Target Corporation First Quarter Earnings Per Share $0.75

Business Wire, May 23, 2007

MINNEAPOLIS -- Target Corporation today reported net earnings for the first quarter ended May 5, 2007 of $651 million, or 75 cents per share, compared with $554 million, or 63 cents per share in the first quarter ended April 29, 2006, representing a 19.6 percent increase in earnings per share. All earnings per share figures refer to diluted earnings per share.

"We are pleased with the strength of our first quarter results in both our core retail and credit card operations," said Bob Ulrich, chairman and chief executive officer of Target Corporation. "Our overall performance reinforces our confidence in our ability to continue to generate profitable market share growth for the full year 2007 and many years to come."

Total revenues in the first quarter increased 9.2 percent to $14.041 billion from $12.863 billion in 2006, reflecting a 4.3 percent increase in comparable-store sales combined with the contribution from new store expansion and 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 and income taxes (EBIT) in the first quarter of 2007 increased 18.0 percent, to $1.200 billion, compared with $1.017 billion in the first quarter a year ago. Key contributors to this EBIT growth included improvement in both gross margin and expense rate performance, combined with strong profit growth in our credit card operations. (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.)

Net interest expense for the quarter increased $5 million compared with first quarter 2006 primarily due to higher average debt balances, including the debt to fund the growth in our accounts receivable.

The contribution from the company's credit card operations to first quarter earnings before taxes (EBT), net of the allocated interest expense to fund our average accounts receivable, was $143 million, an increase of $25 million, or 20.6 percent, from the same period in 2006. This favorability is primarily attributable to growth in net interest income.

Other Factors

The company's effective income tax rate for the first quarter was 38.8 percent in 2007 compared with 37.5 percent in 2006. For the full year, the effective income tax rate is still expected to increase modestly from last year's 38.0 percent rate.

Under a $5 billion share repurchase program that began in 2004, the company repurchased $549 million of its common stock during the first quarter of 2007, acquiring 9.2 million shares at an average price of $59.79 per share. Program-to-date, the company has acquired 80.2 million shares of its common stock at an average price per share of $49.84, reflecting a total investment of approximately $4.0 billion. The company expects to continue to execute this program primarily in open market transactions, subject to market conditions, and expects to complete the total program by year-end 2008, or sooner.

Miscellaneous

Target Corporation will webcast its first quarter earnings conference call at 9:30am CDT today. Investors and the media are invited to listen to the call through the company's website at www.target.com/investors (click on "webcasts"). A telephone replay of the call will be available beginning at approximately 11:30am CDT today through the end of business on May 24, 2007. The replay number is (800) 642-1687 (passcode: 7389070).

Forward-looking statements in this release should be read in conjunction with the cautionary statements in Exhibit (99)A to the company's 2006 Form 10-K.

Target Corporation's continuing operations include large, general merchandise discount stores, as well as an on-line business called Target.com. At quarter-end, the company operated 1,500 Target stores in 47 states.

Target Corporation news releases are available at www.target.com.

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