Target Corporation

“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, or if common carriers have difficulty providing capacity to meet demands for their services as has happened in the past, we could experience merchandise out-of-stocks, delays in shipping and receiving merchandise, and increased costs, which could adversely affect our reputation and results of operations.”

Annual report 2026A · The company itself

“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 (including by independent contractors via our Shipt subsidiary), guest contact centers, payment processing, digital advertising offerings, and extensions of credit for our Target-branded payment card program.”

Annual report 2026A · The company itself

“We have made, and expect to continue to make, significant investments in our technology infrastructure, digital platforms, and supply chain infrastructure.”

Annual report 2026A · The company itself

“RISK FACTORS Table of Contents Index to Financial Statements Consumers continue to migrate to digital channels and seek out multiple fulfillment options, which has affected the ways we attempt to differentiate ourselves. Since consumers can quickly comparison shop using digital tools, they may make decisions based solely on price or convenience, which could limit our ability to differentiate from our competitors.”

Annual report 2026A · The company itself

“Roundel, our in-house retail media network, offers advertising services on a variety of digital platforms primarily to our merchandise vendors, either directly or via advertising agencies, and Target Plus third-party sellers to promote their products and services.”

Annual report 2026A · The company itself

“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 (including by independent contractors via our Shipt subsidiary), guest contact centers, payment processing, digital advertising offerings, and extensions of credit for our Target-branded payment card program.”

Annual report 2026A · The company itself

“We have made, and expect to continue to make, significant investments in our technology infrastructure, digital platforms, and supply chain infrastructure.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“If our use of generative or agentic artificial intelligence becomes controversial or is ineffective, or if the outputs generated are inaccurate or controversial, our reputation and competitive position could be adversely affected.”

Annual report 2026A · The company itself

“Our ability to accurately predict consumer demand and adapt to changing consumer preferences depends on many factors, including obtaining accurate and relevant data on guest preferences, successfully implementing new technologies and capabilities (including artificial intelligence), emphasizing relevant merchandise categories, effectively managing our inventory levels, and implementing competitive and effective pricing and promotion strategies.”

Annual report 2026A · The company itself

“In addition, 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.”

Annual report 2026A · The company itself

“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 (including by independent contractors via our Shipt subsidiary), guest contact centers, payment processing, digital advertising offerings, and extensions of credit for our Target-branded payment card program.”

Annual report 2026A · The company itself

“Beginning in 2025, we began a company-wide business transformation effort to increase speed and agility across the organization in support of our strategic priorities. This initiative is intended to simplify cross-functional ways of working, increase role clarity, leverage technology (including artificial intelligence) and data to enhance decision-making, and reduce costs.”

Annual report 2026A · The company itself

“In addition, 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.”

Annual report 2026A · The company itself

“Beginning in 2025, we began a company-wide business transformation effort to increase speed and agility across the organization in support of our strategic priorities. This initiative is intended to simplify cross-functional ways of working, increase role clarity, leverage technology (including artificial intelligence) and data to enhance decision-making, and reduce costs.”

Annual report 2026A · The company itself

“Our business depends, in part, on our ability to remodel existing stores and build new stores in a manner that achieves appropriate returns on our capital investment. When building new stores, we compete with other retailers and businesses for suitable locations for our stores and available labor and materials.”

Annual report 2026A · The company itself

“In addition, owned brand products generally need longer lead times between order placement and product delivery and require us to take ownership of those products earlier in the supply chain. This requires accurate longer-term forecasting of consumer demand to effectively manage our operations, including for categories where consumer preferences may change rapidly, and exposes us to enhanced risks of supply chain disruptions and trade policy or tariff impacts.”

Annual report 2026A · The company itself

“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 from vendors in other countries. 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.”

Annual report 2026A · The company itself

“In particular, U.S. tariffs imposed or threatened to be imposed on several countries in 2025, including China, India, Vietnam and Bangladesh, and any retaliatory actions taken by such countries have resulted, and could continue to result, in us incurring substantial additional costs to procure a large portion of the merchandise we offer and impact the margin rate for certain products, raising prices on certain products, and starting new vendor relationships in other countries.”

Annual report 2026A · The company itself

“We also utilize a first sale declaration program, which is subject to rigorous requirements, to pay duties and tariffs to U.S. Customs for merchandise on the basis of the price paid by our vendors rather than the price paid by the importer of record. Our program may be subject to inquiries, investigations, or regulatory proceedings by U.S.”

Annual report 2026A · The company itself

“There have been, and may continue to be, changes in the legal or regulatory environment (including as a result of executive orders) affecting many areas related to our business, including merchandise costs and availability, customs and trade policy (including the impacts of our first sale declaration program), workforce availability, transport costs and capacity, information security, cybersecurity, and data privacy, supply chain requirements, product safety, product quality, payment methods, environmental, social, and governance matters (including sustainability, belonging, and diversity, equity, and inclusion), and climate and emissions disclosure.”

