What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-08-28 compared with 2026-05-29 · 92 added, 53 removed, 302 unchanged (32% of the section changed)

1 unchanged sentence

Consolidated Statements of Operations

Three Months Ended

(millions, except per share data) (unaudited) May 2, 2026 May 3, 2025

Three Months Ended Six Months Ended

(millions, except per share data) (unaudited) August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025

Net sales $ 26,539 $ 25,211 $ 51,982 $ 49,057

4 unchanged sentences

Net interest expense 98 116 215 232

Net other income ( 15 ) ( 26 )

Net other expense / (income) 3 ( 17 ) ( 13 ) ( 43 )

Earnings before income taxes 2,459 1,218 3,493 2,600

13 unchanged sentences

Consolidated Statements of Comprehensive Income

Three Months Ended

(millions) (unaudited) May 2, 2026 May 3, 2025

Three Months Ended Six Months Ended

(millions) (unaudited) August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025

Net earnings $ 1,877 $ 935 $ 2,658 $ 1,971

Other comprehensive income / (loss), net of tax

Pension 6 — 13 —

Cash flow hedges and currency translation adjustment ( 5 ) ( 6 ) ( 10 ) ( 10 )

7 unchanged sentences

Consolidated Statements of Financial Position

(millions, except footnotes) (unaudited) May 2, 2026 January 31,

(millions, except footnotes) (unaudited) August 1, 2026 January 31,

2026 August 2,

Cash and cash equivalents $ 5,411 $ 5,488 $ 4,341

24 unchanged sentences

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

454,177,135 , 452,840,187 , and 454,364,799 shares issued and outstanding as of May 2, 2026, January 31, 2026, and May 3, 2025, respectively.

454,291,461 , 452,840,187 , and 454,396,092 shares issued and outstanding as of August 1, 2026, January 31, 2026, and August 2, 2025, respectively.

Preferred Stock Authorized 5,000,000 shares, $ 0.01 par value;

6 unchanged sentences

Consolidated Statements of Cash Flows

Three Months Ended

(millions) (unaudited) May 2, 2026 May 3, 2025

Six Months Ended

(millions) (unaudited) August 1, 2026 August 2, 2025

Operating activities

78 unchanged sentences

May 2, 2026 454.2 $ 38 $ 7,220 $ 9,552 $ ( 415 ) $ 16,395

Net earnings — — — 1,877 — 1,877

Other comprehensive income — — — — 1 1

Dividends declared, $ 1.16 per share

— — — ( 539 ) — ( 539 )

Share-based compensation 0.1 — 109 — — 109

August 1, 2026 454.3 $ 38 $ 7,329 $ 10,890 $ ( 414 ) $ 17,843

See accompanying Notes to Consolidated Financial Statements .

6 unchanged sentences

Accounting Policies

Tariff Refunds

Interchange Fee Settlements

Fair Value Measurements

Property and Equipment

Supplier Finance Programs

17 unchanged sentences

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

The vast majority of our long-lived assets are located within the U.S.

The vast majority of our long-lived assets are located in the U.S.

Due to the seasonal nature of our business, quarterly revenues, expenses, earnings, and cash flows are not necessarily indicative of the results that may be expected for the full year.

TARGET CORPORATION

Q1 2026 Form 10-Q 8

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Notes

Merchandise sales represent the vast majority of our revenues.

We also earn revenues from a variety of other sources, most notably advertising revenue and credit card profit-sharing income.

Net Sales Three Months Ended

(millions) May 2, 2026 May 3, 2025

Net Sales Three Months Ended Six Months Ended

(millions) August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025

Apparel & accessories (a)

$ 4,090 $ 4,086 $ 7,937 $ 7,797

3,639 3,396 7,037 6,498

Food & beverage (c)

5,991 5,588 12,255 11,490

Hardlines (Fun 101) (d)

3,894 3,522 7,415 6,597

Home furnishings & décor (e)

3,668 3,662 6,906 6,880

Household essentials (f)

4,617 4,422 9,187 8,779

Other merchandise sales 48 43 104 83

10 unchanged sentences

(f) Includes household cleaning, paper products, over-the-counter healthcare, vitamins and supplements, baby gear, and pet supplies.

TARGET CORPORATION

Q2 2026 Form 10-Q 8

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Notes

Merchandise sales — We record almost all retail store revenues at the point of sale.

1 unchanged sentence

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

As of May 2, 2026, January 31, 2026, and May 3, 2025, the liability for estimated returns was $ 191 million, $ 155 million, and $ 186 million, respectively.

As of August 1, 2026, January 31, 2026, and August 2, 2025, the liability for estimated returns was $ 178 million, $ 155 million, and $ 179 million, respectively.

Revenue from Target gift card sales is recognized upon gift card redemption, which is typically within one year of issuance.

