1, 2025, the liability for estimated returns was $ 155 million and $ 172 million, respectively.

We routinely enter into arrangements with vendors whereby we do not purchase or pay for merchandise until the merchandise is ultimately sold to a guest.

13 unchanged sentences

Current Period

Liability February 1, 2025

Liability January 31, 2026

Gift card liability (a)

2 unchanged sentences

(b) Net of estimated breakage.

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).

Target Circle program members earn Target Circle Rewards on various transactions.

As of February 1, 2025, and February 3, 2024, deferred revenue of $ 19 million and $ 117 million, respectively, related to our Target Circle program was included in Accrued and Other Current Liabilities.

Advertising revenue – Primarily represents revenue related to advertising services provided via our Roundel digital advertising business offering.

4 unchanged sentences

TD underwrites, funds, and owns Target Circle credit card receivables, controls risk management policies, and oversees regulatory compliance.

Other – Includes commissions earned on third-party sales through our Target Plus third-party digital marketplace, Shipt membership and service revenues, rental income, Target Circle 360 membership revenue, and other miscellaneous revenues.

Other – Includes commissions earned on third-party sales through our Target Plus third-party digital marketplace, Target Circle 360 membership revenue, Shipt membership and service revenues, rental income, and other miscellaneous revenues.

Cost of Sales and Selling, General, and Administrative Expenses

4 unchanged sentences

• Payment term cash discounts

• Import costs

• Tariffs/duties

• Other import costs

• Freight expenses associated with moving

30 unchanged sentences

NOTES Index to Financial Statements

In 2024, we reclassified certain expenses related to our advertising and third-party digital marketplace business offerings to conform to the current year presentation.

The reclassifications increased Cost of Sales by $ 92 million and $ 77 million for 2023 and 2022, respectively, with equal and offsetting decreases to SG&A Expenses.

These reclassifications had no impact on Net Sales, Operating Income, Net Earnings, or Earnings Per Share.

Consideration Received from Vendors

8 unchanged sentences

Digital advertising costs are generally expensed as incurred when the consumer engages with the advertisement through clicks or views, while media broadcast costs are generally expensed at first showing or distribution of the advertisement.

Advertising costs, net of vendor reimbursements, are recorded in SG&A Expenses and were $ 1.5 billion in 2024, $ 1.4 billion in 2023, and $ 1.5 billion in 2022.

Advertising costs, net of vendor reimbursements, are recorded in SG&A Expenses and were $ 1.5 billion in both 2025 and 2024 and $ 1.4 billion in 2023.

Interchange Fee Settlements

In March 2025, we entered into settlement agreements to resolve credit card interchange fee litigation matters in which we were a plaintiff.

As a result of these lump-sum settlements, we recorded gains within SG&A Expenses of $ 593 million, net of legal fees.

Business Transformation Costs

In May 2025, we announced a multi-year initiative to transform various aspects of our business—including our organizational structure, processes, and technology—to enable greater agility and optimize the use of the Company's assets.

Costs incurred in connection with our business transformation initiative include the following:

• Severance and Related Costs — During 2025, we recognized $ 129 million of severance and related costs within SG&A, primarily related to our headquarters workforce reduction.

The majority has been paid as of January 31, 2026.

• Asset-Related Charges and Other Costs — During 2025, we recognized $ 57 million of lease termination costs associated with vacant office space, and $ 64 million of impairment charges and other costs associated with the termination of a commercial partnership and certain other contract terminations within SG&A.

Note 12 provides additional information regarding impairment charges.

TARGET CORPORATION

2025 Form 10-K 53

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Financial Statements

Fair Value Measurements

5 unchanged sentences

Fair Value as of

(millions) Classification Measurement Level February 1, 2025 February 3, 2024

(millions) Classification Measurement Level January 31, 2026 February 1, 2025

Short-term investments (a)

11 unchanged sentences

See Note 18 for additional information on interest rate swaps.

TARGET CORPORATION

2024 Form 10-K 50

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Financial Statements

Significant Financial Instruments Not Measured at Fair Value (a)

As of February 1, 2025 As of February 3, 2024

As of January 31, 2026 As of February 1, 2025

(millions) Carrying

3 unchanged sentences

(a) The carrying amounts of certain other current assets, commercial paper, accounts payable, and certain accrued and other current liabilities approximate fair value due to their short-term nature.

