Target Corporation Reports Fourth Quarter and Full-Year 2020 Earnings
Target Corporation reported a robust Q4 2020 with a 20.5% increase in comparable sales, driven by a 118% surge in digital sales and 212% growth in same-day services. The GAAP EPS reached $2.73, up from $1.63 in 2019, while full-year sales grew by $15 billion, representing a historical achievement. Target gained approximately $9 billion in market share in 2020. Despite uncertainties, no guidance for FY2021 was provided. Operating income surged 53.2% to $1.8 billion with improved margins, although supply chain costs pressured profits.
- GAAP EPS rose to $2.73 for Q4 2020, a significant increase from $1.63 in 2019.
- Digital sales skyrocketed by 118%, contributing significantly to overall growth.
- Target gained approximately $9 billion in market share over the year.
- Full-year sales increased 19.8% to $92.4 billion.
- No sales and EPS guidance provided for FY2021 due to uncertain outlook.
- Increased supply chain and fulfillment costs negatively impacted margins.
MINNEAPOLIS, March 2, 2021 /PRNewswire/ --
Q4 2020 Highlights
- Comparable sales grew 20.5 percent, reflecting comparable traffic growth of 6.5 percent and a 13.1 percent increase in average ticket.
- Store comparable sales increased 6.9 percent. Digital comparable sales grew 118 percent, accounting for two-thirds of the Company's overall comp growth.
- Same-day services (Order Pick Up, Drive Up and Shipt) grew 212 percent, led by more than 500 percent growth in Drive Up.
- More than 95 percent of Target's fourth quarter sales were fulfilled by its stores.
- EPS established an all-time high with GAAP EPS of
$2.73 and Adjusted EPS of$2.67 . - The Company continued to gain market share across all five of its core merchandising categories.
Full-Year 2020 Highlights
- Target's 2020 sales growth of more than
$15 billion was greater than the Company's total sales growth over the prior 11 years. - Comparable sales grew 19.3 percent, reflecting 7.2 percent growth in store comparable sales, and 145 percent growth in digital comparable sales.
- Target's digital sales grew by nearly
$10 billion in 2020, driven by235% growth in the Company's same-day services. - GAAP EPS from continuing operations of
$8.64 was 36.3 percent higher than last year, while Adjusted EPS of$9.42 grew 47.4 percent compared with last year. - The Company gained approximately
$9 billion in market share.
For additional media materials, please visit:
https://corporate.target.com/article/2021/03/q4-fy2020
1Adjusted EPS, a non-GAAP financial measure, excludes the impact of certain discretely managed items. See the tables of this release for additional information about the items that have been excluded from Adjusted EPS. |
Target Corporation (NYSE: TGT) today announced its fourth-quarter and full-year 2020 results. The company reported GAAP earnings per share (EPS) from continuing operations of
"Following years of investment to build a durable, scalable and sustainable business model, we saw record growth in 2020, as our guests turned to Target to safely provide for their families throughout the pandemic," said Brian Cornell, chairman and chief executive officer of Target Corporation. "With the strength of our unique, multi-category assortment and the flexibility we offer through our reliable and convenient fulfillment options, we gained nearly
Fiscal 2021 Guidance
In the first quarter of 2020, the Company withdrew its guidance, in light of the highly fluid and uncertain outlook for consumer shopping patterns and the impact of COVID-19. In the face of continued uncertainty, the company is not providing sales and EPS guidance for Fiscal 2021 and beyond.
Operating Results
The Company's total comparable sales grew 20.5 percent in the fourth quarter, reflecting comparable stores sales growth of 6.9 percent and digital sales growth of 118 percent. Total revenue of
Fourth quarter operating income margin rate was 6.5 percent in 2020 compared with 5.1 percent in 2019. Fourth quarter gross margin rate was 26.8 percent, compared with 26.3 percent in 2019, reflecting the benefit of merchandising actions, most notably the unusually low markdown rates, partially offset by the impact of higher digital fulfillment and supply chain costs, along with the impact of category mix. Fourth quarter SG&A expense rate was 19.2 percent in 2020, in line with 19.3 percent in 2019, as investments in safety and team member pay and benefits were offset by leverage resulting from strong revenue growth.
