|
|
Minnesota
|
|
41-0215170
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
1000 Nicollet Mall, Minneapolis, Minnesota
|
|
55403
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Large accelerated filer
x
|
Accelerated filer
o
|
Non-accelerated filer
o
|
|||
Smaller reporting company
o
|
Emerging growth company
o
|
|
||
Financial Statements
(unaudited)
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
|
|
|
|
||
|
Consolidated Statements of Operations
|
|
|
|
||||
|
Three Months Ended
|
||||||
(millions, except per share data) (unaudited)
|
April 29,
2017 |
|
|
April 30,
2016 |
|
||
Sales
|
$
|
16,017
|
|
|
$
|
16,196
|
|
Cost of sales
|
11,134
|
|
|
11,185
|
|
||
Gross margin
|
4,883
|
|
|
5,011
|
|
||
Selling, general and administrative expenses
|
3,132
|
|
|
3,153
|
|
||
Depreciation and amortization
|
573
|
|
|
546
|
|
||
Earnings from continuing operations before interest expense and income taxes
|
1,178
|
|
|
1,312
|
|
||
Net interest expense
|
144
|
|
|
415
|
|
||
Earnings from continuing operations before income taxes
|
1,034
|
|
|
897
|
|
||
Provision for income taxes
|
357
|
|
|
283
|
|
||
Net earnings from continuing operations
|
677
|
|
|
614
|
|
||
Discontinued operations, net of tax
|
4
|
|
|
18
|
|
||
Net earnings
|
$
|
681
|
|
|
$
|
632
|
|
Basic earnings per share
|
|
|
|
||||
Continuing operations
|
$
|
1.23
|
|
|
$
|
1.03
|
|
Discontinued operations
|
0.01
|
|
|
0.03
|
|
||
Net earnings per share
|
$
|
1.23
|
|
|
$
|
1.06
|
|
Diluted earnings per share
|
|
|
|
||||
Continuing operations
|
$
|
1.22
|
|
|
$
|
1.02
|
|
Discontinued operations
|
0.01
|
|
|
0.03
|
|
||
Net earnings per share
|
$
|
1.23
|
|
|
$
|
1.05
|
|
Weighted average common shares outstanding
|
|
|
|
||||
Basic
|
552.4
|
|
|
598.3
|
|
||
Dilutive impact of share-based awards
|
2.8
|
|
|
5.5
|
|
||
Diluted
|
555.2
|
|
|
603.8
|
|
||
Antidilutive shares
|
3.0
|
|
|
—
|
|
||
Dividends declared per share
|
$
|
0.60
|
|
|
$
|
0.56
|
|
Consolidated Statements of Comprehensive Income
|
|
||||||
|
Three Months Ended
|
||||||
(millions) (unaudited)
|
April 29,
2017 |
|
|
April 30,
2016 |
|
||
Net earnings
|
$
|
681
|
|
|
$
|
632
|
|
Other comprehensive income
|
|
|
|
|
|
||
Pension and other benefit liabilities, net of taxes of $5 and $5
|
7
|
|
|
7
|
|
||
Currency translation adjustment and cash flow hedges, net of taxes of $1 and $1
|
5
|
|
|
5
|
|
||
Other comprehensive income
|
12
|
|
|
12
|
|
||
Comprehensive income
|
$
|
693
|
|
|
$
|
644
|
|
Consolidated Statements of Financial Position
|
|
|
|
|
|
|
|
|
|||
(millions) (unaudited)
|
April 29,
2017 |
|
|
January 28,
2017 |
|
|
April 30,
2016 |
|
|||
Assets
|
|
|
|
|
|
|
|||||
Cash and cash equivalents, including short term investments of $1,135, $1,110 and $2,931
|
$
|
2,680
|
|
|
$
|
2,512
|
|
|
$
|
4,036
|
|
Inventory
|
7,986
|
|
|
8,309
|
|
|
8,459
|
|
|||
Assets of discontinued operations
|
26
|
|
|
69
|
|
|
354
|
|
|||
Other current assets
|
1,047
|
|
|
1,100
|
|
|
1,099
|
|
|||
Total current assets