(b) The fair value of debt is generally measured using a discounted cash flow analysis based on current market interest rates for the same or similar types of financial instruments and would be classified as Level 2.

These amounts exclude commercial paper, unamortized swap valuation adjustments, and lease liabilities.

(b) The fair value of long-term debt is estimated using Level 2 inputs based on quoted prices for the instruments.

Where quoted prices are not available, fair value is estimated using discounted cash flows and market-based expectations for interest rates.

These amounts exclude commercial paper, fair value hedge adjustments, and lease liabilities.

Cash and Cash Equivalents

3 unchanged sentences

Cash and Cash Equivalents

February 1, 2025 February 3, 2024

January 31, 2026 February 1, 2025

Cash $ 250 $ 276

4 unchanged sentences

(a) We have access to these funds without any significant restrictions, taxes, or penalties.

As of February 1, 2025, and February 3, 2024, we included book overdrafts of $ 157 million and $ 173 million, respectively, in Accounts Payable and $ 8 million and $ 10 million, respectively, in Accrued and Other Current Liabilities.

As of January 31, 2026, and February 1, 2025, we included book overdrafts of $ 221 million and $ 157 million, respectively, in Accounts Payable and $ 7 million and $ 8 million, respectively, in Accrued and Other Current Liabilities.

TARGET CORPORATION

2025 Form 10-K 54

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Financial Statements

The vast majority of our inventory is accounted for under the retail inventory accounting method (RIM) using the last-in, first-out (LIFO) method.

3 unchanged sentences

Inventory is also reduced for estimated losses related to shrink and markdowns.

The LIFO provision is calculated based on inventory levels, markup rates, and internally measured retail price indices, and was $ 183 million and $ 153 million as of February 1, 2025, and February 3, 2024, respectively.

The LIFO provision is calculated based on inventory levels, markup rates, and internally measured retail price indices, and was $ 201 million and $ 183 million as of January 31, 2026, and February 1, 2025, respectively.

Under RIM, inventory cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the inventory retail value.

1 unchanged sentence

The use of RIM will result in inventory being valued at the lower of cost or market because permanent markdowns are taken as a reduction of the retail value of inventory.

TARGET CORPORATION

2024 Form 10-K 51

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Financial Statements

Other Current Assets

February 1, 2025 February 3, 2024

January 31, 2026 February 1, 2025

Accounts and other receivables $ 1,265 $ 998

10 unchanged sentences

Facility pre-opening costs, including supplies and payroll, are expensed as incurred.

Property and Equipment, Net

January 31, 2026 February 1, 2025

$ 7,023 $ 6,735

Buildings and improvements 40,418 38,752

Fixtures and equipment 9,294 8,917

Computer hardware and software 4,101 3,710

Construction-in-progress 1,303 1,185

Accumulated depreciation

( 28,390 ) ( 26,277 )

Property and equipment, net

$ 33,749 $ 33,022

Estimated Useful Lives Life (Years)

2 unchanged sentences

Computer hardware and software 2 - 7

We review long-lived assets for impairment when performance expectations, events, or changes in circumstances—such as a decision to relocate or close a store, office, or distribution center, discontinue a project, or make significant software changes—indicate that the asset's carrying value may not be recoverable.

TARGET CORPORATION

2025 Form 10-K 55

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Financial Statements

We review long-lived assets for impairment when performance expectations, events, or changes in circumstances—such as a decision to relocate or close a store, office, or supply chain facility, discontinue a project, or make significant software changes—indicate that the asset's carrying value may not be recoverable.

We recognized impairment losses of $ 69 million, $ 68 million, and $ 102 million during 2025, 2024, and 2023, respectively.

4 unchanged sentences

Other Noncurrent Assets

February 1, 2025 February 3, 2024

January 31, 2026 February 1, 2025

Company-owned life insurance investments, net of loans (b)

4 unchanged sentences

(b) Note 24 provides more information on company-owned life insurance investments.

TARGET CORPORATION

2024 Form 10-K 52

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Financial Statements

Supplier Finance Programs

We have arrangements with several financial institutions to act as our paying agents to certain vendors.