Full-year sales increased 19.8 percent to
Full-year operating income was
Interest Expense and Taxes
The Company's fourth quarter 2020 net interest expense was
Full-year 2020 net interest expense was
Fourth quarter 2020 effective income tax rate was 20.2 percent, a decrease from 20.7 percent last year. The Company's full-year 2020 effective income tax rate from continuing operations was 21.2 percent compared with 22.0 percent in 2019, which reflects a larger rate benefit from discrete items, primarily related to share-based payments and resolution of certain income tax matters, partially offset by the rate impact of higher earnings, compared with the prior year.
Capital Deployment and Return on Invested Capital
The Company paid dividends of
Target did not repurchase any of its shares in the fourth quarter. The Company has resumed share repurchases in fiscal 2021, consistent with its long-standing capital deployment policies and within the limits of its strong, middle-A credit ratings. As of the end of the fourth quarter, the Company had approximately
For the trailing twelve months through fourth quarter 2020, after-tax return on invested capital (ROIC) was 23.5 percent, compared with 16.0 percent for the twelve months through fourth quarter 2019. This increase was driven primarily by higher profitability combined with a decrease in the base of invested capital. The tables in this release provide additional information about the Company's ROIC calculation.
Webcast Details
Target will webcast its financial community meeting, including a Q&A session, beginning at 8:00 a.m. CST today. Investors and the media are invited to listen to the meeting at Investors.Target.com (hover over "investors" then click on "events & presentations"). A replay of the webcast will be available within four hours of the meeting's conclusion.
Miscellaneous
Statements in this release regarding the Company's future financial performance 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 actions 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 Feb. 1, 2020 and Item 1A of the Company's Form 10-Q for the fiscal quarter ended May 2, 2020. 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 1,900 stores and at Target.com. Since 1946, Target has given
For more on the Target Foundation, click here.
TARGET CORPORATION | ||||||||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||
(millions, except per share data) (unaudited) | January 30, 2021 | February 1, 2020 | Change | January 30, 2021 | February 1, 2020 | Change | ||||||||||||||||
Sales | $ | 27,997 | $ | 23,133 | 21.0 | % | $ | 92,400 | $ | 77,130 | 19.8 | % | ||||||||||
Other revenue | 342 | 265 | 28.7 | 1,161 | 982 | 18.2 | ||||||||||||||||
Total revenue | 28,339 | 23,398 | 21.1 | 93,561 | 78,112 | 19.8 | ||||||||||||||||
Cost of sales | 20,485 | 17,056 | 20.1 | 66,177 | 54,864 | 20.6 | ||||||||||||||||
Selling, general and administrative expenses | 5,448 | 4,504 | 20.9 | 18,615 | 16,233 | 14.7 | ||||||||||||||||
Depreciation and amortization (exclusive of depreciation included in cost of sales) | 570 | 640 | (10.8) | 2,230 | 2,357 | (5.4) | ||||||||||||||||
Operating income | 1,836 | 1,198 | 53.2 | 6,539 | 4,658 | 40.4 | ||||||||||||||||
Net interest expense | 106 | 118 | (9.3) | 977 | 477 | 105.1 | ||||||||||||||||
Net other (income) / expense | — | 29 | (106.3) | 16 | (9) | (285.9) | ||||||||||||||||
Earnings from continuing operations before income taxes | 1,730 | 1,051 | 64.7 | 5,546 | 4,190 | 32.4 | ||||||||||||||||
Provision for income taxes | 350 | 218 | 60.6 | 1,178 | 921 | 27.9 | ||||||||||||||||
