Common-Size Income Statement
Target Corp., common-size consolidated income statement
Based on: 10-K (reporting date: 2025-02-01), 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01).
- Cost of Sales
- The cost of sales as a percentage of net sales showed relative stability around the low 70s from 2020 to 2022, specifically fluctuating between -70.24% and -70.73%. However, there was a marked increase to -75.43% in 2023, indicating higher relative costs, before improving to -72.46% in 2024 and -71.79% in 2025. This suggests a temporary spike in cost pressures in 2023 followed by partial recovery.
- Gross Margin
- Gross margin declined notably in 2023 to 24.57%, the lowest in the series, aligning with the peak in cost of sales during the same year. Before and after this dip, gross margin ranged around 29-29.7%, with a gradual recovery seen in 2024 (27.54%) and 2025 (28.21%). This highlights an erosion of profitability at the gross level in 2023 with some restoration thereafter.
- Selling, General and Administrative Expenses (SG&A)
- SG&A expenses as a percentage of net sales decreased from -20.78% in 2020 to a low of -18.63% in 2022, suggesting improved operational efficiency or cost control. From 2023 onwards, these expenses rose again, reaching -20.62% in 2025, nearly returning to 2020 levels. This indicates a reversal of prior improvements in overhead management in recent years.
- Depreciation and Amortization
- The proportion of depreciation and amortization expense steadily declined from -3.02% in 2020 to -2.19% in 2023, indicating lower relative non-cash charges or changes in asset base. However, a slight increase occurred in 2024 and 2025, reaching -2.37%, reflecting a mild upward trend in these expenses.
- Operating Income
- Operating income showed an improving trend through 2022, peaking at 8.44% of net sales, driven by favorable gross margins and controlled expenses. This was followed by a sharp decline to 3.53% in 2023, correlating with increased cost of sales and SG&A as well as compressed gross margin. A modest recovery occurred in 2024 and 2025 (5.31% and 5.22%), though levels remained below the earlier peak.
- Net Interest Expense
- Net interest expense as a percentage of net sales increased from -0.61% in 2020 to -1.04% in 2021 but then decreased and stabilized around -0.4% to -0.47% from 2022 to 2025. This suggests a spike in interest burden in 2021, followed by improved financing costs or reduced leverage in subsequent years.
- Net Other Income (Expense)
- Net other income/expense showed small fluctuations throughout the period, ranging narrowly between -0.02% and 0.36%, with a positive slight trend overall. This indicates minor and relatively stable contributions from non-operating activities.
- Earnings Before Income Taxes
- Earnings from continuing operations before income taxes mirrored operating income trends with a peak at 8.4% in 2022, subsequent drop to 3.13% in 2023, and partial rebound to approximately 4.9% in 2024 and 2025. This reflects the same pressures on profitability observed at the operating level.
- Provision for Income Taxes
- The tax provision percentage of net sales rose from -1.18% in 2020 to a high of -1.85% in 2022, before decreasing sharply to -0.58% in 2023 and returning to around -1.1% thereafter. This pattern suggests variability in tax expense which may be influenced by changes in taxable income or tax strategies.
- Net Earnings
- Net earnings from continuing operations followed the positive trend through 2022 with a peak of 6.55%, followed by a significant decline to 2.55% in 2023, and partial recovery to levels near 3.8% in both 2024 and 2025. Overall, net earnings indicate sensitivity to the cost and margin fluctuations observed during the period, with 2023 representing a clear low point in profitability.