The arrangements also permit the financial institutions to provide vendors with an option, at our vendors' sole discretion, to sell their receivables from Target to the financial institutions.

A vendor’s election to receive early payment at a discounted amount from the financial institutions does not change the amount that we must remit to the financial institutions or our payment date, which is up to 120 days from the invoice date.

The arrangements also permit the financial institutions to provide vendors with an option, at our vendors' sole discretion, to elect to receive early payment of our payment obligations from the financial institutions at a discounted amount.

A vendor’s election to receive early payment does not change the amount that we must remit to the financial institutions or our payment date, which is up to 120 days from the invoice date.

We do not pay any fees or pledge any security to these financial institutions under these arrangements.

The arrangements can be terminated by either party with notice ranging up to 120 days.

Our outstanding vendor obligations eligible for early payment, which are included within Accounts Payable on our Consolidated Statements of Financial Position, do not represent actual receivables sold by our vendors to the financial institutions, which have historically been lower.

Our outstanding vendor obligations eligible for early payment, which are included within Accounts Payable on our Consolidated Statements of Financial Position, do not represent actual early payments made under supplier finance programs, which have historically been lower.

Confirmed Obligations Outstanding

1 unchanged sentence

Confirmed Invoices Paid During the Year

February 1, 2025

January 31, 2026

Vendor obligations eligible for early payment

$ 3,666 $ 11,426 $ ( 12,066 ) $ 3,026

TARGET CORPORATION

2025 Form 10-K 56

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Financial Statements

Accrued and Other Current Liabilities

February 1, 2025 February 3, 2024

January 31, 2026 February 1, 2025

Wages and benefits $ 1,565 $ 1,597

2 unchanged sentences

Dividends payable 516 510

Current portion of operating lease liabilities 353 329

Income tax payable 440 334

Current portion of operating lease liabilities 372 353

Workers' compensation and general liability (a)

6 unchanged sentences

Note 21 provides the noncurrent balance of these liabilities.

TARGET CORPORATION

2024 Form 10-K 53

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Financial Statements

Commitments and Contingencies

8 unchanged sentences

We do not believe that any of these identified claims or litigation will be material to our results of operations, cash flows, or financial condition.

Purchase obligations, which include all legally binding contracts such as merchandise royalties, equipment purchases, marketing-related contracts, software acquisition/license commitments, firm minimum commitments for inventory purchases, and service contracts, were $ 1.2 billion as of February 1, 2025.

These purchase obligations are primarily due within three years and recorded as liabilities when goods are received or services are rendered.

Real estate obligations, which include legally binding minimum lease payments for leases signed but not yet commenced, and commitments for the purchase, construction, or remodeling of real estate and facilities, were $ 1.5 billion as of February 1, 2025.

These real estate obligations are primarily due within one year , a portion of which are recorded as liabilities.

3 unchanged sentences

We also issue letters of credit and surety bonds in the ordinary course of business.

Trade letters of credit totaled $ 1.5 billion as of February 1, 2025, a portion of which are reflected in Accounts Payable.

Standby letters of credit and surety bonds, primarily related to insurance and regulatory requirements, totaled $ 509 million as of February 1, 2025.

Trade letters of credit totaled $ 1.2 billion as of January 31, 2026, a portion of which are reflected in Accounts Payable.

Standby letters of credit and surety bonds, primarily related to insurance and regulatory requirements, totaled $ 667 million as of January 31, 2026.

TARGET CORPORATION

4 unchanged sentences

Debt Maturities

(dollars in millions) Weighted-Average Interest Rate at February 1, 2025

February 1, 2025 February 3, 2024

(dollars in millions) Weighted-Average Interest Rate at January 31, 2026 January 31, 2026 February 1, 2025

Due 2025 — % $ — $ 1,500

13 unchanged sentences

Total required principal payments $ 2,000 $ 97 $ 581 $ 1,000 $ 1,230 $ 9,593

In September 2024, we issued $ 750 million of unsecured debt with a fixed rate of 4.5 percent that matures in September 2034.

Our unsecured long-term debt issuances during the year ended January 31, 2026 were as follows:

Debt Issuances

(dollars in millions)

Issuance Date Maturity Date Principal Amount Interest Rate (Fixed)

March 2025 April 2035 $ 1,000 5.00 %

June 2025 June 2028 500 4.35

June 2025 February 2036 500 5.25

We obtain short-term financing from time to time under our commercial paper program.

