Target

Our Brand Promise Our mission is to make Target the preferred shopping destination for our guests by delivering outstanding value, continuous innovation and an exceptional guest experience by consistently fulfilling our Expect More. Pay Less. brand promise. To support our mission, we are guided by our commitments to great value, the community, diversity and the environment.

Target
Our Founders George D. Dayton, a banker and real estate investor in Good fellow's Dry Goods company, the fourth largest department store in Minneapolis, Minn. The following years desiring greater involvement, Dayton takes soles ownership of the store and becomes the first president of the newly named Dayton Dry Good Company.

Background Information
After a decade of rapid growth, Dayton Dry Goods company is renamed. The Dayton company to better reflect its wide assortment of goods and services. It becomes commonly known as Daytons Department Store.

Background Information
The Dayton Company becomes a founding member of the retail research association, a cooperative of leading retailers. In 1918, the Association expands and is renamed the Associated Merchandising Corporation.

Background Information
As the Dayton Company looks for new ways to strengthen relationships with guests, company leadership recognizes an opportunity to develop and introduce a new kind of mass-market discount store that caters to valueoriented shoppers seeking a higher quality experiences. At the time, the move toward massmarket retail is considered risky by some industry experts as it moves away from the companys dominant position as a department store retailer. By demonstrating vision leadership, the company takes the first step toward transforming the organization from a family run department stores chain in to the one of the nations largest discount store chains.

Background Information

Target expands fresh food offerings into store nationwide.

Products Target Offers

Services Target Offers

Sales
40,000 35,000 30,000 25,000 20,000 15,000 10,000

5,000
0 August Year to date

Comparable Store % sales changes

4.5 4 3.5 3 2.5 August Year to date

2
1.5 1 0.5 0 This Year Last Year

Geographic Distribution
1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Regular stores Super Target Stores Regional Distribution Center 49 States 22 States

26 States

Total Revenues / EBIT

70,000 60,000

50,000

40,000

Revenue EBIT

30,000

20,000

10,000

0 2006 2007 2008 2009 2010

Net Earning / EPS

100%

EPS 100% Net Earning

100% 2006 2007 2008 2009 2010

Sales by Product Category

70
60

50

40

2008 2009

30

2010

20

10

0 Household essentials Hardlines Apparel and accessories Home furnishings and dcor Food and pet supplies

DuPont Analysis
60

50

40 2011 2010 30

2009

20

10

0 Net Margin Asset Turnover ROA ROE

DuPont Analysis
30

25

20 2011 2010 15

2009

10

0 Inventory Turnover Receivable Turnover Current Ratio Quick Ratio

2011 Assets

2010

2012

Current Assets
Cash And Cash Equivalents Short Term Investments Net Receivables Inventory Other Current Assets Total Current Assets Long Term Investments Property Plant and Equipment Goodwill Intangible Assets Accumulated Amortization 1,712,000 6,153,000 7,596,000 1,752,000 17,213,000 25,493,000 2,200,000 6,966,000 7,179,000 2,079,000 6152729 7367760 1699260 1,660,460

18,424,000 16,880,209 25,280,000 24727940

Other Assets Deferred Long Term Asset Charges

Total Assets

999,000
43,705,000

829,000
-

968760

44,533,000 42,576,909

Total Current Liabilities Long Term Debt Other Liabilities Deferred Long Term Liability Charges Minority Interest Negative Goodwill Total Liabilities Stockholders' Equity Misc Stocks Options Warrants Redeemable Preferred Stock Preferred Stock Common Stock Retained Earnings Treasury Stock Capital Surplus Other Stockholder Equity Total Stockholder Equity Net Tangible Assets

10,070,000 15,607,000 1,607,000 934,000 28,218,000

11,327,000 15,118,000 1,906,000 835,000 29,186,000

9767090 15138340 1558340 905530 27369300

59,000 12,698,000 3,311,000 -581,000 15,487,000 15,487,000

62,000 109,310 12,947,000 12468079 2,919,000 3211220 -581,000 -581,000 15,347,000 15,207,609 15,347,000 15,207,609

Asset Management Ratios

12.0

10.0

8.0 2010 6.0 2011

4.0

2.0

0.0 Receivable Turnover Inventory Turnover Fixed Asset Turnover

Common Size IS/BS

2011 Balance Sheet

$
Income Statement Revenue Cost of Goods Sold Gross Profit Operating Expenses Operating Income(Loss) Other Income/Expenses Net 67,390 (45,725) 21,665 (16,413) 5,252 (80)

Percent
of Sales 100.0% -67.9% 32.1% -24.4% 7.8% -0.1%

Cash

583

0.9%

Short Term Investments

Accounts Receivable Inventory Other Current Assets Total Current Asssets Net Fixed Assets Other Assets Total Assets Current Liabilities Accounts Payable

