— First quarter Net Sales were $23.8 billion, compared with $24.5 billion in 2024.
— Digital comparable sales grew 4.7 percent reflecting more than 35 percent growth in same-day delivery powered by Target Circle 360TM and continued growth in Drive Up.
— Key seasonal moments such as Valentine's Day and Easter outperformed non-holiday periods throughout the quarter.
— The Company's limited-time partnership withkate spade was the strongest designer collaboration in the last decade.
— First quarter SG&A Expense and Operating Income included $593 million in pre-tax gains from the settlement of credit card interchange fee litigation.
— First quarter GAAP EPS was $2.27 compared with $2.03 last year. Adjusted EPS1, which excludes the gains from litigation settlements, was $1.30.
— The Company has established an acceleration office led by Michael Fiddelke, with the purpose of enabling faster decisions and execution of its core strategic initiatives in support of a return to growth.
For additional media materials, please visit: https://corporate.target.com/news-features/article/2025/05/q1-2025-earnings
Target Corporation (NYSE: TGT) today announced its first quarter 2025 financial results.
The Company reported first quarter GAAP earnings per share (EPS) of $2.27 and Adjusted earnings per share1 of $1.30 compared with GAAP and Adjusted EPS of $2.03 in 2024. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS.
“In the first quarter, our team navigated a highly challenging environment and focused on delivering the outstanding assortment, experience and value guests expect from Target,” said Brian Cornell, chair and chief executive officer of Target Corporation. “While our sales fell short of our expectations, we saw several bright spots in the quarter, including healthy digital growth, led by a 36 percent increase in same-day delivery through Target Circle 360, and our strongest designer collaboration in more than a decade, kate spade for Target. While these highlights reinforce our confidence in the underlying health of our business, we're not satisfied with current performance and know we have opportunities to deliver faster progress on our roadmap for growth. This morning, we announced the establishment of a multi-year acceleration office, led by Michael Fiddelke, along with several leadership changes. These steps forward are intended to build more speed and agility into how we operate, and position key capabilities to drive long-term profitable growth. With these changes and the financial strength to continue investing in our business, I'm confident we can emerge an even stronger company over time.”
Guidance
For fiscal 2025, the Company now expects a low-single digit decline in sales, and GAAP EPS of $8.00 to $10.00. Adjusted EPS, which excludes the gains from the litigation settlements in the first quarter, is expected to be approximately $7.00 to $9.00.
Operating Results
Comparable sales decreased 3.8 percent in the first quarter, reflecting a comparable store sales decline of 5.7 percent and comparable digital sales growth of 4.7 percent. Net Sales of $23.8 billion in the first quarter were 2.8 percent lower than last year, reflecting amerchandise sales decrease of 3.1 percent and a 13.5 percent increase in other revenue. First quarter operating income of $1.5 billion was 13.6 percent higher than last year.
First quarter operating income margin rate, which includes the one-time benefit of the settlement of credit card interchange fee litigation, was 6.2 percent in 2025, compared with 5.3 percent in 2024. Excludingthe litigation settlement gains, operating income margin rate was 3.7 percent in 2025. First quarter gross margin rate was 28.2 percent, compared with 28.8 percent in 2024, reflecting the net impact of merchandising activities, including higher markdown rates, as well as digital fulfillment and supply chain costs due to increased digital sales penetration and new supply chain facilities coming online. These pressures were partially offset by the benefit of lower inventory shrink. First quarter SG&A expense rate was 19.3 percent in 2025, compared with 21.0 percent in 2024, reflecting credit card interchange fee settlements and disciplined cost management partially offset by the deleveraging impact of lower sales and higher costs, including team member pay and benefits. Without the litigation settlement gains, the SG&A expense rate was 21.7 percent in Q1 2025.
Interest Expense and Taxes
The Company's first quarter 2025 net interest expense was $116 million, compared with $106 million last year, reflecting lower interest income in the current year.
First quarter 2025 effective income tax rate was 25.0 percent, compared with the prior year rate of 22.7 percent, reflecting the impact of discrete tax expenses in the current year.