There was no commercial paper outstanding at any time during the year ended February 1, 2025, or as of February 3, 2024.

During the year ended February 3, 2024, the maximum amount outstanding was $ 90 million, and the average daily amount outstanding was $ 1 million, at a weighted average annual interest rate of 4.8 percent.

There was no commercial paper outstanding at any time during the years ended January 31, 2026, or February 1, 2025.

In October 2025, we obtained a new committed $ 1.0 billion 364-day unsecured revolving credit facility that will expire in October 2026 and terminated our prior 364-day facility.

9 unchanged sentences

Note 8 provides the fair value and classification of these instruments.

Under our swap agreements, we pay a floating rate equal to the daily Secured Overnight Financing Rate (SOFR) compounded over six months and receive a weighted average fixed rate of 2.8 percent.

The agreements have a weighted average remaining maturity of 4.5 years.

As of February 1, 2025, and February 3, 2024, interest rate swaps with notional amounts totaling $ 2.20 billion and $ 2.45 billion were designated as fair value hedges, and all were considered to be perfectly effective under the shortcut method during 2024 and 2023.

TARGET CORPORATION

2 unchanged sentences

NOTES Index to Financial Statements

Under our swap agreements, we pay a floating rate equal to the daily Secured Overnight Financing Rate (SOFR) compounded over six months and receive a weighted average fixed rate of 2.8 percent.

The agreements have a weighted average remaining maturity of 3.5 years.

As of January 31, 2026, and February 1, 2025, interest rate swaps with notional amounts totaling $ 2.20 billion were designated as fair value hedges, and all were considered to be perfectly effective under the shortcut method during 2025 and 2024.

Effect of Hedges on Debt

February 1, 2025 February 3, 2024

January 31, 2026 February 1, 2025

Long-term debt and other borrowings

27 unchanged sentences

NOTES Index to Financial Statements

Classification February 1, 2025 February 3, 2024

Classification January 31, 2026 February 1, 2025

Operating Operating Lease Assets $ 3,703 $ 3,763

6 unchanged sentences

Total lease liabilities $ 5,947 $ 6,096

(a) Finance lease assets are recorded net of accumulated amortization of $ 857 million and $ 743 million as of February 1, 2025, and February 3, 2024, respectively.

(a) Finance lease assets are recorded net of accumulated amortization of $ 963 million and $ 857 million as of January 31, 2026, and February 1, 2025, respectively.

Classification 2025 2024 2023

Operating lease cost (a)

SG&A Expenses (b)

SG&A Expenses or Cost of Sales (b)

$ 691 $ 641 $ 550

9 unchanged sentences

(b) Supply chain-related amounts are included in Cost of Sales.

(c) Sublease income excludes rental income from owned properties of $ 48 million in 2024, and $ 49 million for each of 2023 and 2022, which is also included in Net Sales.

(c) Sublease income excludes rental income from owned properties of $ 54 million, $ 48 million, and $ 49 million for 2025, 2024, and 2023, respectively, which is also included in Net Sales.

TARGET CORPORATION

15 unchanged sentences

(b) Finance lease payments include $ 286 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $ 100 million of legally binding minimum lease payments for leases signed but not yet commenced.

Lease Term and Discount Rate February 1, 2025 February 3, 2024

Lease Term and Discount Rate January 31, 2026 February 1, 2025

Weighted average remaining lease term (years)

18 unchanged sentences

Earnings before income taxes were $ 4.8 billion, $ 5.3 billion, and $ 5.3 billion during 2025, 2024, and 2023, respectively, including $ 0.8 billion, $ 1.1 billion, and $ 1.2 billion earned by our foreign entities subject to tax outside of the U.S.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), which expands income tax disclosure requirements, primarily related to the effective tax rate reconciliation and income taxes paid.

We adopted the standard prospectively in fiscal 2025.