1,129
6,153 7,596 1,752 17,213 25,493 999 43,705

1.7%
9.1% 11.3% 2.6% 25.5% 37.8% 1.5% 64.9%

EBIT
Interest Expense EBT Tax Expense Net Income

5,172
(677) 4,495 (1,575) 2,920

7.7%
-1.0% 6.7% -2.3% 4.3%

9,951 119 28,218 15,487 43,705

14.8% 0.2% 41.9% 23.0% 64.9%

Debt Total Liabilities Stockholders' Equity Total Liabilities and Equity

Next Years Sales Growth Forecast

2011 $ Income Statement Revenue Cost of Goods Sold Gross Profit Operating Expenses Operating Income(Loss) Other Income/Expenses Net EBIT Interest Expense EBT Tax Expense Net Income Percent of Sales 67,390 100.0% (45,725) -67.9% 21,665 32.1% 2012 Increase in sales 10% 74,129 (50,298) 23,832 (16,413) 7,419 (80) 7,339 (677) 6,662 (2,334) 4,327 Balance Sheet Cash 2011 583 0.9% 2012 641

Short Term Investments

Accounts Receivable Inventory Other Current Assets Total Current Asssets Net Fixed Assets Other Assets 5,252 (80) 5,172 (677) 4,495 (1,575) 2,920 7.8% -0.1% 7.7% -1.0% 6.7% -2.3% 4.3% Total Assets Current Liabilities Accounts Payable Debt Total Liabilities Stockholders' Equity Total Liabilities and Equity Net New Financing (AFN)

1,129
6,153 7,596 1,752 17,213 25,493 999 43,705

1.7%
9.1% 11.3% 2.6% 25.5% 37.8% 1.5% 64.9%

1,129
6,768 8,356 1,927 18,821 28,042 1,099 47,963

(16,413) -24.4%

9,951 119 28,218 15,487 43,705

14.8% 0.2% 41.9% 23.0% 64.9%

10,946 119 29,213 18,949 48,162 (199)

Faster/Slower Growth Income Statement

2011 $ Income Statement Revenue Cost of Goods Sold Gross Profit Operating Expenses Operating Income(Loss) Other Income/Expenses Net EBIT Interest Expense EBT Tax Expense Net Income 67,390 (45,725) 21,665 (16,413) 5,252 (80) 5,172 (677) 4,495 (1,575) 2,920 Percent of Sales 100.0% -67.9% 32.1% -24.4% 7.8% -0.1% 7.7% -1.0% 6.7% -2.3% 4.3% 2012 Increase in sales 10% 74,129 (50,298) 23,832 (16,413) 7,419 (80) 7,339 (677) 6,662 (2,334) 4,327 Sensitivity Analysis Faster 20% 80,868 (54,870) 25,998 (16,413) 9,585 (80) 9,505 (677) 8,828 (3,093) 5,735 Slower 5% 70,760 (48,011) 22,748 (16,413) 6,335 (80) 6,255 (677) 5,578 (1,955) 3,624

Faster/Slower Growth Balance Sheet

Balance Sheet Cash Short Term Investments Accounts Receivable Inventory Other Current Assets Total Current Asssets Net Fixed Assets Other Assets Total Assets Current Liabilities Accounts Payable Debt Total Liabilities Stockholders' Equity Total Liabilities and Equity Net New Financing (AFN) 9,951 119 28,218 15,487 43,705 14.8% 0.2% 41.9% 23.0% 64.9% 10,946 119 29,213 18,949 48,162 (199) 11,941 119 30,208 20,075 50,283 1,937 10,449 119 28,716 18,386 47,102 (1,268) 2011 10% 583 1,129 6,153 7,596 1,752 17,213 25,493 999 43,705 0.9% 1.7% 9.1% 11.3% 2.6% 25.5% 37.8% 1.5% 64.9% 641 1,129 6,768 8,356 1,927 18,821 28,042 1,099 47,963 2012 20% 700 1,129 7,384 9,115 2,102 20,430 30,592 1,199 52,220 5% 612 1,129 6,461 7,976 1,840 18,017 26,768 1,049 45,834

SWOT Analysis
Strengths
Profit margin, Debt/Equity

Weaknesses
Low current assets, ROA

Opportunities
Canadian stores, REDcard

Threats
Competitive retail industry

Porters 5 Forces
Threat of entry
Brand equity, access to distribution

Threat of substitute
Substandard product, buyer switching costs

Customer bargaining power

Buyer price sensitivity, differential advantage

Supplier bargaining power

Supplier competition, strength of distribution channel

Competitive rivalry
Level of advertising expense, use of web sites

Additional Recommendations/Comments
Shows good signs of growth Positive outlook with investments Good place to invest in with high returns Maybe profitable to focus on REDcard