Financial Analysis

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. Commitments and Contingencies Contingencies We are exposed to claims and litigation arising in the ordinary course of business and use various methods to resolve these matters in a manner that we believe serves the best interest of our shareholders and other constituents. When a loss is probable, we record an accrual based on the reasonably estimable loss or range of loss. When no point of loss is more likely than another, we record the lowest amount in the estimated range of loss and, if material, disclose the estimated range of loss. We do not record liabilities for reasonably possible loss contingencies, but do disclose a range of reasonably possible losses if they are material and we are able to estimate such a range. If we cannot provide a range of reasonably possible losses, we explain the factors that prevent us from determining such a range. Historically, adjustments to our estimates have not been material. We believe the recorded reserves in our consolidated financial statements are adequate in light of the probable and estimable liabilities. We do not believe that any of these identified claims or litigation will be material to our results of operations, cash flows, or financial c …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Commercial Paper and Long-Term Debt Debt Maturities (dollars in millions) Weighted-Average Interest Rate at January 31, 2026 January 31, 2026 February 1, 2025 Due 2025 % $ $ 1,500 Due 2026-2030 2.9 4,898 4,396 Due 2031-2035 4.9 3,734 2,740 Due 2036-2040 6.3 1,434 938 Due 2041-2045 4.0 1,090 1,089 Due 2046-2050 3.8 1,120 1,120 Due 2051-2052 3.9 2,122 2,121 Total notes and debentures 14,398 13,904 Swap valuation adjustments (55) (125) Finance lease liabilities 2,113 2,161 Less: Amounts due within one year (2,130) (1,636) Long-term debt and other borrowings $ 14,326 $ 14,304 Required Principal Payments (millions) 2026 2027 2028 2029 2030 Thereafter Total required principal payments $ 2,000 $ 97 $ 581 $ 1,000 $ 1,230 $ 9,593 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 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. We also have a committed $3.0 billion unsecured revolving credit facility that will expire i …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Net Sales (millions) 2025 2024 2023 Apparel & accessories (a) $ 15,737 $ 16,505 $ 16,485 Beauty (b) 13,214 13,173 12,538 Food & beverage (c) 24,136 23,828 23,899 Hardlines (d) 15,800 15,784 16,162 Home furnishings & decor (e) 15,608 16,699 17,760 Household essentials (f) 18,017 18,614 18,746 Other merchandise sales 205 217 213 Merchandise sales 102,717 104,820 105,803 Advertising revenue 915 649 522 Credit card profit sharing 522 576 667 Other 626 521 420 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. (b) Includes skin and bath care, cosmetics, hair care, oral care, deodorant, and shaving products. (c) Includes dry and perishable grocery, including snacks, candy, beverages, deli, bakery, meat, produce, and food service (primarily Starbucks) in our stores. (d) Includes electronics, including video games and consoles, toys, sporting goods, entertainment, and luggage. (e) Includes bed and bath, home decor, school/office supplies, storage, small appliances, kitchenware, greeting cards, party supplies, furniture, lighting, home improvement, and seasonal merchandise. (f) Includes household cleaning, paper products, over-the-counter healthcare, vitamins and supplements, baby gear, and pet supplies.

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Share-Based Compensation We maintain a long-term incentive plan for key team members and non-employee members of our Board of Directors. 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 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. Share-based compensation expense recognized in SG&A Expenses was $282 million, $307 million, and $255 million, and the related income tax benefit was $62 million, $66 million, and $56 million, in 2025, 2024, and 2023, respectively. Restricted Stock Units We issue restricted stock units and performance-based restricted stock units generally with 3-year cliff or 4-year graduated vesting from the grant date (collectively restricted stock units) to certain team members. The final number of shares issued under performance-based restricted stock units is based on our total shareholder return relative to a retail peer group over a 3-year performance period. We also regularly issue restricted stock units to our Board of Directors, which vest quarterly in the year they are granted and are settled in shares of Target com …