Capital Deployment and Return on Invested Capital
The Company paid dividends of $510 million in the first quarter, compared with $508 million last year, reflecting a 1.8 percent increase in the dividend per share.
The Company repurchased $251 million of its shares in the first quarter, retiring 2.2 million shares of common stock at an average price of $114.60. As of the end of the quarter, the Company had approximately $8.4 billion of remaining capacity under the repurchase program approved by Target's Board of Directors in August 2021.
For the trailing twelve months through first quarter 2025, after-tax return on invested capital (ROIC) was 15.1 percent, compared with 15.4 percent for the trailing twelve months through first quarter 2024. The tables in this release provide additional information about the Company's ROIC calculation.
Webcast Details
Target will webcast its first quarter earnings conference call at 7:00 a.m. CT today. Investors and the media are invited to listen to the meeting at Corporate.Target.com/Investors (click on “Q1 2025 Target Corporation Earnings Conference Call” under “Events & Presentations”). A replay of the webcast will be provided when available. The replay number is 1-866-360-7721.
Miscellaneous
Statements in this release regarding the Company's future financial performance, including its fiscal 2025 full-year guidance, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties which could cause the Company's results to differ materially. The most important risks and uncertainties are described in Item 1A of the Company's Form 10-K for the fiscal year ended February 1, 2025. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update any forward-looking statement.
About Target
Minneapolis-based Target Corporation (NYSE: TGT) serves guests at nearly 2,000 stores and at Target.com, with the purpose of helping all families discover the joy of everyday life. Since 1946, Target has given 5% of its profit to communities, which today equals millions of dollars a week. Additional company information can be found by visiting the corporate website (corporate.target.com) and press center.
1Adjusted diluted earnings per share (Adjusted EPS), a non-GAAP financial measure, excludes the impact of certain discretely managed items. See the tables of this release for additional information.
TARGET CORPORATIONConsolidated Statements of Operations ThreeMonthsEnded(millions,exceptpersharedata)(unaudited) May 3, 2025 May 4, 2024 ChangeNet sales $ 23,846 $ 24,531 (2.8)Cost of sales 17,128 17,471 (2.0)Selling, general and administrative expenses 4,591 5,146 (10.8)Depreciation and amortization (exclusive of depreciation included in cost of sales) 655 618 6.0Operating income 1,472 1,296 13.6Net interest expense 116 106 8.7Net other income (26) (29) (12.8)Earnings before income taxes 1,382 1,219 13.4Provision for income taxes 346 277 25.1Net earnings $ 1,036 $ 942 10.0%Basic earnings per share $ 2.28 $ 2.04 11.7%Diluted earnings per share $ 2.27 $ 2.03 11.7%Weighted average common shares outstandingBasic 455.0 462.2 (1.6)%Diluted 456.5 463.9 (1.6)%Antidilutive shares 2.4 1.6Dividends declared per share $ 1.12 $ 1.10 1.8%
TARGET CORPORATIONConsolidated Statements of Financial Position(millions, except footnotes) (unaudited) May 3, 2025 February 1, 2025 May 4, 2024AssetsCashandcashequivalents $ 2,887 $ 4,762 $ 3,604Inventory 13,048 12,740 11,730Other current assets 1,824 1,952 1,744Total current assets 17,759 19,454 17,078Property and equipment, net 33,182 33,022 33,114Operating lease assets 3,739 3,763 3,486Other noncurrent assets 1,505 1,530 1,439Total assets $ 56,185 $ 57,769 $ 55,117Liabilities and shareholders' investmentAccounts payable $ 11,823 $ 13,053 $ 11,561Accrued and other current liabilities 6,029 6,110 5,684Current portion of long-term debt and other borrowings 1,139 1,636 2,614Total current liabilities 18,991 20,799 19,859Long-term debt and other borrowings 14,334 14,304 13,487Noncurrent operating lease liabilities 3,564 3,582 3,392Deferred income taxes 2,338 2,303 2,543Other noncurrent liabilities 2,011 2,115 1,996Total noncurrent liabilities 22,247 22,304 21,418Shareholders' investmentCommon stock 38 38 39Additional paid-in capital 7,011 6,996 6,747Retained earnings 8,360 8,090 7,519Accumulated other comprehensive loss (462) (458) (465)Total shareholders' investment 14,947 14,666 13,840Total liabilities and shareholders' investment $ 56,185 $ 57,769 $ 55,117
Common StockAuthorized 6,000,000,000 shares, $0.0833 par value; 454,364,799, 455,566,995, and 462,635,539 shares issued and outstanding as of May3, 2025, February1, 2025, and May4, 2024, respectively.Preferred StockAuthorized 5,000,000 shares, $0.01 par value; no shares were issued or outstanding during any period presented.
