Press Release

Target Reports Fourth Quarter and Full-Year 2018 Earnings

  • Mar 5, 2019


Strong Q4 Caps Off Best Full-Year Comp Sales Growth in More than a Decade

  • Fourth quarter comparable sales grew 5.3 percent on traffic growth of 4.5 percent.
    • In the fourth quarter, comparable store sales grew 2.9 percent, and comparable digital sales grew 31 percent.
    • Stores fulfilled nearly three quarters of Target’s fourth-quarter digital sales.
  • For both the fourth quarter and full year, the Company saw healthy comparable sales growth and market-share gains across all five of its core merchandise categories.
  • Full-year comparable sales grew 5.0 percent — Target’s strongest performance since 2005.
  • Full-year GAAP EPS from continuing operations of $5.50 and Adjusted EPS1 of $5.39 established new all-time highs for the Company.
  • Target returned $951 million to shareholders in the fourth quarter through dividends and share repurchases, bringing the total to $3.4 billion for full-year 2018.
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Target Corporation (NYSE: TGT) today announced its fourth-quarter and full-year 2018 results. The Company reported GAAP earnings per share (EPS) from continuing operations of $1.52 in fourth quarter and $5.50 for full-year 2018, compared with $1.99 and $5.29 in 2017, respectively.  Fourth quarter Adjusted EPS were $1.53 and full-year Adjusted EPS were $5.39, compared with $1.36 and $4.69 in 2017, respectively.

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 with our fourth quarter performance, which capped off an outstanding year for Target. Thanks to the dedication of Target’s team, we delivered our strongest traffic and comparable sales growth in well over a decade and our 2018 Adjusted EPS set a new all-time record for the Company,” said Brian Cornell, chairman and chief executive officer of Target Corporation. “We have been driving an ambitious agenda to transform our Company, evolve with our guests and drive strong growth. On every count we’ve been successful, and as we enter 2019, we will continue to lead the industry by adapting, innovating and delivering more for our guests and shareholders.”

Fiscal 2019 Guidance
In first quarter 2019, Target expects a low- to mid-single digit increase in comparable sales, and both GAAP EPS from continuing operations and Adjusted EPS of $1.32 to $1.52.

For full-year 2019, Target expects a low- to mid-single digit increase in comparable sales and a mid-single digit increase in operating income. The Company expects both GAAP EPS from continuing operations and Adjusted EPS of $5.75 to $6.05.

First quarter and full-year 2019 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.

Operating Results
Comparable sales grew 5.3 percent in the fourth quarter. Stores comparable sales grew 2.9 percent in the fourth quarter, while comparable digital sales grew 31 percent, contributing 2.4 percentage points to comparable sales growth.  Total revenue of $23.0 billion was essentially flat to last year. Operating income was $1,117 million in fourth quarter 2018, compared with $1,129 million in 2017. The year-over-year comparisons for both total revenue and operating income reflect the impact of an additional fiscal week in fourth quarter 2017.

Fourth quarter operating income margin rate was 4.9 percent in both 2018 and 2017. Fourth quarter gross margin rate was 25.7 percent, compared with 26.1 percent in 2017. This decline reflected higher digital fulfillment and supply chain costs, partially offset by the benefit of merchandising strategies. Fourth quarter SG&A expense rate was 19.0 percent in 2018, compared with 19.4 percent in 2017. Fourth quarter SG&A results reflected the benefit of cost efficiencies across a broad set of expense categories combined with the leverage benefit of strong comparable sales growth, partially offset by higher compensation expense.

Interest Expense and Taxes from Continuing Operations
The Company’s fourth quarter 2018 net interest expense was $110 million, compared with $131 million last year, reflecting debt maturities that have resulted in lower average debt balances and a lower average coupon rate. Fourth quarter 2018 effective income tax rate from continuing operations was 21.4 percent, compared with (7.5) percent last year. Fourth quarter 2017 effective tax rate reflected a $343 million net benefit from the remeasurement of our net deferred tax liabilities following the enactment of the Tax Cuts and Jobs Act of 2017 (Tax Act).

Shareholder Returns
The Company returned $951 million to shareholders in fourth quarter 2018, including:

  • Dividends of $334 million, compared with $337 million in fourth quarter 2017, reflecting a decline in share count partially offset by a 3.2 percent increase in the dividend per share.
  • Share repurchases totaling $617 million that retired 8.3 million shares of common stock at an average price of $74.72.

At the end of the fourth quarter, the Company had approximately $1.6 billion of remaining capacity under its current $5 billion share repurchase program.

For the trailing twelve months through fourth quarter 2018, after-tax return on invested capital (ROIC) was 14.7 percent, compared with 15.4 percent for the twelve months through fourth quarter 2017. Excluding the discrete impacts of the Tax Act, ROIC was 14.6 percent for the trailing twelve months ended February 2, 2019, compared with 13.6 percent in 2017.  See the tables of this release for 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 (hover over “investors” then click on “events & presentations”). A replay of the webcast will be available within four hours of the meeting’s conclusion.

Statements in this release regarding first quarter and full-year 2019 earnings per share, comparable sales guidance and operating income 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.

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.

About Target
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 more information, visit For a behind-the-scenes look at Target, visit or follow @TargetNews on Twitter.