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Fair Value Measurements Fair value measurements are reported in one of three levels based on the lowest level of significant input used: Level 1 (unadjusted quoted prices in active markets); Level 2 (observable market inputs, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data). Financial Instruments Measured on a Recurring Basis Fair Value as of (millions) Classification Measurement Level January 31, 2026 February 1, 2025 Assets Short-term investments (a) Cash and Cash Equivalents Level 1 $ 4,611 $ 3,893 Prepaid forward contracts (b) Other Current Assets Level 1 18 23 Liabilities Interest rate swaps (c) Other Current Liabilities Level 2 1 Interest rate swaps (c) Other Noncurrent Liabilities Level 2 54 125 (a) Carrying value approximates fair value because maturities are less than three months. (b) Initially valued at transaction price. Subsequently valued by reference to the market price of Target common stock. (c) Valuations are based on observable inputs to the valuation model (e.g., interest rates and credit spreads). See Note 18 for additional information on interest rate swaps. Significant Financial Instruments Not Measured at Fair Value (a) As of January 31, 2026 As of February 1, 2025 (millions) Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt, including current portion (b) $ 14,398 $ 13,732 $ 13,904 $ 12,953 (a) The carrying amounts of certain other current assets, c …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income Taxes 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) Amount Percent U.S. federal statutory rate $ 1,001 21.0 % State and local income taxes, net of federal income tax effects (a) 168 3.5 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 2024 2023 Percent Percent U.S. federal statutory rate 21.0 % 21.0 % State and local income taxes, net of federal income tax effects 3.7 3.8 International (1.1 …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Leases We lease certain retail stores, supply chain facilities, office space, land, and equipment. Leases with an initial term of 12 months or less are not recorded on the Consolidated Statements of Financial Position; we recognize lease expense for these leases on a straight-line basis over the lease term. We combine lease and nonlease components for new and reassessed leases. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 50 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of leased assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. We use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Certain of our lease agreements require reimbursement of real estate taxes, common area maintenance, and insurance, as well as rental payments based on a percentage of retail sales over contractual levels, and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We rent or sublease certain real estate to third parties. Our lease and sublease portfolio consists mainly of operating lease …

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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.

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Pension Plans We have a U.S. qualified defined benefit pension plan covering team members who meet eligibility requirements. This plan is closed to new participants. Active participants accrue benefits under a final average pay feature or a cash balance feature. We also have unfunded, nonqualified pension plans for team members with qualified plan compensation restrictions, as well as international plans. Eligibility and the level of benefits under all plans vary depending on each team member's full-time or part-time status, date of hire, age, length of service, and/or compensation. Funded Status Qualified Plan Nonqualified and International Plans (millions) 2025 2024 2025 2024 Projected benefit obligations $ 3,254 $ 3,225 $ 65 $ 64 Fair value of plan assets 3,485 3,346 28 25 Funded / (underfunded) status $ 231 $ 121 $ (37) $ (39) Contributions and Estimated Future Benefit Payments Our pension obligations can be met over time through a combination of company contributions to these plans and earnings on plan assets. In 2025 and 2024, we made no contributions to our qualified defined benefit pension plan. We are not required to make any contributions to our qualified defined benefit pension plan in 2026. However, depending on investment performance and plan funded status, we may elect to make a contribution. Estimated Future Benefit Payments (millions) Pension Benefits 2026 $ 213 2027 227 2028 241 2029 244 2030 249 2031 - 2035 1,328 Cost of Plans Net Pension Benefits (Income) / …

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Business Transformation Costs In May 2025, we announced a multi-year initiative to transform various aspects of our businessincluding our organizational structure, processes, and technologyto 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. …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

"Net Sales 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 (millions) 2025 2024 2023 Apparel & accessories (a) $ 15,737 $ 16,505 $ 16,485 Beauty (b) 13,214 13,173 12,538 Food & beverage (c) 24,136 23,828 23,899 Hardlines (d) 15,800 15,784 16,162 Home furnishings & decor (e) 15,608 16,699 17,760 Household essentials (f) 18,017 18,614 18,746 Other merchandise sales 205 217 213 Merchandise sales 102,717 104,820 105,803 Advertising revenue 915 649 522 Credit card profit sharing 522 576 667 Other 626 521 420 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. (b) Includes skin and bath care, cosmetics, hair care, oral care, deodorant, and shaving products. (c) Includes dry and perishable grocery, including snacks, candy, beverages, deli, bakery, meat, produce, and food service (primarily Starbucks) in our stores. (d) Includes electronics, including video games and consoles, toys, sporting goods, entertainment, and luggage. (e) Includes bed and bath, home decor, school/office supplies, storage, small appliances, kitchenware, greeting cards, party supplies, furniture, lighting, home improvement, and seasonal merchandise. (f) Includes household cleaning, paper products, over-the-counter healthcare, vitamins and su …

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Segment Reporting Our Chief Operating Decision Maker (CODM)our Chief Executive Officermonitors 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. 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 (millions) 2025 2024 2023 Net sales $ 104,780 $ 106,566 $ 107,412 Cost of sales Merchandising cost of sales (a) 67,980 68,884 70,652 Supply chain and digital fulfillment costs (a) 7,531 7,618 7,176 Total cost of sales 75,511 76,502 77,828 SG&A expenses (b) 21,535 21,969 21,462 Depreciation and amortization (exclusive of depreciation included in cost of sales) 2,617 2,529 2,415 Operating income 5,117 5,566 5,707 Net interest expense 445 411 502 Net other income (95) (106) (92) Earnings before income taxes 4,767 5,261 5,297 Provision for income taxes 1,062 1,170 1,159 Net earnings $ 3,705 $ 4,091 $ 4,138 (a) Note 3 provides a description of Mercha …

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Subsequent EventOn 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.

