Target Corp. is a growth company focused exclusively on general merchandise retailing. Our principal operating strategy is to provide exceptional value to American consumers through multiple retail formats ranging from upscale discount and moderate-priced to full-service department stores. Store brands include Target, Marshall Field's and Mervyn's.

Fiscal 2006 EPS $3.21

MINNEAPOLIS--(BUSINESS WIRE)--Feb. 27, 2007--Target Corporation (NYSE:TGT) today reported net earnings of $1.119 billion for the fourth quarter ended February 3, 2007, a 14-week period, compared with $939 million in the fourth quarter ended January 28, 2006, a 13-week period. Earnings per share in the fourth quarter 2007 increased 21.7 percent to $1.29 per share from $1.06 per share in the same period a year ago. All earnings per share figures refer to diluted earnings per share.

For the full fiscal year 2006, a 53-week period, net earnings were $2.787 billion, compared with $2.408 billion in fiscal 2005, a 52-week period. Earnings per share increased 18.5 percent to $3.21 per share from $2.71 per share a year ago.

"We are pleased with our performance in 2006, which reflects the strength of our strategic direction and disciplined execution," said Bob Ulrich, chairman and chief executive officer of Target Corporation. "In 2007, we remain focused on delighting our guests, creating a preferred workplace for our team members and supporting the communities in which we operate, positioning us to generate considerable profitable market share growth and superior value for our shareholders over time."

Full-Year Results

For fiscal 2006, total revenues increased 13.1 percent to $59.490 billion from $52.620 billion in 2005, fueled by the contribution from new store expansion, a 4.8 percent increase in comparable store sales (based on a 52-week period in both years), the impact of one additional week and the contribution from our credit card operations. Total revenues include retail sales and net credit card revenues. Comparable-store sales are sales from stores open longer than one year.

Earnings before interest expense and income taxes (EBIT) for the full year increased 17.3 percent to $5.069 billion, compared with $4.323 billion a year ago. EBIT in our core retail operations grew 11.2 percent, while the contribution of our credit card operations to total EBIT rose 51.9 percent. Within our core retail operations, gross margin rate was essentially unchanged from the prior year, while the company's expense rate was unfavorable to the prior year. Gross margin rate represents sales less cost of sales expressed as a percentage of sales. Expense rate represents selling, general and administrative expenses expressed as a percentage of sales.

Total year net interest expense increased $109 million compared with 2005, primarily due to growth in the cost of funding our credit card operations.

Earnings before taxes (EBT) for the full year totaled $4.497 billion, representing an increase of $637 million, or 16.5 percent, from the same period in 2005. The contribution from the company's credit card operations to these results was $693 million, an increase of $241 million, or 53.3 percent, from a year ago.

Fourth-Quarter Results

Total revenues in the fourth quarter increased 16.3 percent to $19.710 billion from $16.947 billion in 2005, driven by the extra week of sales, the contribution from new store expansion, a 4.8 percent increase in comparable store sales (based on a 13-week period in both years) and the contribution from our credit card operations.

Fourth quarter 2006 EBIT increased 22.1 percent to $1.960 billion, compared with $1.606 billion in the fourth quarter a year ago. EBIT in our core retail operations grew 19.5 percent, while the contribution of our credit card operations to total EBIT rose 40.7 percent. Within our core retail operations, gross margin rate in the quarter was slightly favorable and the company's expense rate was slightly unfavorable to the prior year.

Net interest expense for the quarter increased $27 million compared with fourth quarter 2005, due to growth in the cost of funding our credit card operations and the additional week.

EBT in the fourth quarter totaled $1.809 billion, representing an increase of $327 million, or 22.1 percent, from the same period in 2005. The contribution from the company's credit card operations to these results was $187 million, an increase of $54 million, or 40.7 percent, from a year ago.