TARGET CORPORATIONConsolidated Statements of Cash Flows Three Months Ended(millions)(unaudited) May 3, 2025 May 4, 2024Operating activitiesNet earnings $ 1,036 $ 942Adjustments to reconcile net earnings to cash provided by operating activities:Depreciation and amortization 787 718Share-based compensation expense 69 72Deferred income taxes 36 64Noncash (gains) / losses and other, net (4) (31)Changes in operating accounts:Inventory (308) 156Other assets 146 43Accounts payable (1,344) (524)Accrued and other liabilities (143) (339)Cash provided by operating activities 275 1,101Investing activitiesExpenditures for property and equipment (790) (674)Other 3 3Cash required for investing activities (787) (671)Financing activitiesAdditions to long-term debt 991 -Reductions of long-term debt (1,534) (32)Dividends paid (510) (508)Repurchase of stock (250) -Shares withheld for taxes on share-based compensation (60) (91)Cash required for financing activities (1,363) (631)Net decrease in cash and cash equivalents (1,875) (201)Cash and cash equivalents at beginning of period 4,762 3,805Cash and cash equivalents at end of period $ 2,887 $ 3,604
TARGET CORPORATIONOperating ResultsNet Sales Three Months Ended(millions) (unaudited) May 3, 2025 May 4, 2024Apparel and accessories $ 3,711 $ 3,897Beauty 3,101 3,119Food and beverage 5,902 5,853Hardlines 3,074 3,160Home furnishings and décor 3,220 3,519Household essentials 4,357 4,549Other merchandise sales 40 46Merchandise sales 23,405 24,143Advertising revenue (a) 163 130Credit card profit sharing 141 142Other 137 116Net sales $ 23,846 $ 24,531
(a) Primarily represents revenue related to advertising services provided via the Company's Roundel digital advertising business offering. 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.
Rate Analysis Three Months Ended(unaudited) May 3, 2025 May 4, 2024Gross margin rate (a) 28.2% 28.8%SG&A expense rate (a)(b) 19.3 21.0Depreciation and amortization expense rate (exclusive of depreciation included in cost of sales) 2.7 2.5Operating income margin rate (b) 6.2 5.3
Note: Gross margin is calculated as Net Sales less Cost of Sales. All rates are calculated by dividing the applicable amount by Net Sales.(a) Reflects the impact of a reclassification of prior year amounts, which were not material, to conform with current year presentation. The reclassifications increased Cost of Sales with equal and offsetting decreases to SG&A Expenses.(b) SG&A Expenses and Operating Income for the three months ended May 3, 2025, includes gains, net of legal fees, related to settlements of credit card interchange fee litigation matters in which we were a plaintiff.
Sales Metrics
Comparable sales include all Merchandise Sales, except sales from stores open less than 13 months or that have been closed. Digitally originated sales include all Merchandise Sales initiated through mobile applications and the Company's websites.
Comparable Sales ThreeMonthsEnded(unaudited) May 3, 2025 May 4, 2024Comparable sales change (3.8)% (3.7)%Drivers of change in comparable salesNumber of transactions (traffic) (2.4) (1.9)Average transaction amount (1.4) (1.9)Comparable Sales by Channel ThreeMonthsEnded(unaudited) May 3, 2025 May 4, 2024Stores originated comparable sales change (5.7)% (4.8)%Digitally originated comparable sales change 4.7 1.4Sales by Channel ThreeMonthsEnded(unaudited) May 3, 2025 May 4, 2024Stores originated 80.2% 81.7%Digitally originated 19.8 18.3Total 100% 100%Salesby Fulfillment Channel ThreeMonthsEnded(unaudited) May 3, 2025 May 4, 2024Stores 97.6% 97.7%Other 2.4 2.3Total 100% 100%
Note: 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.
