Press Release

Target Reports Third Quarter Results

  • Nov 20, 2018


Comparable Traffic and Sales Both Up More Than 5 Percent Digital Sales Up 49 Percent Earnings per Share Up More Than 20 Percent

  • Comparable traffic growth of 5.3 percent and comparable sales growth of 5.1 percent were driven by healthy increases in both stores and digital channels.
  • Third quarter comparable digital channel sales grew 49 percent, contributing 1.9 percentage points to comparable sales.
  • The Company gained market share across all five of its core merchandising categories.
  • GAAP EPS from continuing operations were $1.16, up 33.6 percent from last year. Adjusted EPS1 were $1.09, up 20.2 percent from last year.
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Target Corporation (NYSE: TGT) today announced its third quarter 2018 financial performance, including comparable sales growth of 5.1 percent and comparable traffic growth of 5.3 percent.  The Company reported GAAP earnings per share (EPS) from continuing operations of $1.16 in third quarter 2018, up 33.6 percent from $0.87 in third quarter 2017.  Third quarter Adjusted EPS were $1.09, up 20.2 percent from $0.90 in third quarter 2017. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS.

“Our team delivered another outstanding quarter, driving comparable traffic and sales growth of more than 5 percent and earnings per share growth of more than 20 percent,” said Brian Cornell, chairman and chief executive officer of Target Corporation. “We’ve made significant investments in our team heading into the holidays and they are ready to serve our guests with a comprehensive suite of convenient delivery and pickup options, a wide range of new products and unique gift ideas and a strong emphasis on low prices and great value. We plan to leverage our current momentum into 2019, when we’ll achieve greater scale across the full slate of our initiatives - creating efficiencies and cost-savings, further strengthening our guest experience and positioning Target for profitable growth in the years ahead.”

Fourth Quarter and Full-Year 2018 Guidance
For the fourth quarter, Target expects comparable sales growth of approximately 5 percent, consistent with the Company’s year-to-date performance through third quarter 2018. For the full year, the Company continues to expect Adjusted EPS of $5.30 to $5.50 and GAAP EPS of $5.41 to $5.61. The 11-cent difference between expected full-year Adjusted EPS and GAAP EPS is driven by discrete items already reported through third quarter 2018.

The Company announced today that it plans to issue a post-holiday financial update on Thursday, January 10, 2019.

Operating Results
Total revenue of $17.8 billion increased 5.6 percent from $16.9 billion last year, reflecting sales growth of 5.7 percent and other revenue growth of 1.6 percent. Third quarter sales growth included a 5.1 percent increase in comparable sales and a 0.6 percentage point contribution from non-mature stores.  Comparable digital channel sales grew 49 percent and contributed 1.9 percentage points of comparable sales growth.  Operating income was $819 million in third quarter 2018, down 3.3 percent from $847 million in 2017.

Third quarter operating income margin rate was 4.6 percent, compared with 5.0 percent in 2017. Third quarter gross margin rate was 28.7 percent, compared with 29.6 percent in 2017. This decline reflected higher supply chain costs driven by growth in digital fulfillment costs and other expenses related to the size and timing of holiday-related inventory receipts compared with last year, partially offset by the benefit of merchant initiatives. Third quarter SG&A expense rate was 22.1 percent in 2018, essentially flat to last year. Third quarter SG&A results reflected continued investments in our team, specifically hours, training and wages, which were offset by continued cost discipline across the enterprise.

Interest Expense and Taxes from Continuing Operations
The Company’s third quarter 2018 net interest expense was $115 million, down 54.1 percent from $251 million last year, primarily driven by early debt retirement costs recognized in third quarter last year. Third quarter 2018 effective income tax rate from continuing operations was 13.6 percent, compared with 22.2 percent last year. Third quarter 2018 effective income tax rate from continuing operations reflects the net tax effect of the federal tax reform legislation (the Tax Act), including both ongoing and discrete benefits.

Capital Deployment
In third quarter 2018 the Company made capital investments of $1,017 million in property and equipment, and returned $863 million to shareholders, including:

  • Dividends of $337 million, compared with $339 million in third quarter 2017, reflecting a decline in share count partially offset by an increase in the dividend per share.
  • Share repurchases totaling $526 million that retired 6.3 million shares of common stock at an average price of $84.00.

As of the end of the third quarter, the Company had approximately $1.8 billion of remaining capacity under its current $5 billion share repurchase program, reflecting third quarter purchases and an accelerated share repurchase transaction which will settle in the fourth quarter.

For the trailing twelve months through third quarter 2018, after-tax return on invested capital (ROIC) was 15.8 percent, compared with 13.4 percent for the twelve months through third quarter 2017. Excluding the discrete impacts of the Tax Act, ROIC was 13.9 percent for the trailing twelve months ended November 3, 2018.  See the tables of this release for additional information about the Company’s ROIC calculation.

Conference Call Details
Target will webcast its third quarter earnings conference call at 7:00 a.m. CST today. Investors and the media are invited to listen to the call at (hover over “investors” then click on “events & presentations”). A telephone replay of the call will be available beginning at approximately 10:30 a.m. CST today through the end of business on November 23, 2018. The replay number is 800-331-1949.

Statements in this release regarding fourth quarter and full-year 2018 earnings per share and comparable sales guidance and the expected 2019 impact of our initiatives 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.

Related: Review Target's Complete Q3 Financial Statements

About Target Corporation
Minneapolis-based Target Corporation (NYSE: TGT) serves guests at more than 1,800 stores and at Since 1946, Target has given 5 percent of its profit to communities, which today equals millions of dollars a week. For the latest store count or for more information, visit For a behind-the-scenes look at Target, visit or follow @TargetNews on Twitter.