Press Release

Target Reports First Quarter 2018 Earnings and Affirms Full-Year Guidance

  • May 23, 2018


Traffic grows 3.7 percent, driving comparable sales growth of 3.0 percent; Earnings per Share increase more than 9 percent year-over-year

  • First quarter traffic growth of 3.7 percent is the strongest quarterly performance in over 10 years.
  • First quarter digital sales increased 28 percent, on top of 21 percent growth in first quarter 2017.
  • GAAP EPS from continuing operations were $1.33, up 9.1 percent from last year. Adjusted EPS1 were $1.32, up 9.4 percent from last year.
  • The Company saw broad market share gains across its core merchandise categories.
  • In the first quarter the Company completed 56 remodels, opened 7 new stores, introduced 3 new brands and a successful limited-time collaboration with Hunter, launched its new Drive-Up service in more than 250 stores, expanded Target Restock nationwide and rolled out same-day delivery from more than 700 stores, enabled by its recent acquisition of Shipt.
  • In the second quarter, Target expects an acceleration in its comparable sales into the low to mid single-digit range.
  • The midpoint of Target’s second quarter EPS guidance range is approximately 15 percent higher than second quarter 2017 GAAP EPS from continuing operations of $1.21 and Adjusted EPS of $1.22.
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Target Corporation (NYSE: TGT) today announced its first quarter 2018 financial performance2, including first quarter comparable sales growth of 3.0 percent and 3.7 

percent traffic growth.  The Company reported GAAP earnings per share (EPS) from continuing operations of $1.33 in first quarter 2018, up 9.1 percent from $1.21 in first quarter 2017.  First quarter Adjusted EPS were $1.32, up 9.4 percent from $1.20 in first quarter 2017. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS.

“We’re very pleased that our business continued to generate strong traffic and sales growth in the first quarter, as we made significant progress in support of our long-term strategic initiatives,” said Brian Cornell, chairman and chief executive officer of Target Corporation. “Our first quarter performance reflects the benefit of our unique multi-category portfolio. Strong sales growth in our home, essentials and food & beverage categories offset the impact of delayed sales in temperature-sensitive categories, which accelerated rapidly in recent weeks as weather improved across the country. Additionally, our team is delivering excellent execution and guest service every day, and momentum in our traffic has accelerated in the second quarter. As a result, we expect Target’s second quarter comparable sales growth will move into the low to mid single-digit range, and the midpoint of our second quarter EPS guidance represents approximately 15 percent growth over last year.”

Second Quarter and Full-Year 2018 Guidance
Target expects second quarter comparable sales growth to accelerate into the low to mid single-digit range. For the second quarter, the Company expects both GAAP EPS from continuing operations and Adjusted EPS of $1.30 to $1.50, compared with GAAP EPS from continuing operations of $1.21 and Adjusted EPS of $1.22 in first quarter 2017.

For full-year 2018, Target continues to expect a low-single digit increase in comparable sales, and both GAAP EPS from continuing operations and Adjusted EPS of $5.15 to $5.45.

Second quarter and full-year 2018 GAAP EPS from continuing operations may include the impact of certain discrete items which will be excluded in calculating Adjusted EPS.  The Company is not currently aware of any such discrete items, beyond those matters reported in first quarter 2018.

Operating Results
Total revenue of $16.8 billion increased 3.4 percent from $16.2 billion last year, reflecting sales growth of 3.5 percent combined with a slight decline in other revenue. First quarter sales growth reflected comparable sales growth of 3.0 percent combined with the contribution from non-mature stores.  Comparable digital channel sales grew 28 percent and contributed 1.1 percentage points of comparable sales growth.  Operating income was $1,041 million in first quarter 2018, down 9.9 percent from $1,155 million in 2017.

First quarter operating income margin rate was 6.2 percent, compared with 7.1 percent in 2017. First quarter gross margin rate was 29.8 percent, compared with 30.0 percent in 2017, reflecting pressure from digital fulfillments costs and sales mix, partially offset by the benefit of the Company’s cost saving efforts and the net impact of changes to the Company’s pricing and promotions. First quarter SG&A expense rate was 21.1 percent in 2018, compared with 20.7 percent in 2017, driven by higher compensation costs, including investments in store team member hours and wage rates.

Interest Expense and Taxes from Continuing Operations
The Company’s first quarter 2018 net interest expense was $121 million, down 13.4 percent from $140 million last year, reflecting debt retirement and refinancing activity conducted in 2017. First quarter 2018 effective income tax rate from continuing operations was 22.6 percent, compared with 34.5 percent last year, primarily due to the impact of recently-enacted federal tax reform legislation (the Tax Act).

Capital Deployment
In first quarter 2018 the Company made capital investments of $827 million in property and equipment, and returned $828 million to shareholders, including:

  • Dividends of $334 million, compared with $332 million in first quarter 2017, reflecting an increase in the dividend per share offset by a decline in share count.
  • Share repurchases totaling $494 million that retired 6.9 million shares of common stock at an average price of $71.24.

As of the end of the first quarter, the Company had approximately $2.8 billion of remaining capacity under its current $5 billion share repurchase program, reflecting first quarter purchases and an accelerated share repurchase transaction which will settle in the second quarter.

For the trailing twelve months through first quarter 2018, after-tax return on invested capital (ROIC) was 15.2 percent, compared with 13.8 percent for the twelve months through first quarter 2017. The year-over-year increase in first quarter 2018 reflected discrete impacts of the Tax Act combined with the benefit of a lower structural tax rate and lower working capital, partially offset by the impact of lower pretax earnings.  Excluding the discrete impacts of the Tax Act, ROIC was 13.5 percent for the trailing twelve months ended May 5, 2018.  See the tables of this release for additional information about the Company’s ROIC calculation.

Conference Call Details
Target will webcast its first quarter earnings conference call at 7:00 a.m. CDT today. Investors and the media are invited to listen to the call at (hover over “company” then click on “events & presentations” in the “investors” column). A telephone replay of the call will be available beginning at approximately 10:30 a.m. CDT today through the end of business on May 25, 2018. The replay number is 866-505-9259.

Statements in this release regarding second quarter and full-year 2018 earnings per share and comparable sales guidance 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 actual results 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. 3, 2018. 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.

1 Adjusted 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.
2 Beginning February 4, 2018, the Company adopted the new accounting standard for revenue recognition, leases and pensions. The financial information included in this earnings release reflects the adoption of these standards, with prior periods adjusted to conform with the current period presentation. Detail on the new accounting standards and adjusted prior period financials were provided in the Company’s Form 8-K filed on May 11, 2018.
About Target Corporation
Minneapolis-based Target Corporation (NYSE: TGT) serves guests at 1,829 stores and at Since 1946, Target has given 5 percent of its profit to communities, which today equals millions of dollars a week. For more information, visit For a behind-the-scenes look at Target, visit or follow @TargetNews on