|
11,739
|
|
|
11,990
|
|
|
13,948
|
|
|||
Property and equipment
|
|
|
|
|
|
|
|
|
|||
Land
|
6,105
|
|
|
6,106
|
|
|
6,120
|
|
|||
Buildings and improvements
|
27,740
|
|
|
27,611
|
|
|
27,198
|
|
|||
Fixtures and equipment
|
5,177
|
|
|
5,503
|
|
|
5,112
|
|
|||
Computer hardware and software
|
2,546
|
|
|
2,651
|
|
|
2,437
|
|
|||
Construction-in-progress
|
379
|
|
|
200
|
|
|
242
|
|
|||
Accumulated depreciation
|
(17,265
|
)
|
|
(17,413
|
)
|
|
(16,060
|
)
|
|||
Property and equipment, net
|
24,682
|
|
|
24,658
|
|
|
25,049
|
|
|||
Noncurrent assets of discontinued operations
|
10
|
|
|
12
|
|
|
81
|
|
|||
Other noncurrent assets
|
787
|
|
|
771
|
|
|
830
|
|
|||
Total assets
|
$
|
37,218
|
|
|
$
|
37,431
|
|
|
$
|
39,908
|
|
Liabilities and shareholders’ investment
|
|
|
|
|
|
|
|
|
|||
Accounts payable
|
$
|
6,537
|
|
|
$
|
7,252
|
|
|
$
|
6,391
|
|
Accrued and other current liabilities
|
4,137
|
|
|
3,737
|
|
|
3,833
|
|
|||
Current portion of long-term debt and other borrowings
|
1,717
|
|
|
1,718
|
|
|
1,627
|
|
|||
Liabilities of discontinued operations
|
1
|
|
|
1
|
|
|
168
|
|
|||
Total current liabilities
|
12,392
|
|
|
12,708
|
|
|
12,019
|
|
|||
Long-term debt and other borrowings
|
11,086
|
|
|
11,031
|
|
|
12,596
|
|
|||
Deferred income taxes
|
869
|
|
|
861
|
|
|
841
|
|
|||
Noncurrent liabilities of discontinued operations
|
18
|
|
|
18
|
|
|
18
|
|
|||
Other noncurrent liabilities
|
1,832
|
|
|
1,860
|
|
|
1,889
|
|
|||
Total noncurrent liabilities
|
13,805
|
|
|
13,770
|
|
|
15,344
|
|
|||
Shareholders’ investment
|
|
|
|
|
|
|
|
|
|||
Common stock
|
46
|
|
|
46
|
|
|
49
|
|
|||
Additional paid-in capital
|
5,674
|
|
|
5,661
|
|
|
5,520
|
|
|||
Retained earnings
|
5,927
|
|
|
5,884
|
|
|
7,593
|
|
|||
Accumulated other comprehensive loss
|
(626
|
)
|
|
(638
|
)
|
|
(617
|
)
|
|||
Total shareholders’ investment
|
11,021
|
|
|
10,953
|
|
|
12,545
|
|
|||
Total liabilities and shareholders’ investment
|
$
|
37,218
|
|
|
$
|
37,431
|
|
|
$
|
39,908
|
|
Consolidated Statements of Cash Flows
|
|
|
|
||||
|
Three Months Ended
|
||||||
(millions) (unaudited)
|
April 29,
2017 |
|
|
April 30,
2016 |
|
||
Operating activities
|
|
|
|
|
|
||
Net earnings
|
$
|
681
|
|
|
$
|
632
|
|
Earnings from discontinued operations, net of tax
|
4
|
|
|
18
|
|
||
Net earnings from continuing operations
|
677
|
|
|
614
|
|
||
Adjustments to reconcile net earnings to cash provided by operations
|
|
|
|
|
|
||
Depreciation and amortization
|
573
|
|
|
546
|
|
||
Share-based compensation expense
|
16
|
|
|
35
|
|
||
Deferred income taxes
|
3
|
|
|
12
|
|
||
Loss on debt extinguishment
|
—
|
|
|
261
|
|
||
Noncash (gains)
/
losses and other, net
|
(28
|
)
|
|
(29
|
)
|
||
Changes in operating accounts
|
|
|
|
|
|||
Inventory
|
323
|
|
|
142
|
|
||
Other assets
|
22
|
|
|
99
|
|
||
Accounts payable
|
(715
|
)
|
|
(1,024
|
)
|
||
Accrued and other liabilities
|
384
|
|
|
(403
|
)
|
||
Cash provided by operating activities—continuing operations
