Target 2007 Annual Report Download - page 22

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PART I
Item 1. Business
General
Target Corporation (the Corporation or Target) was incorporated in Minnesota in 1902. We operate large-
format general merchandise and food discount stores in the United States, which include Target and
SuperTarget stores. We offer both everyday essentials and fashionable, differentiated merchandise at
exceptional prices. Our ability to deliver a shopping experience that is preferred by our guests is supported by
our strong supply chain and technology infrastructure, a devotion to innovation that is ingrained in our
organization and culture, and our disciplined approach to managing our current business and investing in
future growth. We operate as a single business segment.
Our credit card operations represent an integral component of our core retail business. Through our
branded proprietary credit card and debit card products (REDcards), we strengthen the bond with our guests,
drive incremental sales and contribute meaningfully to earnings. We also operate a fully integrated online
business, Target.com. Although Target.com is small relative to our overall size, its sales are growing at a much
more rapid pace than our in-store sales, and it provides important benefits to our stores and credit card
operations.
We are committed to consistently delighting our guests, providing a workplace that is preferred by our
team members and investing in the communities where we do business to improve the quality of life. We
believe that this unwavering focus, combined with disciplined execution of the fundamentals of our strategy,
will enable us to continue generating profitable market share growth and delivering superior shareholder
value for many years to come.
Financial Highlights
Our fiscal year ends on the Saturday nearest January 31. Unless otherwise stated, references to years in
this report relate to fiscal years, rather than to calendar years. Fiscal year 2007 (2007) ended February 2, 2008
and consisted of 52 weeks. Fiscal year 2006 (2006) ended February 3, 2007 and consisted of 53 weeks. Fiscal
year 2005 (2005) ended January 28, 2006 and consisted of 52 weeks.
For information on key financial highlights, see the items referenced in Item 6, Selected Financial Data,
and Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this
Form 10-K.
Seasonality
Due to the seasonal nature of our business, a substantially larger share of total annual revenues and
earnings occur in the fourth quarter because it includes the peak sales period from Thanksgiving to the end of
December.
Merchandise
We operate Target general merchandise stores with a wide assortment of general merchandise and a
limited assortment of food items, as well as SuperTarget stores with a full line of food and general merchandise
items. Target.com offers a wide assortment of general merchandise including many items found in our stores
and a complementary assortment, such as extended sizes and colors, sold only online. A significant portion of
our sales is from national brand merchandise. In addition, we sell merchandise under private-label brands
including, but not limited to, Archer Farms, Boots & Barkley, Choxie, Circo, Durabuilt, Embark,
Gilligan & O’Malley, Home and Bullseye Design, Kaori, Market Pantry, Merona, Playwonder, ProSpirit,
Trutech and Xhilaration. We also sell merchandise through unique programs such as ClearRxSM, Global
Bazaar and GO International. In addition, we also sell merchandise under licensed brands including, but not
limited to, C9 by Champion, Converse, Chefmate, Cherokee, Eddie Bauer, Fieldcrest, Genuine Kids by Osh
Kosh, Isaac Mizrahi for Target, Kitchen Essentials by Calphalon, Liz Lange for Target, Michael Graves Design,
Mossimo, Nick & Nora, Perfect Pieces by Victoria Hagan, Sean Conway, Simply Shabby Chic, Smith &
Hawken, Sonia Kashuk, Thomas O’Brien, Waverly and Woolrich. We also generate revenue from in-store
amenities such as Food Avenue, Target ClinicSM, Target PharmacySM, and Target PhotoSM, and from leased or
licensed departments such as Optical, Pizza Hut, Portrait Studio and Starbucks.
4