Target 2015 Annual Report Download - page 7

Download and view the complete annual report

Please find page 7 of the 2015 Target annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 84

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84

PART I
Item€1.€€€€Business
General
Target Corporation (Target, the Corporation or the Company) was incorporated in Minnesota in 1902. We offer our
customers, referred to as "guests," everyday essentials and fashionable, differentiated merchandise at discounted
prices. Our ability to deliver a preferred shopping experience to our guests is supported by our supply chain and
technology, our devotion to innovation, and our disciplined approach to managing our business and investing in future
growth. We operate as a single segment designed to enable guests to purchase products seamlessly in stores or
through our digital sales channels.
Prior to the first quarter of 2013, we operated a U.S. Credit Card Segment that offered credit to qualified guests through
our branded credit cards. In the first quarter of 2013, we sold our U.S. consumer credit card portfolio, and TD Bank
Group (TD) now underwrites, funds, and owns Target Credit Card and Target MasterCard consumer receivables in
the U.S. We perform account servicing and primary marketing functions and earn a substantial portion of the profits
generated by the portfolio. Refer to Note€9 of the Consolidated Financial Statements included in Item 8, Financial
Statements and Supplementary Data (the Financial Statements) for more information on the credit card receivables
transaction.
Prior to January 15, 2015, we operated a Canadian Segment. On January 15, 2015, we announced our exit from the
Canadian market, and Target Canada Co. and certain other wholly owned subsidiaries of Target filed for protection
(the Filing) in Canada under the Companies' Creditors Arrangement Act (CCAA) with the Ontario Superior Court of
Justice in Toronto (the Court). Following the Filing, we no longer consolidate our former Canadian retail operation.
Canadian financial results prior to the Filing are included in our financial statements and classified within discontinued
operations. See Item€7, Management's Discussion and Analysis of Financial Condition and Results of Operations
(MD&A) and Note 7 of the Financial Statements for more information.
Prior to December 16, 2015, we operated pharmacies and clinics in 1,672 and 79 of our stores, respectively. On
December 16, 2015, we sold our pharmacy and clinic businesses to CVS Pharmacy, Inc. (CVS). Following the sale,
CVS will operate the pharmacy and clinic businesses in our stores under a perpetual operating agreement, subject to
termination in limited circumstances. See MD&A and Note 6 of the Financial Statements for more information.
Discontinued operations in this Annual Report on Form 10-K refers only to our discontinued Canadian operations.
Financial Highlights
For information on key financial highlights and segment financial information, see the items referenced in Item€6,
Selected Financial Data, MD&A, and Note 30 of the Financial Statements.
Seasonality
A larger share of annual revenues and earnings traditionally occurs in the fourth quarter because it includes the peak
holiday sales period of November and December.
Merchandise
We sell a wide assortment of general merchandise and food. The majority of our general merchandise stores offer an
edited food assortment, including perishables, dry grocery, dairy, and frozen items. Nearly all of our stores larger than
170,000 square feet offer a full line of food items comparable to traditional supermarkets. Our small, flexible format
stores, generally smaller than 50,000 square feet, offer edited general merchandise and food assortments. Our digital
channels include a wide assortment of general merchandise, including many items found in our stores, along with a
complementary assortment such as additional sizes and colors sold only online.
2