Net earnings from continuing operations | 1,380 | 833 | 65.8 | 4,368 | 3,269 | 33.6 | ||||||||||||||||
Discontinued operations, net of tax | — | 1 | — | 12 | ||||||||||||||||||
Net earnings | $ | 1,380 | $ | 834 | 65.6 | % | $ | 4,368 | $ | 3,281 | 33.1 | % | ||||||||||
Basic earnings per share | ||||||||||||||||||||||
Continuing operations | $ | 2.76 | $ | 1.64 | 67.7 | % | $ | 8.72 | $ | 6.39 | 36.4 | % | ||||||||||
Discontinued operations | — | — | — | 0.02 | ||||||||||||||||||
Net earnings per share | $ | 2.76 | $ | 1.65 | 67.4 | % | $ | 8.72 | $ | 6.42 | 35.8 | % | ||||||||||
Diluted earnings per share | ||||||||||||||||||||||
Continuing operations | $ | 2.73 | $ | 1.63 | 67.7 | % | $ | 8.64 | $ | 6.34 | 36.3 | % | ||||||||||
Discontinued operations | — | — | — | 0.02 | ||||||||||||||||||
Net earnings per share | $ | 2.73 | $ | 1.63 | 67.5 | % | $ | 8.64 | $ | 6.36 | 35.8 | % | ||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||
Basic | 500.8 | 506.2 | (1.1) | % | 500.6 | 510.9 | (2.0) | % | ||||||||||||||
Diluted | 506.0 | 511.9 | (1.2) | % | 505.4 | 515.6 | (2.0) | % | ||||||||||||||
Antidilutive shares | — | — | — | — | ||||||||||||||||||
Dividends declared per share | $ | 0.68 | $ | 0.66 | 3.0 | % | $ | 2.70 | $ | 2.62 | 3.1 | % |
Note: Per share amounts may not foot due to rounding. |
TARGET CORPORATION | ||||||||
Consolidated Statements of Financial Position | ||||||||
(millions, except footnotes) (unaudited) | January 30, 2021 | February 1, 2020 | ||||||
Assets | ||||||||
Cash and cash equivalents | $ | 8,511 | $ | 2,577 | ||||
Inventory | 10,653 | 8,992 | ||||||
Other current assets | 1,592 | 1,333 | ||||||
Total current assets | 20,756 | 12,902 | ||||||
Property and equipment | ||||||||
Land | 6,141 | 6,036 | ||||||
Buildings and improvements | 31,557 | 30,603 | ||||||
Fixtures and equipment | 5,914 | 6,083 | ||||||
Computer hardware and software | 2,765 | 2,692 | ||||||
Construction-in-progress | 780 | 533 | ||||||
Accumulated depreciation | (20,278) | (19,664) | ||||||
Property and equipment, net | 26,879 | 26,283 | ||||||
Operating lease assets | 2,227 | 2,236 | ||||||
Other noncurrent assets | 1,386 | 1,358 | ||||||
Total assets | $ | 51,248 | $ | 42,779 | ||||
Liabilities and shareholders' investment | ||||||||
Accounts payable | $ | 12,859 | $ | 9,920 | ||||
Accrued and other current liabilities | 6,122 | 4,406 | ||||||
Current portion of long-term debt and other borrowings | 1,144 | 161 | ||||||
Total current liabilities | 20,125 | 14,487 | ||||||
Long-term debt and other borrowings | 11,536 | 11,338 | ||||||
Noncurrent operating lease liabilities | 2,218 | 2,275 | ||||||
Deferred income taxes | 990 | 1,122 | ||||||
Other noncurrent liabilities | 1,939 | 1,724 | ||||||
Total noncurrent liabilities | 16,683 | 16,459 | ||||||
Shareholders' investment | ||||||||
Common stock | 42 | 42 | ||||||
Additional paid-in capital | 6,329 | 6,226 | ||||||
Retained earnings | 8,825 | 6,433 | ||||||
Accumulated other comprehensive loss | (756) | (868) | ||||||
Total shareholders' investment | 14,440 | 11,833 | ||||||
Total liabilities and shareholders' investment | $ | 51,248 | $ | 42,779 |
Common Stock Authorized 6,000,000,000 shares,
Preferred Stock Authorized 5,000,000 shares,
TARGET CORPORATION | ||||||||
Consolidated Statements of Cash Flows | ||||||||
Twelve Months Ended | ||||||||
(millions) (unaudited) | January 30, 2021 | February 1, 2020 | ||||||
Operating activities | ||||||||
Net earnings | $ | 4,368 | $ | 3,281 | ||||
Earnings from discontinued operations, net of tax | — | 12 | ||||||