1 unchanged sentence

2026 Gift Cards Issued During Current Period But Not Redeemed (b)

Revenue Recognized From Beginning Liability May 2,

Revenue Recognized From Beginning Liability August 1,

Gift card liability (a)

4 unchanged sentences

Roundel services are classified as either Net Sales or as a reduction of Cost of Sales or Selling, General, and Administrative (SG&A) Expenses, depending on the nature of the advertising arrangement.

TARGET CORPORATION

Q1 2026 Form 10-Q 9

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Notes

Credit card profit sharing — We receive payments under a credit card program agreement with TD Bank Group (TD).

2 unchanged sentences

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.

Tariff Refunds

Beginning in 2025, we paid tariffs imposed under the International Emergency Economic Powers Act (IEEPA) on certain imported merchandise.

Following the February 2026 Supreme Court ruling that the tariffs imposed under IEEPA were not authorized by the statute and subsequent actions establishing a refund process, we began submitting refund claims.

During the three and six months ended August 1, 2026, we recognized $ 994 million related to IEEPA tariff refunds ("tariff refunds") received during the second quarter of 2026 as a reduction of Cost of Sales.

We continue to pursue additional refund claims.

Refund claims outstanding as of August 1, 2026, have not been recognized in the financial statements.

Interchange Fee Settlements

1 unchanged sentence

As a result of these lump-sum settlements, during the first quarter of 2025, we recorded gains within SG&A Expenses of $ 593 million, net of legal fees.

TARGET CORPORATION

Q2 2026 Form 10-Q 9

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Notes

Fair Value Measurements

1 unchanged sentence

Financial Instruments Measured On a Recurring Basis Fair Value

(millions) Classification Measurement Level May 2, 2026 January 31, 2026 May 3, 2025

(millions) Classification Measurement Level August 1, 2026 January 31, 2026 August 2, 2025

Short-term investments Cash and Cash Equivalents Level 1 $ 4,337 $ 4,611 $ 3,348

Prepaid forward contracts Other Current Assets Level 1 25 18 17

Interest rate swaps Other Noncurrent Assets Level 2 — — 1

Interest rate swaps Other Current Liabilities Level 2 — 1 3

1 unchanged sentence

Significant Financial Instruments Not Measured at Fair Value (a)

May 2, 2026 January 31, 2026 May 3, 2025

August 1, 2026 January 31, 2026 August 2, 2025

Value Carrying

6 unchanged sentences

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

TARGET CORPORATION

Q1 2026 Form 10-Q 10

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Notes

Property and Equipment

We review long-lived assets for impairment when store 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.

We recognized impairment charges of $ 33 million for the three and six months ended August 1, 2026, and $ 34 million for the three and six months ended August 2, 2025.

These impairment charges are included in SG&A Expenses.

Supplier Finance Programs

4 unchanged sentences

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

Our outstanding vendor obligations eligible for early payment under these arrangements totaled $ 2.8 billion, $ 3.0 billion, and $ 3.3 billion as of May 2, 2026, January 31, 2026, and May 3, 2025, respectively, and are included within Accounts Payable on our Consolidated Statements of Financial Position.

Our outstanding vendor obligations eligible for early payment under these arrangements totaled $ 3.2 billion, $ 3.0 billion, and $ 2.9 billion as of August 1, 2026, January 31, 2026, and August 2, 2025, respectively, and are included within Accounts Payable on our Consolidated Statements of Financial Position.

These outstanding vendor obligations do not represent actual early payments made under supplier finance programs, which have historically been lower.

TARGET CORPORATION

Q2 2026 Form 10-Q 10

FINANCIAL STATEMENTS Table of Contents

NOTES Index to Notes

Long-Term Debt and Commercial Paper

Our unsecured long-term debt repayments during the three months ended May 2, 2026, were as follows:

Our unsecured long-term debt repayments during the six months ended August 1, 2026, were as follows:

Debt Repayments

2 unchanged sentences

April 2026 April 2026 $ 1,000 2.50 %

In August 2026, we obtained a committed $ 4.0 billion unsecured revolving credit facility that will expire in August 2031.

This new facility replaced our $ 1.0 billion and $ 3.0 billion unsecured revolving credit facilities that were set to expire in October 2026 and October 2028, respectively.

No balances were outstanding under any credit facility at any time during 2026 or 2025.

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 three months ended May 2, 2026, or May 3, 2025.

There was no commercial paper outstanding at any time during the three and six months ended August 1, 2026, or August 2, 2025.

Derivative Financial Instruments

2 unchanged sentences

Note 5 to the Consolidated Financial Statements provides the fair value and classification of these instruments.

We were party to interest rate swaps with notional amounts totaling $ 2.45 billion as of May 2, 2026, and $ 2.20 billion as of January 31, 2026, and May 3, 2025.

We were party to interest rate swaps with notional amounts totaling $ 2.45 billion as of August 1, 2026, and $ 2.20 billion as of January 31, 2026, and August 2, 2025.