|
1,255
|
|
|
253
|
|
||
Cash provided by
/
(required for) operating activities—discontinued operations
|
48
|
|
|
(6
|
)
|
||
Cash provided by operations
|
1,303
|
|
|
247
|
|
||
Investing activities
|
|
|
|
|
|
||
Expenditures for property and equipment
|
(486
|
)
|
|
(285
|
)
|
||
Proceeds from disposal of property and equipment
|
13
|
|
|
3
|
|
||
Other investments
|
(9
|
)
|
|
3
|
|
||
Cash required for investing activities
|
(482
|
)
|
|
(279
|
)
|
||
Financing activities
|
|
|
|
|
|
||
Additions to long-term debt
|
—
|
|
|
1,979
|
|
||
Reductions of long-term debt
|
(8
|
)
|
|
(863
|
)
|
||
Dividends paid
|
(332
|
)
|
|
(336
|
)
|
||
Repurchase of stock
|
(317
|
)
|
|
(898
|
)
|
||
Stock option exercises
|
4
|
|
|
140
|
|
||
Cash (required for)
/
provided by financing activities
|
(653
|
)
|
|
22
|
|
||
Net increase
/
(decrease) in cash and cash equivalents
|
168
|
|
|
(10
|
)
|
||
Cash and cash equivalents at beginning of period
|
2,512
|
|
|
4,046
|
|
||
Cash and cash equivalents at end of period
|
$
|
2,680
|
|
|
$
|
4,036
|
|
Consolidated Statements of Shareholders’ Investment
|
||||||||||||||||||||||
|
Common
|
|
|
Stock
|
|
|
Additional
|
|
|
|
|
|
Accumulated Other
|
|
|
|
|
|||||
|
Stock
|
|
|
Par
|
|
|
Paid-in
|
|
|
Retained
|
|
|
Comprehensive
|
|
|
|
|
|||||
(millions) (unaudited)
|
Shares
|
|
|
Value
|
|
|
Capital
|
|
|
Earnings
|
|
|
(Loss)
/
Income
|
|
|
Total
|
|
|||||
January 30, 2016
|
602.2
|
|
|
$
|
50
|
|
|
$
|
5,348
|
|
|
$
|
8,188
|
|
|
$
|
(629
|
)
|
|
$
|
12,957
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
2,737
|
|
|
—
|
|
|
2,737
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
|||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,359
|
)
|
|
—
|
|
|
(1,359
|
)
|
|||||
Repurchase of stock
|
(50.9
|
)
|
|
(4
|
)
|
|
—
|
|
|
(3,682
|
)
|
|
—
|
|
|
(3,686
|
)
|
|||||
Stock options and awards
|
4.9
|
|
|
—
|
|
|
313
|
|
|
—
|
|
|
—
|
|
|
313
|
|
|||||
January 28, 2017
|
556.2
|
|
|
$
|
46
|
|
|
$
|
5,661
|
|
|
$
|
5,884
|
|
|
$
|
(638
|
)
|
|
$
|
10,953
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
681
|
|
|
—
|
|
|
681
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
|||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(333
|
)
|
|
—
|
|
|
(333
|
)
|
|||||
Repurchase of stock
|
(4.9
|
)
|
|
—
|
|
|
—
|
|
|
(305
|
)
|
|
—
|
|
|
(305
|
)
|
|||||
Stock options and awards
|
0.4
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||
April 29, 2017
|
551.7
|
|
|
$
|
46
|
|
|
$
|
5,674
|
|
|
$
|
5,927
|
|
|
$
|
(626
|
)
|
|
$
|
11,021
|
|
Fair Value Measurements - Recurring Basis
|
|
Fair Value at
|
||||||||||
(millions)
|
Pricing Category
|
April 29,
2017 |
|
|
January 28,
2017 |
|
|
April 30,
2016 |
|
|||
Assets
|
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|||
Short-term investments
|
Level 1
|
$
|
1,135
|
|
|
$
|
1,110
|
|
|
$
|
2,931
|
|
Other current assets
|
|
|
|
|
|
|
|
|
|
|||
Prepaid forward contracts
|
Level 1
|
37
|
|
|
26
|
|
|
35
|
|
|||
Beneficial interest asset