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"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 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, during the first quarter of 2025, we recorded gains within SG&A Expenses of $593 million, net of legal fees."

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Long-Term Debt and Commercial Paper Our unsecured long-term debt repayments during the six months ended August 1, 2026, were as follows: Debt Repayments (dollars in millions) Repayment Date Maturity Date Principal Amount Interest Rate (Fixed) 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 and six months ended August 1, 2026, or August 2, 2025.

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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 Beauty (b) 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 & decor (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 Merchandise sales 25,947 24,719 50,841 48,124 Advertising revenue 279 217 525 379 Credit card profit sharing 139 134 269 275 Other 174 141 347 279 Net sales $ 26,539 $ 25,211 $ 51,982 $ 49,057 (a) Includes apparel for women, men, young adults, kids, toddlers, and babies, as well as jewelry, accessories, and shoes. (b) Includes skin and bath care, cosmetics, hair care, oral care, deodorant, and shaving products. (c) Includes dry and perishable grocery, including snacks, candy, beverages, deli, bakery, meat, produce , food service (primarily Starbucks), and floral in our stores. (d) Includes electronics, including video games and consoles, toys, trading cards, sporting goods and fan merchandise, pop culture and other entertainment, and luggage. (e) Includes bed and bath, home decor, school/office supplies, storage, small appliances, kitchenware, greeting cards, party supplies, furniture, lighting, home improvement, and seasonal merchandise. (f) Includes household cleaning, paper products, over-the-counter healthcare, vitamins and s …

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Fair Value Measurements Fair value measurements are reported in one of three levels reflecting the significant inputs used to determine fair value. Financial Instruments Measured On a Recurring Basis Fair Value (millions) Classification Measurement Level August 1, 2026 January 31, 2026 August 2, 2025 Assets 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 Liabilities Interest rate swaps Other Current Liabilities Level 2 1 3 Interest rate swaps Other Noncurrent Liabilities Level 2 106 54 60 Significant Financial Instruments Not Measured at Fair Value (a) (millions) August 1, 2026 January 31, 2026 August 2, 2025 Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt, including current portion (b) $ 13,404 $ 12,355 $ 14,398 $ 13,732 $ 14,393 $ 13,643 (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 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. …

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Pension Benefits We provide pension plan benefits to eligible team members. 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 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) …

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Net Sales 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 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 Beauty (b) 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 & decor (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 Merchandise sales 25,947 24,719 50,841 48,124 Advertising revenue 279 217 525 379 Credit card profit sharing 139 134 269 275 Other 174 141 347 279 Net sales $ 26,539 $ 25,211 $ 51,982 $ 49,057 (a) Includes apparel for women, men, young adults, kids, toddlers, and babies, as well as jewelry, accessories, and shoes. (b) Includes skin and bath care, cosmetics, hair care, oral care, deodorant, and shaving products. (c) Includes dry and perishable grocery, including snacks, candy, beverages, deli, bakery, meat, produce , food service (primarily Starbucks), and floral in our stores. (d) Includes electronics, including video games and consoles, toys, trading cards, sporting goods and fan merchandise, pop culture and other entertainment, and luggage. (e) Includes bed and bath, home decor, school/office supplies, storage, small appliances, ki …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Segment Reporting Our Chief Operating Decision Maker (CODM)our Chief Executive Officermonitors 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. Virtually all of our consolidated revenues are generated in the United States. 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 (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 (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) 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 expense / (income) 3 (17) (13) (43) Earnin …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Accounting Policies These unaudited condensed consolidated financial statements are prepared in accordance with the rules and regulations of the Securities and Exchange Commission applicable to interim financial statements. While these statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by United States (U.S.) generally accepted accounting principles (GAAP) for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the financial statement disclosures in our most recent Form 10-K. We use the same accounting policies in preparing quarterly and annual financial statements. 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. Nearly all of our revenues are generated in 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.

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