We pay a floating rate and receive a fixed rate under each of these agreements.

All of the agreements are designated as fair value hedges, and all were considered to be perfectly effective under the shortcut method during the three months ended May 2, 2026, and May 3, 2025.

All of the agreements are designated as fair value hedges, and all were considered to be perfectly effective under the shortcut method during the three and six months ended August 1, 2026, and August 2, 2025.

Effect of Hedges on Debt

May 2, 2026 January 31, 2026 May 3, 2025

August 1, 2026 January 31, 2026 August 2, 2025

Long-term debt and other borrowings

1 unchanged sentence

Cumulative hedging adjustments, included in carrying amount ( 106 ) ( 55 ) ( 63 )

Effect of Hedges on Net Interest Expense Three Months Ended

(millions) May 2, 2026 May 3, 2025

Effect of Hedges on Net Interest Expense Three Months Ended Six Months Ended

(millions) August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025

Gain (loss) on fair value hedges recognized in Net Interest Expense

9 unchanged sentences

We periodically repurchase shares of our common stock under a board-authorized repurchase program through a combination of open market transactions, accelerated share repurchase arrangements, and other privately negotiated transactions with financial institutions.

Share Repurchase Activity Three Months Ended

(millions, except per share data) May 2, 2026 May 3, 2025

Share Repurchase Activity Three Months Ended Six Months Ended

(millions, except per share data) August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025

Number of shares purchased — — — 2.2

Average price paid per share (a)

$ — $ — $ — $ 114.59

Total investment (a)

$ — $ — $ — $ 251

(a) Amounts include applicable excise tax and commissions.

1 unchanged sentence

We provide pension plan benefits to eligible team members.

Net Pension Benefits (Income) / Expense Three Months Ended

(millions) Classification May 2, 2026 May 3, 2025

Net Pension Benefits Expense / (Income) Three Months Ended Six Months Ended

(millions) Classification August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025

Service cost benefits earned Cost of Sales and SG&A Expenses $ 17 $ 20 $ 35 $ 37

Interest cost on projected benefit obligation Net Other Income 40 42

Expected return on assets Net Other Income ( 64 ) ( 67 )

Amortization of losses Net Other Income 9 —

Interest cost on projected benefit obligation Net Other Expense / (Income) 40 42 80 84

Expected return on assets Net Other Expense / (Income) ( 64 ) ( 68 ) ( 128 ) ( 135 )

Amortization of losses Net Other Expense / (Income) 10 — 19 —

Prior service cost Net Other Expense / (Income) 9 7 9 7

Total $ 12 $ 1 $ 15 $ ( 7 )

4 unchanged sentences

Amounts reclassified ( 9 ) — 13 4

May 2, 2026 $ 244 $ ( 30 ) $ ( 629 ) $ ( 415 )

August 1, 2026 $ 239 $ ( 30 ) $ ( 623 ) $ ( 414 )

Amounts are net of tax.

8 unchanged sentences

Virtually all of our consolidated revenues are generated in the United States.

The vast majority of our properties and equipment are located within the United States.

Business Segment Results Three Months Ended

(millions) May 2, 2026 May 3, 2025

The vast majority of our properties and equipment are located in the United States.

Business Segment Results Three Months Ended Six Months Ended

(millions) August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025

Net sales $ 26,539 $ 25,211 $ 51,982 $ 49,057

Cost of sales

Merchandising cost of sales 16,278 15,355

Merchandising cost of sales (a)

15,775 16,177 32,053 31,531

Supply chain and digital fulfillment costs 1,828 1,726 3,611 3,500

Total cost of sales 18,061 17,128

Selling, general and administrative expenses (a)

Total cost of sales (a)

17,603 17,903 35,664 35,031

Selling, general, and administrative expenses (b)

5,725 5,359 11,286 9,950

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

Operating income (a)

651 632 1,337 1,287

Operating income (a)(b)

2,560 1,317 3,695 2,789

Net interest expense 98 116 215 232

Net other income ( 15 ) ( 26 )

Net other expense / (income) 3 ( 17 ) ( 13 ) ( 43 )

Earnings before income taxes 2,459 1,218 3,493 2,600

1 unchanged sentence

Net earnings $ 1,877 $ 935 $ 2,658 $ 1,971

(a) For the three months ended May 3, 2025, includes $ 593 million of pretax net gains related to settlements of credit card interchange fee litigation matters.

(a) For the three and six months ended August 1, 2026, includes $ 994 million of cost reductions related to tariff refunds.

Note 3 provides additional information.

(b) For the six months ended August 2, 2025, includes $ 593 million of pretax net gains related to settlements of credit card interchange fee litigation matters.

Note 4 provides additional information.

TARGET CORPORATION

3 unchanged sentences

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-Q

Item 1. Financial Statements