|
Level 3
|
9
|
|
|
12
|
|
|
16
|
|
|||
Interest rate swaps
(a)
|
Level 2
|
—
|
|
|
1
|
|
|
5
|
|
|||
Other noncurrent assets
|
|
|
|
|
|
|
|
|
|
|||
Interest rate swaps
(a)
|
Level 2
|
4
|
|
|
4
|
|
|
26
|
|
|||
Beneficial interest asset
|
Level 3
|
—
|
|
|
—
|
|
|
9
|
|
|||
Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Other current liabilities
|
|
|
|
|
|
|
|
|
|
|||
Interest rate swaps
(a)
|
Level 2
|
—
|
|
|
—
|
|
|
3
|
|
Significant Financial Instruments not Measured at Fair Value
(a)
(millions)
|
April 29, 2017
|
|
January 28, 2017
|
|
April 30, 2016
|
|||||||||||||||
Carrying
Amount
|
|
Fair
Value
|
|
|
Carrying
Amount
|
|
Fair
Value
|
|
|
Carrying
Amount
|
|
Fair
Value
|
|
|||||||
Debt
(b)
|
$
|
11,717
|
|
$
|
12,610
|
|
|
$
|
11,715
|
|
$
|
12,545
|
|
|
$
|
13,280
|
|
$
|
14,974
|
|
|
Three Months Ended
|
||||||
(millions, except per share data)
|
April 29,
2017 |
|
|
April 30,
2016 |
|
||
Total number of shares purchased
|
4.9
|
|
|
11.4
|
|
||
Average price paid per share
|
$
|
61.68
|
|
|
$
|
78.37
|
|
Total investment
|
$
|
305
|
|
|
$
|
893
|
|
Net Pension Benefits Expense
|
Three Months Ended
|
||||||
(millions)
|
April 29,
2017 |
|
|
April 30,
2016 |
|
||
Service cost
|
$
|
21
|
|
|
$
|
21
|
|
Interest cost
|
34
|
|
|
34
|
|
||
Expected return on assets
|
(61
|
)
|
|
(64
|
)
|
||
Amortization of losses
|
15
|
|
|
12
|
|
||
Amortization of prior service cost
|
(3
|
)
|
|
(3
|
)
|
||
Settlement charges
|
—
|
|
|
—
|
|
||
Total
|
$
|
6
|
|
|
$
|
—
|
|
(millions)
|
Cash Flow
Hedges
|
|
|
Currency
Translation
Adjustment
|
|
|
Pension and
Other
Benefits
|
|
|
Total
|
|
||||
January 28, 2017
|
$
|
(16
|
)
|
|
$
|
(21
|
)
|
|
$
|
(601
|
)
|
|
$
|
(638
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Amounts reclassified from AOCI
|
1
|
|
(a)
|
—
|
|
|
7
|
|
(b)
|
8
|
|
||||
April 29, 2017
|
$
|
(15
|
)
|
|
$
|
(17
|
)
|
|
$
|
(594
|
)
|
|
$
|
(626
|
)
|
Business Segment Results
|
Three Months Ended
|
||||||
(millions)
|
April 29,
2017 |
|
|
April 30,
2016 |
|
||
Sales
|
$
|
16,017
|
|
|
$
|
16,196
|
|
Cost of sales
|
11,134
|
|
|
11,185
|
|
||
Gross margin
|
4,883
|
|
|
5,011
|
|
||
Selling, general, and administrative expenses
(b)
|
3,132
|
|
|
3,142
|
|
||
Depreciation and amortization
|
573
|
|
|
546
|
|
||
Segment earnings before interest expense and income taxes
|
1,178
|
|
|
1,323
|
|
||
Pharmacy Transaction-related costs
(a)(b)
|
—
|
|
|
(11
|
)
|
||
Earnings from continuing operations before interest expense and income taxes
|
1,178
|
|
|
1,312
|
|
||
Net interest expense
|
144
|
|
|
415
|
|
||
Earnings from continuing operations before income taxes
|
$
|
1,034
|
|
|
$
|
897
|
|
Reconciliation of Segment Assets to Total Assets
(millions)
|
April 29,
2017 |
|
|
January 28,
2017 |
|
|
April 30,
2016 |
|
|||
Segment assets
|
$
|
37,182
|
|
|
$
|
37,350
|
|
|
$
|
39,457
|
|
Assets of discontinued operations
|
36
|
|
|
81
|
|
|
435
|
|
|||
Unallocated assets
(a)
|
—
|
|
|
—
|
|
|
16
|
|
|||
Total assets
|
$
|