Net earnings from continuing operations | 4,368 | 3,269 | ||||||
Adjustments to reconcile net earnings to cash provided by operations: | ||||||||
Depreciation and amortization | 2,485 | 2,604 | ||||||
Share-based compensation expense | 200 | 147 | ||||||
Deferred income taxes | (184) | 178 | ||||||
Loss on debt extinguishment | 512 | 10 | ||||||
Noncash losses / (gains) and other, net | 86 | 29 | ||||||
Changes in operating accounts: | ||||||||
Inventory | (1,661) | 505 | ||||||
Other assets | (137) | 18 | ||||||
Accounts payable | 2,925 | 140 | ||||||
Accrued and other liabilities | 1,931 | 199 | ||||||
Cash provided by operating activities—continuing operations | 10,525 | 7,099 | ||||||
Cash provided by operating activities—discontinued operations | — | 18 | ||||||
Cash provided by operations | 10,525 | 7,117 | ||||||
Investing activities | ||||||||
Expenditures for property and equipment | (2,649) | (3,027) | ||||||
Proceeds from disposal of property and equipment | 42 | 63 | ||||||
Other investments | 16 | 20 | ||||||
Cash required for investing activities | (2,591) | (2,944) | ||||||
Financing activities | ||||||||
Additions to long-term debt | 2,480 | 1,739 | ||||||
Reductions of long-term debt | (2,415) | (2,069) | ||||||
Dividends paid | (1,343) | (1,330) | ||||||
Repurchase of stock | (745) | (1,565) | ||||||
Stock option exercises | 23 | 73 | ||||||
Cash required for financing activities | (2,000) | (3,152) | ||||||
Net increase in cash and cash equivalents | 5,934 | 1,021 | ||||||
Cash and cash equivalents at beginning of period | 2,577 | 1,556 | ||||||
Cash and cash equivalents at end of period | $ | 8,511 | $ | 2,577 |
TARGET CORPORATION | ||||||||||||
Operating Results | ||||||||||||
Rate Analysis | Three Months Ended | Twelve Months Ended | ||||||||||
(unaudited) | January 30, 2021 | February 1, 2020 | January 30, 2021 | February 1, 2020 | ||||||||
Gross margin rate | 26.8 | % | 26.3 | % | 28.4 | % | 28.9 | % | ||||
SG&A expense rate | 19.2 | 19.3 | 19.9 | 20.8 | ||||||||
Depreciation and amortization (exclusive of depreciation included in cost of sales) expense rate | 2.0 | 2.7 | 2.4 | 3.0 | ||||||||
Operating income margin rate | 6.5 | 5.1 | 7.0 | 6.0 | ||||||||
Note: Gross margin rate is calculated as gross margin (sales less cost of sales) divided by sales. All other rates are calculated by dividing the applicable amount by total revenue. Other revenue includes | ||||||||||||
Comparable Sales | Three Months Ended | Twelve Months Ended | ||||||||||
(unaudited) | January 30, 2021 | February 1, 2020 | January 30, 2021 | February 1, 2020 | ||||||||
Comparable sales change | 20.5 | % | 1.5 | % | 19.3 | % | 3.4 | % | ||||
Drivers of change in comparable sales: | ||||||||||||
Number of transactions | 6.5 | 1.3 | 3.7 | 2.7 | ||||||||
Average transaction amount | 13.1 | 0.2 | 15.0 | 0.7 | ||||||||
Contribution to Comparable Sales Change | Three Months Ended | Twelve Months Ended | ||||||||||
(unaudited) | January 30, 2021 | February 1, 2020 | January 30, 2021 | February 1, 2020 | ||||||||
Stores originated channel comparable sales change | 6.9 | % | (0.7) | % | 7.2 | % | 1.4 | % | ||||
Contribution from digitally originated sales to comparable sales | 13.6 | 2.2 | 12.1 | 1.9 | ||||||||
Total comparable sales change | 20.5 | % | 1.5 | % | 19.3 | % | 3.4 | % | ||||
Note: Amounts may not foot due to rounding. | ||||||||||||
Sales by Channel | Three Months Ended | Twelve Months Ended | ||||||||||
(unaudited) | January 30, 2021 | February 1, 2020 | January 30, 2021 | February 1, 2020 | ||||||||
