Target 2015 Annual Report

Welcome to our 2015 Annual Report

Explore the key stories of the past year
and find out what’s in store for the year ahead.

A Growth Story Again

image of Brian Cornell

In 2015, Target drove profitable growth throughout the year with a strategic framework that we are confident will keep our company growing for years to come.

Central to our strategy – really, to everything we do – is a clear understanding of what our guests expect. Listening to our guests and investing the time and resources to get to know them better has already helped us achieve:

  • • Positive traffic growth in each quarter of 2015, building on traffic momentum from the end of 2014.

  • • Sales results on the high end of our comparable store sales guidance for the year, driven primarily by our signature businesses, which grew about three times faster than our overall comp.

  • • Digital sales growth of more than 30 percent, which continued to set the pace for U.S. retail.

  • • Full-year adjusted earnings per share of $4.69*, above our initial guidance of $4.45 to $4.65, and 11 percent higher than in 2014.

Our team drove these results while also undertaking several key strategic shifts. Some were challenging, like discontinuing our Canadian operations and restructuring our U.S. headquarters. Some were groundbreaking, like announcing our $1.9-billion transaction with CVS Health. This partnership will deliver ongoing value by growing traffic in our store pharmacies. Importantly, the transaction also provided more than $1 billion of net cash to support our capital deployment priorities, including the return of nearly $5 billion to shareholders through dividends and share repurchase, well above the goal we set at the beginning of 2015.

Above all, our team rallied around a set of key enterprise priorities focused on the things that matter most to our guests. In the course of the year, I visited with hundreds of guests in our stores and in their homes. They shared with me the reasons they love Target, and the times we’ve let them down. Those conversations, and the firsthand input our team receives from our guests across all touchpoints, have defined our priorities for the year.

  • Signature businesses

    The categories for which our guests turn to Target and in which they expect us to lead – namely Style, Baby, Kids and Wellness. We’ll continue to invest in innovation and inspiration, knowing that signature businesses play a unique role in our results, driving the strongest growth in our portfolio. This year, we will continue to focus on category roles, redefine and improve our food position and further innovate in our merchandising, for an experience that best suits our guests.

  • Target.com & mobile

    What’s clear from talking to our guests is that the easier we make it to shop across all of Target – physical and digital – the happier they are. We’re focused on offering a rich digital experience that deepens engagement in stores and online, and we’ll continue to invest in digital capabilities that enable our guests to seamlessly experience Target.

  • Local relevance and flexible formats

    We’ve seen positive initial results in creating locally relevant experiences in focus markets like Chicago. And, with flexible-format stores making up the bulk of our new-store openings, we’ll learn even more, as each store and its assortment is custom-designed for the neighborhood it serves.

  • Target rewards

    we know our guests love a great deal, and current offerings like Cartwheel and REDcard Rewards offer fantastic opportunities to save. This year, we’re focused on integrating our loyalty vehicles as we continue to develop a broader rewards portfolio for our guests – getting to know their attitudes, preferences and behaviors more deeply, so we can deliver more personalized promotions and experiences.

  • Retail Foundations

    Getting the basics right is essential. When we fall short on the basics, guests have a hard time getting excited about any innovations we might envision. So, beneath all our efforts is a relentless focus on getting the fundamentals right: modernizing our supply chain, enhancing our technology, taking complexity out of our systems, elevating the use of data and driving productivity across the entire business.

The progress Target made as a team and a brand in 2015 is real, and it’s sustainable. Yet, this is a team that takes nothing for granted and is working every day to deliver the best experience for our guests. We know that getting it right for them drives growth for us and strong returns for our shareholders, and we’re committed to this formula for value creation as we move confidently into the future.

Brian Cornell's signature

Brian Cornell

Chairman and CEO

*A reconciliation of adjusted EPS from continuing operations to GAAP EPS from continuation operations is provided on page 23 of our Form 10-K.

Financial Highlights

2015 financials

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