37,218
|
|
|
$
|
37,431
|
|
|
$
|
39,908
|
|
•
|
GAAP earnings per share from continuing operations were
$1.22
.
|
•
|
Adjusted earnings per share from continuing operations were
$1.21
.
|
•
|
Comparable sales decreased
(1.3)
percent, driven by small declines in both traffic and average transaction amount.
|
•
|
Comparable digital channel sales increased 22 percent.
|
•
|
We returned $637 million to shareholders in the first quarter through dividends and share repurchase.
|
|
Three Months Ended
|
|
|
|
||||||
(dollars in millions)
|
April 29,
2017 |
|
|
April 30,
2016 |
|
|
Percent
Change
|
|
||
Sales
|
$
|
16,017
|
|
|
$
|
16,196
|
|
|
(1.1
|
)%
|
Cost of sales
|
11,134
|
|
|
11,185
|
|
|
(0.5
|
)
|
||
Gross margin
|
4,883
|
|
|
5,011
|
|
|
(2.5
|
)
|
||
SG&A expenses
(a)
|
3,132
|
|
|
3,142
|
|
|
(0.3
|
)
|
||
EBITDA
|
1,751
|
|
|
1,869
|
|
|
(6.3
|
)
|
||
Depreciation and amortization
|
573
|
|
|
546
|
|
|
5.0
|
|
||
EBIT
|
$
|
1,178
|
|
|
$
|
1,323
|
|
|
(11.0
|
)%
|
Rate Analysis
|
Three Months Ended
|
||||
|
April 29,
2017 |
|
|
April 30,
2016 |
|
Gross margin rate
|
30.5
|
%
|
|
30.9
|
%
|
SG&A expense rate
|
19.6
|
|
|
19.4
|
|
EBITDA margin rate
|
10.9
|
|
|
11.5
|
|
Depreciation and amortization expense rate
|
3.6
|
|
|
3.4
|
|
EBIT margin rate
|
7.4
|
|
|
8.2
|
|
Sales by Channel
|
Three Months Ended
|
||||
|
April 29,
2017 |
|
|
April 30,
2016 |
|
Stores
|
95.7
|
%
|
|
96.5
|
%
|
Digital
|
4.3
|
|
|
3.5
|
|
Total
|
100
|
%
|
|
100
|
%
|
Sales by Product Category
|
Three Months Ended
|
||||
|
April 29,
2017 |
|
|
April 30,
2016 |
|
Food, beverage, and pet supplies
|
24
|
%
|
|
24
|
%
|
Household essentials
|
23
|
|
|
23
|
|
Apparel and accessories
|
21
|
|
|
21
|
|
Home furnishings and décor
|
17
|
|
|
17
|
|
Hardlines
|
15
|
|
|
15
|
|
Total
|
100
|
%
|
|
100
|
%
|
Comparable Sales
|
Three Months Ended
|
||||
|
April 29,
2017 |
|
|
April 30,
2016 |
|
Comparable sales change
|
(1.3
|
)%
|
|
1.2
|
%
|
Drivers of change in comparable sales
|
|
|
|
|
|
Number of transactions
|
(0.8
|
)
|
|
0.3
|
|
Average transaction amount
|
(0.6
|
)
|
|
0.9
|
|
Contribution to Comparable Sales Change
|
Three Months Ended
|
||||
|
April 29,
2017 |
|
|
April 30,
2016 |
|
Stores channel comparable sales change
|
(2.2
|
)%
|
|
0.6
|
%
|
Digital channel contribution to comparable sales change
|
0.8
|
|
|
0.6
|
|
Total comparable sales change
|
(1.3
|
)%
|
|
1.2
|
%
|
REDcard Penetration
|
Three Months Ended
|
||||
|
April 29,
2017 |
|
|
April 30,
2016 |
|
Target Debit Card
|
13.5
|
%
|
|
13.0
|
%
|
Target Credit Cards
|
11.0
|
|
|
10.4
|
|
Total REDcard Penetration
|
24.5
|
%
|
|
23.4
|
%
|
Change in Number of Stores
|
Three Months Ended
|
||||
|
April 29,
2017 |
|
|
April 30,
2016 |
|
Beginning store count
|
1,802
|
|
|
1,792
|
|
Opened
|
5
|
|
|
1
|
|
Closed
|
—
|
|
|
—
|
|
Ending store count
|
1,807
|
|
|
1,793
|
|
Number of Stores and
Retail Square Feet |
Number of Stores
|
|
Retail Square Feet
(a)
|
||||||||||
April 29,
2017 |
|
January 28,
2017 |