Stores originated | 77.9 | % | 87.7 | % | 82.1 | % | 91.2 | % | ||||
Digitally originated | 22.1 | 12.3 | 17.9 | 8.8 | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||
RedCard Penetration | Three Months Ended | Twelve Months Ended | ||||||||||
(unaudited) | January 30, 2021 | February 1, 2020 | January 30, 2021 | February 1, 2020 | ||||||||
Target Debit Card | 12.4 | % | 12.4 | % | 12.3 | % | 12.6 | % | ||||
Target Credit Cards | 9.3 | 10.9 | 9.2 | 10.7 | ||||||||
Total RedCard Penetration | 21.7 | % | 23.3 | % | 21.5 | % | 23.3 | % | ||||
Note: Amounts may not foot due to rounding. | ||||||||||||
Number of Stores and Retail Square Feet | Number of Stores | Retail Square Feet (a) | ||||||||||
(unaudited) | January 30, 2021 | February 1, 2020 | January 30, 2021 | February 1, 2020 | ||||||||
170,000 or more sq. ft. | 273 | 272 | 48,798 | 48,619 | ||||||||
50,000 to 169,999 sq. ft. | 1,509 | 1,505 | 189,508 | 189,227 | ||||||||
49,999 or less sq. ft. | 115 | 91 | 3,342 | 2,670 | ||||||||
Total | 1,897 | 1,868 | 241,648 | 240,516 |
(a) | In thousands, reflects total square feet less office, distribution center, and vacant space. |
TARGET CORPORATION
Reconciliation of Non-GAAP Financial Measures
To provide additional transparency, we have disclosed non-GAAP adjusted diluted earnings per share from continuing operations (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 continuing operations. This measure is not in accordance with, or an alternative to, generally accepted accounting principles in the United States (GAAP). The most comparable GAAP measure is diluted earnings per share from continuing operations. 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 Adjusted EPS | Three Months Ended | ||||||||||||||||||||||||||
January 30, 2021 | February 1, 2020 | ||||||||||||||||||||||||||
(millions, except per share data) (unaudited) | Pretax | Net of Tax | Per Share | Pretax | Net of Tax | Per Share | Change | ||||||||||||||||||||
GAAP diluted earnings per share from continuing operations | $ | 2.73 | $ | 1.63 | 67.7 | % | |||||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||
Loss on debt extinguishment | $ | — | $ | — | $ | — | $ | 10 | $ | 8 | $ | 0.02 | |||||||||||||||
(Gain) / loss on investment (a) | — | (3) | (0.01) | 41 | 31 | 0.06 | |||||||||||||||||||||
Other (b) | (5) | (4) | (0.01) | (9) | (6) | (0.01) | |||||||||||||||||||||
Other income tax matters (c) | — | (21) | (0.04) | — | — | — | |||||||||||||||||||||
Adjusted diluted earnings per share from continuing operations | $ | 2.67 | $ | 1.69 | 58.2 | % | |||||||||||||||||||||
Reconciliation of Non-GAAP Adjusted EPS | Twelve Months Ended | ||||||||||||||||||||||||||
January 30, 2021 | February 1, 2020 | ||||||||||||||||||||||||||
(millions, except per share data) (unaudited) | Pretax | Net of Tax | Per Share | Pretax | Net of Tax | Per Share | Change | ||||||||||||||||||||
GAAP diluted earnings per share from continuing operations | $ | 8.64 | $ | 6.34 | 36.3 | % | |||||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||
Loss on debt extinguishment | $ | 512 | $ | 379 | $ | 0.75 | $ | 10 | $ | 8 | $ | 0.01 | |||||||||||||||
Loss on investment (a) | 19 | 14 | 0.03 | 41 | 31 | 0.06 | |||||||||||||||||||||
Other (b) | 28 | 20 | 0.04 | (17) | (13) | (0.02) | |||||||||||||||||||||
Other income tax matters (c) | — | (21) | (0.04) | — | — | — | |||||||||||||||||||||
Adjusted diluted earnings per share from continuing operations | $ | 9.42 | $ | 6.39 | 47.4 | % |
Note: Amounts may not foot due to rounding. | |
(a) | Represents a (gain) / loss on our investment in Casper Sleep Inc., which is not core to our continuing operations. |
