2020 Annual Report Target Corporation

• Growing our sales by more than $15 billion, which was greater than our growth in the prior 11 years.
• Gaining market share across our five core merchandising categories, totaling approximately $9 billion.
• Growing comparable sales more than 19%, with a store comp topping 7% and an industry-leading digital comp of 145%.
• Increasing digital-sales penetration to nearly 18% without diminishing our overall profitability.
• And achieving record-high adjusted earnings per share of $9.42.

While our 2020 performance was one for the record books, what carries us forward is our team’s unwavering impulse to take care of each other, our guests and communities.

That’s what drove us in recent years to turn Target into America’s easiest place to shop. And it quickly became clear in the pandemic that our investments and innovations translated seamlessly to guest safety. After years of focus and capability-building, our team has created a retail platform that stands out in the American marketplace, with an unmatched integration of physical and digital shopping, technology and team spirit.

Today, Target is known as much for same-day fulfillment services and safety as we are for style and swagger. In fact, our same-day services, Order Pickup, Drive Up and Shipt, grew 235% in 2020, led by more than 600% growth in Drive Up—as our guests developed new routines and connections to Target that will endure long after the pandemic.

Service starts with our team

Our team has always been at the heart of our investments. In 2017, we said we would invest heavily in wages, training and hours, and we took the bold step of promising a minimum starting wage of $15 per hour by the end of 2020. We accelerated that $15 commitment to the middle of last year, as we continued to hire, develop and promote team members in support of our rapidly growing business.

As the hardships of COVID-19 unfolded, we quickly added well over $1 billion in incremental investment to support the well-being of our team and the safety of our guests.

What isn’t represented by the dollars—really, what’s incalculable—is the spirit of support our team members showed for each other. How they rallied around coworkers whose stores were damaged or temporarily closed after demonstrations for racial equity, or whose friends and extended families had been hard-hit by economic turmoil.

And we will absolutely keep investing in our team. Most immediately, with COVID-19 vaccines becoming more widely available, we’ll ensure that our team has easy access to vaccination at no cost to them, with paid time off and transportation if needed.

Working for racial equity

In our hometown of Minneapolis, the ongoing Derek Chauvin murder trial is a stark reminder that, while 2020 had its share of difficult weeks, the toughest was the week of May 25.

Ours is a team that aspires to help all families. We back up that aspiration with disciplined planning and execution, including a focused diversity-and-inclusion strategy that dates back a decade and a half. Yet what happened in our hometown—and in Louisville, KY, in Brunswick, GA, in the racial disparities from COVID-19 and the racist sentiments directed at Asian colleagues and neighbors—touched off a global outcry for unity and equity.

As a company that holds inclusivity as a core value, we stepped up with immediate actions and long-term solutions, which have been detailed in this and other reports. On behalf of our entire team, I can promise you that we will stay engaged in this work as a lasting expression of our purpose—both through our enterprise and diversity-and-inclusion strategies, and through our Racial Equity Action and Change Committee, which was created specifically to advance racial equity for Black team members and guests across all areas of Target’s business.

Building a brighter future

As we move deeper into 2021, we’re playing offense and investing in continued profitable growth as we build on a business model that is better than ever for our stakeholders. In 2021, we’ll also advance an approach to sustainability that draws on our legacy of corporate responsibility, diversity and inclusion, and community engagement. As part of our efforts, we’ll focus on how we can offer more sustainable brands, further eliminate waste and help foster more equitable communities.

I couldn’t be more confident in Target’s future or more grateful for our team’s determination to put our size and scale, purpose and values to work for all families. I’m personally committed to doing just that as we continue to build toward brighter days for everyone.

Sincerely,