Tax Rate Reconciliation 2025

(dollars in millions)

federal statutory rate $ 1,001 21.0 %

State income taxes, net of the federal tax benefit 3.7 3.8 3.0

State and local income taxes, net of federal income tax effects (a)

Foreign tax effects

Hong Kong ( 72 ) ( 1.5 )

Other foreign jurisdictions 15 0.3

Effect of cross-border tax laws 25 0.5

Tax credits ( 77 ) ( 1.6 )

Nontaxable or nondeductible Items (b)

( 16 ) ( 0.3 )

Changes in unrecognized tax benefits 19 0.4

Other adjustments ( 1 ) —

Effective tax rate $ 1,062 22.3 %

(a) State taxes in California, New York, Illinois, and Minnesota contributed to the majority of the tax effect in this category.

(b) The tax effects of share based compensation are classified within nontaxable or nondeductible items in the effective tax rate reconciliation for 2025.

Tax Rate Reconciliation for years prior to the adoption of ASU 2023-09

federal statutory rate

21.0 % 21.0 %

State and local income taxes, net of federal income tax effects

International ( 1.1 ) ( 1.3 )

3 unchanged sentences

Effective tax rate 22.2 % 21.9 %

TARGET CORPORATION

2025 Form 10-K 62

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Financial Statements

Provision for Income Taxes

9 unchanged sentences

Total provision $ 1,062 $ 1,170 $ 1,159

TARGET CORPORATION

2024 Form 10-K 59

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Financial Statements

Income Taxes Paid, Net of Refunds

Federal taxes (a)

California 74

International taxes 39

Total income taxes paid $ 1,091

(a) Includes amounts paid for the purchase of federal transferable tax credits.

We made cash payments of $ 1,055 million and $ 374 million for income taxes, net of refunds, during 2024 and 2023, respectively.

Due to deferred tax effects and other payment and refund timing differences, income tax payments are not necessarily indicative of our current tax expense or future cash obligations.

Net Deferred Tax Asset / (Liability)

February 1, 2025 February 3, 2024

January 31, 2026 February 1, 2025

Gross deferred tax assets:

2 unchanged sentences

Self-insured benefits 234 207

Deferred occupancy income 109 118

Lease liabilities 1,534 1,600

Other 144 159

Total gross deferred tax assets 2,613 2,649

7 unchanged sentences

$ ( 2,252 ) $ ( 2,293 )

(a) $ 10 million and $ 8 million of the balances as of February 1, 2025, and February 3, 2024, respectively, is included in Other Noncurrent Assets.

(a) $ 13 million and $ 10 million of the balances as of January 31, 2026, and February 1, 2025, respectively, is included in Other Noncurrent Assets.

TARGET CORPORATION

2025 Form 10-K 63

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Financial Statements

As of January 31, 2026, we had gross tax loss carryforwards of $ 1.2 billion in Canada and $ 0.2 billion in Luxembourg.

The losses are deemed to have a remote possibility of realization;

therefore, a deferred tax asset and valuation allowance are not established.

We file a U.S.

federal income tax return and income tax returns in various states and foreign jurisdictions.

Internal Revenue Service (IRS) is currently auditing certain aspects of the U.S.

federal income tax returns for years 2021 through 2023 and has completed exams for years 2020 and prior.

Internal Revenue Service (IRS) is currently auditing certain aspects of our U.S.

federal income tax returns for 2021-2024, including transfer pricing matters.

The IRS has completed examinations of years 2020 and prior.

With few exceptions, we are no longer subject to state and local or non-U.S.

8 unchanged sentences

Balance at end of period $ 436 $ 433 $ 352

If we were to prevail on all unrecognized tax benefits recorded, the amount that would benefit the effective tax rate was $ 206 million, $ 161 million, and $ 107 million as of February 1, 2025, February 3, 2024, and January 28, 2023, respectively.

If we were to prevail on all unrecognized tax benefits recorded, the amount that would benefit the effective tax rate was $ 226 million, $ 206 million, and $ 161 million as of January 31, 2026, February 1, 2025, and February 3, 2024, respectively.

In addition, the reversal of accrued interest and penalties would also benefit the effective tax rate.

Interest and penalties associated with unrecognized tax benefits are recorded within income tax expense.

During 2024, 2023, and 2022, we recorded an expense / (benefit) from accrued interest and penalties of $ 13 million, $ 6 million, and $( 4 ) million, respectively.