(b) | For 2020, represents store damage and inventory losses related to civil unrest, net of insurance recoveries. For 2019, represents insurance recoveries related to the 2013 data breach. |
(c) | Represents benefits from the resolution of certain income tax matters unrelated to current period operations. |
Earnings from continuing operations before interest expense and income taxes (EBIT) and earnings from continuing operations 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 for, GAAP. The most comparable GAAP measure is net earnings from continuing operations. 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 | Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
(dollars in millions) (unaudited) | January 30, 2021 | February 1, 2020 | Change | January 30, 2021 | February 1, 2020 | Change | ||||||||||||||||
Net earnings from continuing operations | $ | 1,380 | $ | 833 | 65.8 | % | $ | 4,368 | $ | 3,269 | 33.6 | % | ||||||||||
+ Provision for income taxes | 350 | 218 | 60.6 | 1,178 | 921 | 27.9 | ||||||||||||||||
+ Net interest expense | 106 | 118 | (9.3) | 977 | 477 | 105.1 | ||||||||||||||||
EBIT | $ | 1,836 | $ | 1,169 | 57.3 | % | $ | 6,523 | $ | 4,667 | 39.8 | % | ||||||||||
+ Total depreciation and amortization (a) | 637 | 699 | (9.2) | 2,485 | 2,604 | (4.6) | ||||||||||||||||
EBITDA | $ | 2,473 | $ | 1,868 | 32.4 | % | $ | 9,008 | $ | 7,271 | 23.9 | % |
(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) | ||||||||||||
Trailing Twelve Months | ||||||||||||
Numerator | January 30, 2021 | February 1, 2020 | ||||||||||
Operating income | $ | 6,539 | $ | 4,658 | ||||||||
+ Net other income / (expense) | (16) | 9 | ||||||||||
EBIT | 6,523 | 4,667 | ||||||||||
+ Operating lease interest (a) | 87 | 86 | ||||||||||
- Income taxes (b) | 1,404 | 1,045 | ||||||||||
Net operating profit after taxes | $ | 5,206 | $ | 3,708 | ||||||||
Denominator | January 30, 2021 | February 1, 2020 | February 2, 2019 | |||||||||
Current portion of long-term debt and other borrowings | $ | 1,144 | $ | 161 | $ | 1,052 | ||||||
+ Noncurrent portion of long-term debt | 11,536 | 11,338 | 10,223 | |||||||||
+ Shareholders' investment | 14,440 | 11,833 | 11,297 | |||||||||
+ Operating lease liabilities (c) | 2,429 | 2,475 | 2,170 | |||||||||
- Cash and cash equivalents | 8,511 | 2,577 | 1,556 | |||||||||
Invested capital | $ | 21,038 | $ | 23,230 | $ | 23,186 | ||||||
Average invested capital (d) | $ | 22,134 | $ | 23,208 | ||||||||
After-tax return on invested capital | 23.5 | % | 16.0 | % |
(a) | Represents the add-back to operating income driven by the hypothetical interest expense we would incur if the property under our operating leases were owned or accounted for as finance leases. Calculated using the discount rate for each lease and recorded as a component of rent expense within SG&A. 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. |
(b) | Calculated using the effective tax rates for continuing operations, which were 21.2 percent and 22.0 percent for the trailing twelve months ended January 30, 2021, and February 1, 2020, respectively. For the twelve months ended January 30, 2021, and February 1, 2020, includes tax effect of |
(c) | Total short-term and long-term operating lease liabilities included within Accrued and Other Current Liabilities and Noncurrent Operating Lease Liabilities. |
(d) | 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. |
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SOURCE Target Corporation
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