Release - Financial

Target Corporation Reports Third Quarter Earnings

  • Nov 18, 2020

Download PDF

  • Third quarter comparable sales grew 20.7 percent
    • Comparable traffic grew 4.5 percent, and average ticket grew 15.6 percent 
    • Store comparable sales increased 9.9 percent
    • Digital comparable sales grew 155 percent, accounting for 10.9 percentage points of Target’s comparable sales growth
    • Same-day services (Order Pick Up, Drive Up and Shipt) grew 217 percent
    • More than 95 percent of Target’s third quarter sales were fulfilled by its stores
  • Throughout the third quarter, the Company continued to gain market share across all five of its core merchandising categories. Year to date, the Company has gained more than $6 billion in market share.
  • Third quarter GAAP EPS from continuing operations of $2.01 was 46.3 percent higher than last year. Third quarter Adjusted EPSof $2.79 was 105.1 percent higher than last year, as strong operating performance offset continued investments in team member pay and benefits and safety measures to protect guests and team members.
  • Additional media materials

Target Corporation (NYSE: TGT) today announced its third quarter 2020 financial results, which reflected continued, robust growth in both sales and profitability. The Company reported third quarter GAAP earnings per share (EPS) from continuing operations of $2.01, up 46.3 percent from $1.37 in 2019. GAAP EPS included a $0.75 loss on debt extinguishment, which was excluded from Adjusted EPS. Third quarter Adjusted EPS of $2.79 grew 105.1 percent compared with $1.36 in 2019. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS.

“Our strong results in 2020 reflect the benefits of our multi-year effort to build a durable and flexible model, with a differentiated assortment and a suite of industry-leading fulfillment options - all brought to life through the passion and effort of our team. As a result, we’ve seen a deepening level of engagement and trust from our guests. The result is unprecedented market share gains and historically strong sales growth, both in our stores and our digital channels,” said Brian Cornell, chairman and chief executive officer of Target Corporation. “In preparation for the holiday season, we focused first on the safety of our guests and our team, making changes to eliminate crowds while enhancing our fast-growing, contactless options like in-store pickup, Drive Up and Shipt. In a holiday season that will feel different for our guests, we’re committed to helping them navigate the season safely, as they find new ways to celebrate with family and friends.”

Fiscal 2020 Guidance

During the first quarter, the Company withdrew its guidance given the unusually wide range of potential outcomes, in light of the highly fluid and uncertain outlook for consumer shopping patterns and the impact of COVID-19.

Operating Results

The Company’s total comparable sales grew 20.7 percent in the third quarter, reflecting comparable stores sales growth of 9.9 percent and digital sales growth of 155 percent. Total revenue of $22.6 billion grew 21.3 percent compared with last year, driven by sales growth of 21.3 percent and an 18.1 percent increase in other revenue. Operating income was $1.9 billion in third quarter 2020, up 93.1 percent from $1.0 billion in 2019.

Third quarter operating income margin rate was 8.5 percent in 2020 compared with 5.4 percent in 2019. Third quarter gross margin rate was 30.6 percent, compared with 29.8 percent in 2019, reflecting the benefit of merchandising actions, primarily from exceptionally low markdown rates, partially offset by the impact of higher digital fulfillment and supply chain costs, along with unfavorable category mix. Third quarter SG&A expense rate was 20.5 percent in 2020, compared with 22.3 percent in 2019, reflecting the benefit of leverage from strong sales growth, partially offset by the net impact of other factors, primarily investments in team member pay, benefits, and safety.

Interest Expense and Taxes

The Company’s third quarter 2020 net interest expense was $632 million, compared with $113 million last year. The increase was driven primarily by a $512 million charge related to the early retirement of debt in third quarter 2020.

Third quarter 2020 effective income tax rate was 21.9 percent, in line with 21.7 percent last year.

Capital Deployment and Return on Invested Capital

The Company paid dividends of $340 million in the third quarter, compared with $337 million last year, reflecting a 3.0 percent increase in the dividend per share, partially offset by a decline in average share count.

The Company has recently taken a number of actions in light of its strong operating performance and cash position. 

  • Today, the Company announced it has lifted its share repurchase suspension, which it had announced on March 25, at a time of unusually high uncertainty following the onset of the COVID-19 pandemic. The Company expects to resume share repurchases in 2021, consistent with its long-standing capital deployment policies and within the limits of its strong, middle-A credit ratings.  As of the end of the third quarter, the Company had approximately $4.5 billion of remaining capacity under the repurchase program approved by Target’s Board of Directors in September 2019.
  • In October, the Company executed a debt tender offer, deploying $2.3 billion in cash to retire $1.8 billion of long-term debt.
  • In early November, the Company terminated a supplementary 364 day credit facility, which had been secured in April given the uncertainty around COVID-19.

For the trailing twelve months through third quarter 2020, after-tax return on invested capital (ROIC) was 19.9 percent, compared with 15.0 percent for the twelve months through third quarter 2019. The increase to ROIC was driven primarily by increased profitability combined with a decrease in the base of invested capital. The tables in this release provide additional information about the Company’s ROIC calculation.

Webcast Details

Target will webcast its third quarter earnings conference call at 7:00 a.m. CT today. Investors and the media are invited to listen to the meeting at (click “investors” then click on “events & presentations”). A replay of the webcast will be provided when available. The replay number is 1-866-454-1406.


The statement in this release regarding the Company’s expected resumption of share repurchase activity in 2021 is a forward-looking statement within the meaning of the Private Securities Litigation Reform Act of 1995. Such statement is subject to risks and uncertainties which could cause the Company’s actions 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. 1, 2020 and Item 1A of the Company’s Form 10-Q for the fiscal quarter ended May 2, 2020. 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.

About Target

Minneapolis-based Target Corporation (NYSE: TGT) serves guests at nearly 1,900 stores and at Since 1946, Target has given 5% 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.

For more on the Target Foundation, click here.