|
April 30,
2016 |
|
|
April 29,
2017 |
|
January 28,
2017 |
|
April 30,
2016 |
|
|
170,000 or more sq. ft.
|
276
|
|
276
|
|
278
|
|
|
49,328
|
|
49,328
|
|
49,688
|
|
50,000 to 169,999 sq. ft.
|
1,505
|
|
1,504
|
|
1,505
|
|
|
189,746
|
|
189,620
|
|
189,677
|
|
49,999 or less sq. ft.
|
26
|
|
22
|
|
10
|
|
|
709
|
|
554
|
|
211
|
|
Total
|
1,807
|
|
1,802
|
|
1,793
|
|
|
239,783
|
|
239,502
|
|
239,576
|
|
|
|
Three Months Ended
|
||||||||||||||||||||||
|
|
April 29, 2017
|
|
April 30, 2016
|
||||||||||||||||||||
(millions, except per share data)
|
|
Pretax
|
|
|
Net of Tax
|
|
|
Per Share Amounts
|
|
|
Pretax
|
|
|
Net of Tax
|
|
|
Per Share Amounts
|
|
||||||
GAAP diluted earnings per share from continuing operations
|
|
|
|
|
|
$
|
1.22
|
|
|
|
|
|
|
$
|
1.02
|
|
||||||||
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loss on early retirement of debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
261
|
|
|
$
|
159
|
|
|
$
|
0.26
|
|
Pharmacy Transaction-related costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
7
|
|
|
0.01
|
|
||||||
Resolution of income tax matters
|
|
—
|
|
|
(7
|
)
|
|
(0.01
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||||
Adjusted diluted earnings per share from continuing operations
|
|
|
|
|
|
$
|
1.21
|
|
|
|
|
|
|
$
|
1.29
|
|
After-Tax Return on Invested Capital
|
|
|
||||||||||
|
|
|
|
|
||||||||
Numerator
|
|
Trailing Twelve Months
|
|
|
||||||||
(dollars in millions)
|
|
April 29,
2017 |
|
|
April 30,
2016 |
|
|
|
||||
Earnings from continuing operations before interest expense and income taxes
|
|
$
|
4,835
|
|
|
$
|
5,688
|
|
|
|
||
+ Operating lease interest
(a)(b)
|
|
72
|
|
|
82
|
|
|
|
||||
Adjusted earnings from continuing operations before interest expense and income taxes
|
|
4,907
|
|
|
5,770
|
|
|
|
||||
- Income taxes
(c)
|
|
1,638
|
|
|
1,840
|
|
|
|
||||
Net operating profit after taxes
|
|
$
|
3,269
|
|
|
$
|
3,930
|
|
|
|
Denominator
(dollars in millions)
|
|
April 29,
2017 |
|
|
April 30,
2016 |
|
|
May 2,
2015 |
|
|||
Current portion of long-term debt and other borrowings
|
|
$
|
1,717
|
|
|
$
|
1,627
|
|
|
$
|
112
|
|
+ Noncurrent portion of long-term debt
|
|
11,086
|
|
|
12,596
|
|
|
12,585
|
|
|||
+ Shareholders' equity
|
|
11,021
|
|
|
12,545
|
|
|
14,174
|
|
|||
+ Capitalized operating lease obligations
(b)(d)
|
|
1,210
|
|
|
1,367
|
|
|
1,495
|
|
|||
- Cash and cash equivalents
|
|
2,680
|
|
|
4,036
|
|
|
2,768
|
|
|||
- Net assets of discontinued operations
|
|
17
|
|
|
249
|
|
|
335
|
|
|||
Invested capital
|
|
$
|
22,337
|
|
|
$
|
23,850
|
|
|
$
|
25,263
|
|
Average invested capital
(e)
|
|
$
|
23,093
|
|
|
$
|
24,556
|
|
|
|
After-tax return on invested capital
(f)
|
|
14.2
|
%
|
|
16.0
|
%
|
|
|
Reconciliation of Capitalized Operating Leases
|
|
Trailing Twelve Months
|
||||||||||||
(dollars in millions)
|
|
April 29,
2017 |
|
|
April 30,
2016 |
|
|
May 2,
2015 |
|
|||||
Total rent expense
|
|
$
|
151
|
|
|
$
|
171
|
|
|
$
|
187
|
|
||