Target Circle Card Penetration Three Months Ended(unaudited) May 3, 2025 May 4, 2024Total Target Circle Card Penetration 17.4% 18.0%
Number of Stores and Retail Square Feet Number of Stores Retail Square Feet (a)(unaudited) May 3, February 1, May 4, May 3, February 1, May 4, 2025 2025 2024 2025 2025 2024170,000 or more sq. ft. 273 273 273 48,824 48,824 48,82450,000 to 169,999 sq. ft. 1,562 1,559 1,547 195,436 195,050 193,52949,999 or less sq. ft. 146 146 143 4,404 4,404 4,301Total 1,981 1,978 1,963 248,664 248,278 246,654
(a) In thousands; reflects total square feet less office, supply chain facility, and vacant space.
TARGET CORPORATION
Reconciliation of Non-GAAP Financial 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 Three Months EndedAdjusted EPS May 3, 2025 May 4, 2024(millions, except per share data) (unaudited) Pretax Net of Tax Per Share Pretax Net of Tax Per Share ChangeGAAP diluted EPS $ 2.27 $ 2.03 11.7%AdjustmentsInterchange fee settlements (a) $ (593) $ (441) $ (0.97) $ – $ – $ -Adjusted EPS $ 1.30 $ 2.03 (35.9)%
(a) Note (b) to the Rate Analysis table provides additional information.
Reconciliation of Non-GAAPAdjusted EPS Guidance(per share) (unaudited) Full Year 2025GAAP diluted earnings per share guidance $8.00 – $10.00Estimated adjustmentsInterchange fee settlements ($0.97)Other (a) -Adjusted diluted earnings per share guidance $7.00 – $9.00
(a) Full-year 2025 GAAP EPS may include the impact of additional discrete items, which will be excluded in calculating Adjusted EPS. The guidance does not currently reflect any such additional discrete items. In the past, these items have included losses on the early retirement of debt and certain other items that are discretely managed.
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 ThreeMonthsEnded(dollars in millions)(unaudited) May 3, 2025 May 4, 2024 ChangeNet earnings $ 1,036 $ 942 10.0%+ Provision for income taxes 346 277 25.1+ Net interest expense 116 106 8.7EBIT $ 1,498 $ 1,325 13.0%+ Total depreciation and amortization (a) 787 718 9.7EBITDA $ 2,285 $ 2,043 11.9%
(a) Represents total depreciation and amortization, including amounts classified within Depreciation and Amortization and within Cost of Sales.
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) (unaudited) Trailing Twelve MonthsNumerator May 3, 2025 May 4, 2024 (a)Operating income $ 5,742 $ 5,675+ Net other income 102 99EBIT 5,844 5,774+ Operating lease interest (b) 165 133- Income taxes (c) 1,373 1,314Net operating profit after taxes $ 4,636 $ 4,593Denominator May 3, 2025 May 4, 2024 April 29, 2023Current portion of long-term debt and other borrowings $ 1,139 $ 2,614 $ 200+ Noncurrent portion of long-term debt 14,334 13,487 16,010+ Shareholders' investment 14,947 13,840 11,605+ Operating lease liabilities (d) 3,922 3,723 2,921- Cash and cash equivalents 2,887 3,604 1,321Invested capital $ 31,455 $ 30,060 $ 29,415Average invested capital (e) $ 30,757 $ 29,737After-tax return on invested capital (f) 15.1% 15.4%
(a) The trailing twelve months ended May4, 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 22.8 percent and 22.2 percent for the trailing twelve months ended May3, 2025, and May4, 2024, respectively. For the twelve months ended May3, 2025, and May4, 2024, includes tax effect of $1.3billion related to EBIT, and $38million and $30 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 May 3, 2025, includes the impact of after-tax net gains on interchange fee settlements, which increased after-tax ROIC by 1.4 percentage points. Note (b) to the Rate Analysis table provides additional information.
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