Target Corporation Summarizes New Financial Statement Format and Changes in Advance of Q4 Earnings Release - Background and Presentation Impact

Sep 15, 2026

Uploaded by Jasmine

Target Corporation provides advance disclosure of presentation changes reflected in its Q4 earnings release and 2025 Financial Community Meeting. The company consolidates prior revenue lines into a single Net Sales line and updates Gross Margin to be calculated as Net Sales minus Cost of Sales, with the Gross Margin Rate based on that definition. It also reclassifies certain advertising and third-party digital marketplace expenses from SG&A to Cost of Sales, restating prior periods without net impact on key results.

LanguageEnglish

CategoryPresentations

FormatPDF

Pages3

Reading Time1 min

AccessFree to download

Background

Revenue Presentation Change

Gross Margin Calculation

Reclassifications

Impact on Results

Updated Quarterly Schedules

Updated Year-to-Date Schedules

Target Corporation Summarizes New Financial Statement Format and Changes in Advance of Q4 Earnings Release Background On March 4, 2025, Target Corporation will report its fourth quarter and full-year earnings and host its 2025 Financial Community Meeting. The Company’s earnings release will reflect certain presentation changes described below that affect prior period comparability. The following schedules summarize the impact of these presentation changes on quarterly and year-to-date amounts for the years 2022 through the third quarter of 2024, which have been updated to conform with the current presentation. Revenue Presentation Change In the fourth quarter of 2024, the Company changed its presentation of revenue in its Consolidated Statements of Operations, consolidating the previous three-line format (“Sales”,“Other Revenue”, and “Total Revenue”) to a single line labeled "Net Sales", which reflects all revenues (formerly “Total Revenue”) . Gross Margin Calculation In alignment with the revenue presentation change, beginning with the fourth quarter of 2024, Gross Margin is calculated as Net Sales less Cost of Sales, and the Company’s Gross Margin Rate is calculated by dividing Gross Margin by Net Sales. Previously Gross Margin Rate was calculated based only on Merchandise Sales (formerly“Sales”) . Reclassifications Additionally, in the fourth quarter of 2024, the Company reclassified certain expenses related to our advertising and third-party digital marketplace business offerings from Selling, General, and Administrative (SG&A) Expenses to Cost of Sales. The reclassifications had no net impact on Net Sales, Operating Income, Net Earnings or Earnings Per Share. impact of transition to single-line presentation of revenues andreclassification of certain expenses from SG&A to Cost of Sales | Quarterly | 2024 | 2023 | 2022 | | --- | --- | --- | --- | | (dollars in
millions) (unaudited) | Q3 Q2 Q1 | Q4 (a) Q3 Q2 Q1 | Q4 Q3 Q2 Q1 | | As previously reported | | | | | Sales | $ 25,228 $ 25,021 $ 24,143 | $ 31,467 $ 25,004 $ 24,384 $ 24,948 | $ 30,983 $ 26,122 $ 25,653 $ 24,830 | | Other revenue | 440 431 388 | 452 394 389 374 | 412 396 384 340 | | Total revenue | $ 25,668 $ 25,452 $ 24,531 | $ 31,919 $ 25,398 $ 24,773 $ 25,322 | $ 31,395 $ 26,518 $ 26,037 $ 25,170 | | Cost of sales | 18,375 17,799 17,449 | 23,403 18,149 17,798 18,386 | 23,946 19,680 20,142 18,461 | | Gross margin | $ 6,853 $ 7,222 $ 6,694 | $ 8,064 $ 6,855 $ 6,586 $ 6,562 | $ 7,037 $ 6,442 $ 5,511 $ 6,369 | | Gross margin rate | 27.2 % 28.9 % 27.7 % | 25.6 % 27.4 % 27.0 % 26.3 % | 22.7 % 24.7 % 21.5 % 25.7 % | | SG&A expenses | $ 5,486 $ 5,392 $ 5,168 | $ 6,029 $ 5,316 $ 5,184 $ 5,025 | $ 5,675 $ 5,219 $ 5,002 $ 4,762 | | SG&A expense rate | 21.4 % 21.2 % 21.1 % | 18.9 % 20.9 % 20.9 % 19.8 % | 18.1 % 19.7 % 19.2 % 18.9 % | | | | | | | Updated | | | | | Net sales (previously Total revenue) | $ 25,668 $ 25,452 $ 24,531 | $ 31,919 $ 25,398 $ 24,773 $ 25,322 | $ 31,395 $ 26,518 $ 26,037 $ 25,170 | | Cost of sales | 18,402 17,826 17,471 | 23,427 18,172 17,823 18,406 | 23,972 19,702 20,153 18,479 | | Gross margin | $ 7,266 $ 7,626 $ 7,060 | $ 8,492 $ 7,226 $ 6,950 $ 6,916 | $ 7,423 $ 6,816 $ 5,884 $ 6,691 | | Gross margin rate | 28.3 % 30.0 % 28.8 % | 26.6 % 28.5 % 28.1 % 27.3 % | 23.6 % 25.7 % 22.6 % 26.6 % | | SG&A expenses | $ 5,459 $ 5,365 $ 5,146 | $ 6,005 $ 5,293 $ 5,159 $ 5,005 | $ 5,649 $ 5,197 $ 4,991 $ 4,744 | | SG&A expense rate | 21.3 % 21.1 % 21.0 % | 18.8 % 20.8 % 20.8 % 19.8 % | 18.0 % 19.6 % 19.2 % 18.8 % | | | | | | | Gross margin rate impact of changes (percentage points) | 1.1 pp 1.1 pp 1.1 pp | 1.0 pp 1.1 pp 1.1 pp 1.0 pp | 0.9 pp 1.0 pp 1.1 pp 0.9 pp | | SG&A expense rate impact of changes (percentage points) | (0.1) pp (0.1) pp (0.1) pp | (0.1) pp (0.1) pp (0.1) pp 0.0 pp | (0.1) pp (0.1) pp 0.0 pp (0.1) pp | (a) The fourth quarter of 2023 consisted of 14 weeks compared with 13 weeks in the comparable perio

FAQs

What revenue presentation change did Target make in 2024?

Target changed its Consolidated Statements of Operations to present revenue as a single line labeled "Net Sales," consolidating prior "Sales," "Other Revenue," and "Total Revenue" into one measure.

How is Gross Margin calculated starting in the fourth quarter of 2024?

Gross Margin is calculated as Net Sales less Cost of Sales, and the Gross Margin Rate is calculated by dividing Gross Margin by Net Sales, replacing the prior Merchandise Sales-based approach.

What reclassifications occurred and what was their impact?

Certain advertising and third-party digital marketplace expenses were reclassified from SG&A Expenses to Cost of Sales. The reclassifications had no net impact on Net Sales, Operating Income, Net Earnings, or Earnings Per Share.

Sep 15, 2026

Uploaded by Jasmine