As of February 1, 2025, February 3, 2024, and January 28, 2023, total accrued interest and penalties were $ 21 million, $ 14 million, and $ 7 million, respectively.

It is reasonably possible that the amount of the unrecognized tax benefits with respect to our other unrecognized tax positions will increase or decrease during the next twelve months;

however, an estimate of the amount or range of the change cannot be made at this time.

During 2025, 2024, and 2023, we recorded expense from accrued interest and penalties of $ 12 million, $ 13 million, and $ 6 million, respectively.

As of January 31, 2026, February 1, 2025, and February 3, 2024, total accrued interest and penalties were $ 32 million, $ 21 million, and $ 14 million, respectively.

TARGET CORPORATION

4 unchanged sentences

Other Noncurrent Liabilities

February 1, 2025 February 3, 2024

January 31, 2026 February 1, 2025

Deferred compensation $ 650 $ 628

2 unchanged sentences

Income and other taxes payable 340 338

Pension benefits 31 33

Other 123 200

15 unchanged sentences

This plan allows us to grant equity-based compensation awards, including stock options, stock appreciation rights, performance share units, restricted stock units, restricted stock awards, or a combination of awards (collectively, share-based awards).

The number of unissued common shares reserved for future grants under this plan was 24.1 million as of February 1, 2025.

The number of unissued common shares reserved for future grants under this plan was 15.3 million as of January 31, 2026.

Compensation expense associated with share-based awards is recognized on a straight-line basis over the required service period and reflects estimated forfeitures.

16 unchanged sentences

Vested ( 1,609 ) 176.10

February 1, 2025 4,549 $ 169.59

January 31, 2026 6,138 $ 133.76

(a) Represents the number of shares of restricted stock units, in thousands.

For performance-based restricted stock units, assumes attainment of maximum payout rates as set forth in the performance criteria.

Applying actual or expected payout rates, the number of outstanding restricted stock units and performance-based restricted stock units as of February 1, 2025, was 4.47 million.

Applying actual or expected payout rates, the number of outstanding restricted stock units and performance-based restricted stock units as of January 31, 2026, was 5.98 million.

(b) Weighted average per unit .

The expense recognized each period is partially dependent upon our estimate of the number of shares that will ultimately be issued.

As of February 1, 2025, there was $ 429 million of total unrecognized compensation expense related to restricted stock units, which is expected to be recognized over a weighted average period of 2.5 years.

As of January 31, 2026, there was $ 443 million of total unrecognized compensation expense related to restricted stock units, which is expected to be recognized over a weighted average period of 2.4 years.

The fair value of restricted stock units vested and converted to shares of Target common stock was $ 175 million, $ 225 million, and $ 213 million in 2025, 2024, and 2023, respectively.

1 unchanged sentence

We issue performance share units to certain team members that represent shares potentially issuable in the future.

Issuance is based upon our performance, generally relative to a retail peer group, over a 3-year or 4-year performance period on certain measures primarily including sales growth, after-tax return on invested capital, and earnings per share growth.

Issuance is based upon our performance, generally relative to a retail peer group, over a 3-year performance period on certain measures primarily including sales growth, after-tax return on invested capital, and earnings per share growth.

The fair value of performance share units is calculated based on our stock price on the date of grant.

7 unchanged sentences

Vested ( 145 ) 216.19

February 1, 2025 1,830 $ 177.15

January 31, 2026 2,902 $ 133.60

(a) Represents the number of performance share units, in thousands.

Assumes attainment of maximum payout rates as set forth in the performance criteria.

Applying actual or expected payout rates, the number of outstanding performance share units as of February 1, 2025, was 0.87 million.

Applying actual or expected payout rates, the number of outstanding performance share units as of January 31, 2026, was 1.11 million.

(b) Weighted average per unit.

15 unchanged sentences

We also maintain a frozen, unfunded, nonqualified deferred compensation plan covering less than 50 participants.

Our total liability under these plans was $ 684 million and $ 627 million as of February 1, 2025, and February 3, 2024, respectively.

Our total liability under these plans was $ 717 million and $ 684 million as of January 31, 2026, and February 1, 2025, respectively.

We mitigate our risk of offering the nonqualified plans through investing in company-owned life insurance and prepaid forward contracts that substantially offset our economic exposure to the returns of these plans.