Capitalized operating lease obligations (total rent expense x 8)
|
|
1,210
|
|
|
1,367
|
|
|
1,495
|
|
|||||
Operating lease interest (capitalized operating lease obligations x 6%)
|
|
72
|
|
|
82
|
|
|
n/a
|
|
Credit Ratings
|
Moody’s
|
Standard and Poor’s
|
Fitch
|
Long-term debt
|
A2
|
A
|
A-
|
Commercial paper
|
P-1
|
A-1
|
F2
|
Period
|
Total Number
of Shares
Purchased
|
|
|
Average
Price
Paid per
Share
|
|
|
Total Number of
Shares Purchased
as Part of Publicly Announced Programs
|
|
|
Dollar Value of
Shares that May
Yet Be Purchased
Under Publicly Announced Programs
|
|
||
January 29, 2017 through February 25, 2017
|
|
|
|
|
|
|
|
||||||
Open market and privately negotiated purchases
|
3,556,242
|
|
|
$
|
64.02
|
|
|
3,556,242
|
|
|
$
|
4,507,907,625
|
|
February 26, 2017 through April 1, 2017
|
|
|
|
|
|
|
|
||||||
Open market and privately negotiated purchases
|
1,392,382
|
|
|
55.72
|
|
|
1,392,382
|
|
|
4,430,328,641
|
|
||
April 2, 2017 through April 29, 2017
|
|
|
|
|
|
|
|
||||||
Open market and privately negotiated purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
4,430,328,641
|
|
||
Total
|
4,948,624
|
|
|
$
|
61.68
|
|
|
4,948,624
|
|
|
$
|
4,430,328,641
|
|
|
|
TARGET CORPORATION
|
||
|
|
||
|
|
||
Dated: May 22, 2017
|
By:
|
/s/ Cathy R. Smith
|
|
|
|
Cathy R. Smith
|
|
|
|
Executive Vice President and
|
|
|
|
Chief Financial Officer
|
|
|
|
(Duly Authorized Officer and
|
|
|
|
Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Robert M. Harrison
|
|
|
|
|
Robert M. Harrison
|
|
|
|
Senior Vice President, Chief Accounting Officer
|
|
|
|
and Controller
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit
|
|
Description
|
|
Manner of Filing
|
|
|
|
|
|
(3)A
|
|
Amended and Restated Articles of Incorporation (as amended through June 9, 2010)
|
|
Incorporated by Reference
|
|
|
|
|
|
(3)B
|
|
Bylaws (as amended through November 11, 2015)
|
|
Incorporated by Reference
|
|
|
|
|
|
(12)
|
|
Statements of Computations of Ratios of Earnings to Fixed Charges
|
|
Filed Electronically
|
|
|
|
|
|
(10)JJ
|
|
Form of Price-Vested Stock Option Agreement
|
|
Filed Electronically
|
|
|
|
|
|
(31)A
|
|
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed Electronically
|
|
|
|
|
|
(31)B
|
|
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed Electronically
|
|
|
|
|
|
(32)A
|
|
Certification of the Chief Executive Officer As Adopted Pursuant to 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Filed Electronically
|
|
|
|
|
|
(32)B
|
|
Certification of the Chief Financial Officer As Adopted Pursuant to 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Filed Electronically
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
Filed Electronically
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
Filed Electronically
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
Filed Electronically
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
Filed Electronically
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
