10-KPeriod: FY2008

TARGET CORP Annual Report, Year Ended Feb 2, 2008

Filed March 13, 2008For Securities:TGT

Summary

Target Corporation's 2007 10-K report, filed in March 2008, reflects a period of slower sales and earnings growth compared to recent years. Net earnings increased by 2.2% to $2.849 billion, and diluted earnings per share rose by 3.9% to $3.33. Total revenues grew by 6.2%, with comparable-store sales increasing by 3.0%. The company continued to invest in expansion, opening 118 new stores. Target's credit card operations, REDcards, remained a significant contributor to profitability, with credit card revenues increasing by 17.6% and contributing $600 million to earnings before taxes. Financially, Target maintained a strong position, generating $4.125 billion in cash flow from operations. The company continued its robust share repurchase program, investing $2.642 billion in buybacks during the year, and also maintained its dividend payments, signaling a commitment to returning value to shareholders. Management anticipates continued growth in 2008, projecting total revenue growth in the 8-9% range, supported by new store openings and expected comparable-store sales increases. The company's strategic focus remains on enhancing the guest experience, supported by its supply chain and technology infrastructure.

Financial Highlights

29 data points
Beta

Revenue

$63.37B

32.3% Gross Margin

Net Income

$2.85B

4.5% Net Margin

EPS (Diluted)

$3.33

Free Cash Flow

-$244.00M

Financial Statements
Beta
Revenue$63.37B
Cost of Revenue$42.93B
Gross Profit$20.44B
SG&A Expenses$12.67B
Interest Expense$647.00M
Net Income$2.85B
EPS (Basic)$3.37
EPS (Diluted)$3.33
Shares Outstanding (Basic)845.40M
Shares Outstanding (Diluted)850.80M

Key Highlights

  • 1Fiscal year 2007 saw slower sales and earnings growth, with net earnings up 2.2% to $2.849 billion and diluted EPS up 3.9% to $3.33.
  • 2Total revenues increased by 6.2% to $63.4 billion, driven by new store openings and a 3.0% comparable-store sales growth.
  • 3Credit card operations (REDcards) contributed significantly, with revenues up 17.6% to $1.9 billion and EBT contribution of $600 million.
  • 4Generated strong operating cash flow of $4.125 billion.
  • 5Continued aggressive share repurchase program, repurchasing $2.642 billion of common stock.
  • 6Announced plans for continued expansion in fiscal year 2008, expecting 8-9% total revenue growth with comparable-store sales increasing by 2-3%.
  • 7The company operates as a single business segment and has a substantial physical footprint with 1,591 stores across the U.S.

Frequently Asked Questions

In fiscal year 2007, Target experienced slower sales and earnings growth compared to recent years. Net earnings increased by 2.2% to $2.849 billion, and diluted earnings per share grew by 3.9% to $3.33. Total revenues rose by 6.2% to $63.4 billion, with comparable-store sales increasing by 3.0%.

Target's credit card operations, particularly through its REDcard products, remained a strong contributor to profitability. Credit card revenues increased by 17.6% to $1.9 billion, and the credit card contribution to earnings before taxes (EBT) rose by 20.8% to $600 million.

Management anticipates continued growth in fiscal year 2008, projecting total revenue growth in the 8-9% range. This is expected to be driven by ongoing new store expansion and an anticipated comparable-store sales increase of 2-3%.

Target generated substantial operating cash flow of $4.125 billion in 2007. The company actively returned capital to shareholders through share repurchases, investing $2.642 billion in buybacks under a new $10 billion program, and continued to pay dividends, totaling $454 million.