4 unchanged sentences

Nonqualified deferred compensation plans

Benefits expense / (income)

Benefits expense

$ 93 $ 90 $ 59

Related investment (income) / expense

Related investment income

( 65 ) ( 62 ) ( 43 )

28 unchanged sentences

(millions) Classification 2025 2024 2023

Service cost benefits earned SG&A Expenses $ 80 $ 79 $ 94

Service cost benefits earned Cost of Sales and SG&A Expenses

$ 74 $ 80 $ 79

Interest cost on projected benefit obligation Net Other Income

33 unchanged sentences

Plan amendments

Actuarial gain (a)

Actuarial loss / (gain) (a)

35 ( 131 ) — ( 2 )

3 unchanged sentences

$ 3,254 $ 3,225 $ 65 $ 64

(a) The actuarial gain was primarily driven by changes in the weighted average discount rate.

(a) The actuarial loss / (gain) was primarily driven by changes in the weighted average discount rate.

(b) Accumulated benefit obligation—the present value of benefits earned to date assuming no future salary growth—is materially consistent with the projected benefit obligation in each period presented.

49 unchanged sentences

Cash and cash equivalents Carrying value approximates fair value.

Derivatives Valuations are based on observable inputs to the valuation model (e.g., interest rates and credit spreads).

Model inputs are changed only when corroborated by market data.

A credit risk adjustment is made on each swap using observable market credit spreads.

Government securities

3 unchanged sentences

Actuarial gains and losses are recorded in Accumulated Other Comprehensive Loss (AOCI) and amortized using the corridor approach.

As of February 1, 2025, and February 3, 2024, pretax net actuarial losses recorded in AOCI totaled $ 939 million and $ 969 million, respectively.

As of January 31, 2026, and February 1, 2025, pretax net actuarial losses recorded in AOCI totaled $ 857 million and $ 939 million, respectively.

Accumulated Other Comprehensive Loss

6 unchanged sentences

Amounts reclassified

February 1, 2025 $ 266 $ ( 27 ) $ ( 697 ) $ ( 458 )

January 31, 2026 $ 248 $ ( 29 ) $ ( 636 ) $ ( 417 )

Amounts are net of tax.

5 unchanged sentences

Segment Reporting

Our Chief Operating Decision Maker—our Chief Executive Officer—monitors our consolidated operating income and net earnings to evaluate performance and make operating decisions.

Our Chief Operating Decision Maker (CODM)—our Chief Executive Officer—monitors our consolidated net earnings and operating income to evaluate performance and make operating decisions including whether to invest profits into capital projects, make equity or other investments, or return capital to shareholders.

Consolidated assets as presented on our Consolidated Statements of Financial Position is the only view of assets regularly reviewed by our CODM.

We operate as a single segment that includes all of our operations, which are designed to enable guests to purchase products seamlessly in stores or through our digital channels.

10 unchanged sentences

Total cost of sales 75,511 76,502 77,828

Selling, general and administrative expenses 21,969 21,462 20,581

SG&A expenses (b)

21,535 21,969 21,462

Depreciation and amortization (exclusive of depreciation included in cost of sales)

1 unchanged sentence

Operating income

5,117 5,566 5,707

Net interest expense 445 411 502

3 unchanged sentences

Net earnings $ 3,705 $ 4,091 $ 4,138

(a) N ote 3 provides a description of Merchandising Cost of Sales and Supply Chain and Digital Fulfillment Costs.

(a) Note 3 provides a description of Merchandising Cost of Sales and Supply Chain and Digital Fulfillment Costs.

(b) For 2025, includes $ 250 million related to business transformation costs described in Note 7 and $ 593 million of pretax net gains related to settlements of credit card interchange fee litigation matters described in Note 6 .

Subsequent Event

On February 20, 2026, the U.S.

Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were not authorized by the statute.

Target is the importer of record for certain merchandise that was previously subject to such tariffs under IEEPA.

The ruling does not establish a refund process, and significant uncertainty remains regarding how and when any amounts may be recovered.

We are evaluating the ruling and potential actions available to us.

Because the process, timing, and amount of any recovery are uncertain, we are unable to estimate the financial effects, if any, at this time.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

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 8. Financial Statements and Supplementary Data