Target Corporation

Human capital and workforce · Talent acquisition and retention

We rely on a large, global, and changing workforce of team members, contractors, and temporary staffing. If we do not effectively manage our workforce, our labor costs and results of operations could be adversely affected. Our business is dependent on our ability to attract, train, and retain the appropriate mix of qualified team members, contractors, and temporary staffing.

Human capital and workforce · Skills shortage and training requirements

The continuous advancements in automation and artificial intelligence capabilities will continue to impact the skills required in our workforce, and our recruiting and training needs must evolve to maintain pace.

Supply chain and procurement · Supplier operation and dependance

We are dependent on our vendors, independent contractors, and other third parties (including common carriers) to supply merchandise to our distribution centers, stores, and guests. If our replenishment and fulfillment network does not operate properly, if we are unable to timely import certain merchandise, if a vendor fails to deliver on its commitments, we could experience merchandise out-of-stocks, delays in shipping and receiving merchandise, and increased costs.

Supply chain and procurement · Raw material availability and cost volatility

Approximately one-half of the merchandise that we offer is sourced, directly or indirectly, from outside the U.S., with China as our single largest source of merchandise we import. U.S. tariffs imposed or threatened to be imposed on several countries in 2025, including China, India, Vietnam and Bangladesh, have resulted, and could continue to result, in us incurring substantial additional costs to procure a large portion of the merchandise we offer.

Core operations · Quality control and product defects

Any failure of our owned brands to meet applicable safety standards or Target's or our guests' expectations regarding safety, quality, supply chain transparency, and responsible sourcing could expose us to government enforcement actions and private litigation, result in costly product recalls and other liabilities.

Industry regulation · Regulatory compliance and changes

Our failure to comply with applicable laws, or changes in these laws, could adversely affect our reputation, results of operations, and financial condition. Our business is subject to a wide variety of complex foreign, national, state, and local laws and regulations.

Legal and litigation · Product liability and warranty claims

Failure to address product safety and sourcing concerns could adversely affect our results of operations. If any of our merchandise offerings do not meet applicable safety standards or Target's or our guests' expectations regarding safety, supply chain transparency, and responsible sourcing, we could be exposed to legal and reputational risks.

Legal and litigation · Employment and labor law compliance

Our expenses could increase and our operations could be adversely affected by changes in law or adverse judicial developments involving our workforce, including an employer's obligation to recognize collective bargaining units, minimum wage requirements, advance scheduling notice requirements, health care or other mandates, the classification of exempt and non-exempt employees, and the classification of workers as either employees or independent contractors.

Corporate governance · Shareholder rights and activism

Shareholder activism could adversely affect our business, strategic execution, and stock price. We regularly engage with shareholders with a goal of strengthening our business. From time to time, shareholders may pursue public or private campaigns to influence our corporate strategy, capital allocation, or environmental, political, social, and governance matters.

Reputation and brand · Brand damage and negative publicity

Negative incidents (including those based on differing perspectives or opinions) involving us, our workforce, or others with whom we do business could quickly erode trust and confidence and result in changes in consumer behavior including consumer boycotts, workforce unrest or walkouts, government investigations, and litigation.

Market position and competition · Market cyclicality and demand volatility

We depend on seasonal moments and higher-margin merchandise to drive sales and net earnings growth. Our business experiences some seasonality, with a larger portion of our sales traditionally occurring in the fourth quarter because it includes the November and December holiday sales period.

Customer and revenue · Revenue concentration in specific products or segments

Our owned and exclusive brand products represent approximately thirty percent of our overall merchandise sales and generally carry higher margins than equivalent national brand products. Our ability to source, develop, and market our owned and exclusive brands depends on many factors.

Credit and liquidity · Access to capital and financing

If we are unable to access the capital markets or obtain bank credit, our financial condition and results of operations could suffer. We are dependent on a stable, liquid, and well-functioning financial system to fund our operations and capital investments.

Natural and catastrophic events · Natural disasters and extreme weather

Uncharacteristic or significant weather conditions, including the physical impacts of a changing climate, and other catastrophic events can affect consumer shopping patterns, particularly in apparel and seasonal items, which could lead to lower sales or greater than expected markdowns and adversely affect our results of operations.

Geopolitical and trade · Trade policies tariffs and sanctions

U.S. trade policy is changing rapidly and remains subject to uncertainty. Any trade disputes or further changes in tax or trade policy, including the imposition of additional tariffs or duties on imported products or changes in tariff levels, between the U.S. and countries from which we source merchandise directly or indirectly through vendors could require us to take certain actions, including raising prices on products we sell and seeking alternative sources of supply.

Geopolitical and trade · International conflicts and tensions

Political or economic uncertainty or instability, trade policies, disputes, or sanctions, currency fluctuations, the outbreak of pandemics or other illnesses, labor shortages, labor unrest or strikes, transport capacity and costs, inflation, port security, weather conditions, natural disasters, geopolitical conflicts, social unrest, terrorist attacks, armed conflicts, or other events that have affected, and could in the future affect, foreign trade are beyond our control.

Economic and market conditions · Economic recession and downturns

Our earnings depend on the state of macroeconomic conditions and consumer confidence and spending in the U.S. Nearly all of our sales are in the U.S., making our results highly dependent on the health of the U.S. economy and U.S. consumer behavior, confidence, and spending, which can be affected by a variety of factors, including inflation, interest rates, housing prices, unemployment rates.

Natural and catastrophic events · Terrorism and security threats

Acts of violence and other crimes, including active shooter situations, at or around our stores, distribution centers, or other facilities have, and may in the future, negatively impact the safety and security of our workforce and guests, damage our facilities, or harm our reputation.

Information management · Technology vendor dependence

We rely on third parties to support our business operations, including portions of our technology infrastructure (including certain generative artificial intelligence services), digital platforms, replenishment and fulfillment operations, store and supply chain infrastructure, delivery services.

Digital transformation and innovation · Artificial intelligence and automation

For example, we may be unable to match or surpass the advances in technologies and capabilities (including artificial intelligence) that our competitors implement for consumer-facing platforms or for internal operations, which could adversely affect our competitive position. Furthermore, generative artificial intelligence presents emerging ethical issues and could negatively impact our guests and team members.