Filed Electronically
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
Filed Electronically
|
Ratio of Earnings to Fixed Charges
|
Three Months Ended
|
|
Fiscal Year Ended
|
|||||||||||||||||||
(dollars in millions)
|
Apr 29,
2017 |
|
Apr 30,
2016 |
|
|
Jan 28,
2017 |
|
Jan 30,
2016 |
|
Jan 31,
2015 |
|
Feb 1,
2014 |
|
Feb 2,
2013 |
|
|||||||
Earnings from continuing operations before income taxes
|
$
|
1,034
|
|
$
|
897
|
|
|
$
|
3,965
|
|
$
|
4,923
|
|
$
|
3,653
|
|
$
|
4,121
|
|
$
|
5,056
|
|
Capitalized interest, net
|
5
|
|
5
|
|
|
20
|
|
16
|
|
(1
|
)
|
(14
|
)
|
(12
|
)
|
|||||||
Adjusted earnings from continuing operations before income taxes
|
1,039
|
|
902
|
|
|
3,985
|
|
4,939
|
|
3,652
|
|
4,107
|
|
5,044
|
|
|||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest expense
(a)
|
147
|
|
157
|
|
|
591
|
|
616
|
|
619
|
|
641
|
|
721
|
|
|||||||
Interest portion of rental expense
|
28
|
|
27
|
|
|
107
|
|
108
|
|
108
|
|
108
|
|
106
|
|
|||||||
Total fixed charges
|
175
|
|
184
|
|
|
698
|
|
724
|
|
727
|
|
749
|
|
827
|
|
|||||||
Earnings from continuing operations before income taxes and fixed charges
|
$
|
1,214
|
|
$
|
1,086
|
|
|
$4,683
|
$
|
5,663
|
|
$
|
4,379
|
|
$
|
4,856
|
|
$
|
5,871
|
|
||
Ratio of earnings to fixed charges
|
6.94
|
|
5.90
|
|
|
6.71
|
|
7.82
|
|
6.02
|
|
6.48
|
|
7.10
|
|
1.
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I have reviewed this Quarterly Report on Form 10-Q of Target Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: May 22, 2017
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/s/ Brian C. Cornell
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Brian C. Cornell
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Chairman and Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Target Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: May 22, 2017
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/s/ Cathy R. Smith
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Cathy R. Smith
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Executive Vice President and Chief Financial Officer
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1.
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the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: May 22, 2017
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/s/ Brian C. Cornell
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Brian C. Cornell
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Chairman and Chief Executive Officer
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1.
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the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: May 22, 2017
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/s/ Cathy R. Smith
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Cathy R. Smith
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Executive Vice President and Chief Financial Officer
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