Annual report 2026A · The company itself

“RISK FACTORS Table of Contents Index to Financial Statements 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. These types of events have impacted us, and could impact us in the future, including by disrupting our supply of merchandise, increasing the price and limiting the availability of raw materials, increasing our costs, and adversely affecting our results of operations.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“In addition, we have significant operations in certain states where natural disasters (including hurricanes, tropical storms, floods, fires, and earthquakes) are more prevalent. Natural disasters in those states or in other areas where we operate has previously resulted, and could in the future result, in significant physical damage to, or closure of, one or more of our stores, distribution centers, facilities, or key vendors.”

Annual report 2026A · The company itself

“The physical effects of a changing climate, such as natural disasters, extreme weather conditions, drought or water scarcity, and rising sea levels, could adversely affect our results of operations, including by increasing our energy costs, disrupting our supply chain, negatively impacting our workforce, damaging our stores, distribution centers, and inventory, and threatening the habitability of the locations in which we operate.”

Annual report 2026A · The company itself

“RISK FACTORS Table of Contents Index to Financial Statements Consumers continue to migrate to digital channels and seek out multiple fulfillment options, which has affected the ways we attempt to differentiate ourselves. Since consumers can quickly comparison shop using digital tools, they may make decisions based solely on price or convenience, which could limit our ability to differentiate from our competitors.”

Annual report 2026A · The company itself

“If we do not anticipate consumer demand accurately and respond quickly to changing consumer preferences, our results of operations and financial condition could be adversely affected. A large part of our business is dependent on our ability to make trend-right decisions in a broad range of merchandise categories and offer those products at affordable prices.”

Annual report 2026A · The company itself

“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. In addition to the November and December holiday sales period, we also see increased sales activity during the back-to-school and back-to-college period and other seasonal moments throughout the year.”

Annual report 2026A · The company itself

“We have historically experienced loss of inventory (also called shrink) due to damage, theft (including from organized retail crime), and other causes.”

Annual report 2026A · The company itself

“RISK FACTORS Table of Contents Index to Financial Statements 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. These types of events have impacted us, and could impact us in the future, including by disrupting our supply of merchandise, increasing the price and limiting the availability of raw materials, increasing our costs, and adversely affecting our results of operations.”

Annual report 2026A · The company itself

“With over 400,000 team members, our workforce costs represent our largest operating expense, and our business is dependent on our ability to attract, train, and retain the appropriate mix of qualified team members, contractors, and temporary staffing.”

Annual report 2026A · The company itself

“We are dependent on a stable, liquid, and well-functioning financial system to fund our operations and capital investments. Our continued access to financial markets depends on multiple factors including the condition of debt capital markets, the condition of the banking sector, our operating performance, and our credit ratings.”

Annual report 2026A · The company itself

“Quantitative and Qualitative Disclosures About Market Risk As of January 31, 2026, our exposure to market risk was primarily from interest rate changes on our debt obligations and short-term investments.”

Annual report 2026A · The company itself

“Our ability to meet our changing labor needs while controlling our costs is subject to external factors such as labor laws and regulations, labor availability, unemployment levels, prevailing wage rates, benefit costs, changing demographics, immigration laws and regulations, and our reputation within the labor market.”

Annual report 2026A · The company itself

“There have been, and may continue to be, changes in the legal or regulatory environment (including as a result of executive orders) affecting many areas related to our business, including merchandise costs and availability, customs and trade policy (including the impacts of our first sale declaration program), workforce availability, transport costs and capacity, information security, cybersecurity, and data privacy, supply chain requirements, product safety, product quality, payment methods, environmental, social, and governance matters (including sustainability, belonging, and diversity, equity, and inclusion), and climate and emissions disclosure.”

Annual report 2026A · The company itself

“We and our vendors face attempts by others to gain unauthorized access to, sabotage, take control of, and corrupt, our information systems and data. As a result of these types of attempts, both we and our vendors have experienced information security, cybersecurity, and data privacy incidents.”

Annual report 2026A · The company itself

“In addition, prices of fuel and other commodities on which our supply chain depends are historically volatile and subject to fluctuations based on a variety of international and domestic factors. Rapid and significant changes in commodity prices, as have occurred in recent years, could further increase our costs and adversely affect our results of operations.”

Annual report 2026A · The company itself

“In addition to our U.S. operations, we perform additional administrative functions in Bangalore, India, and perform global sourcing operations from offices in 12 countries, predominantly in Asia and Central America, and any extended disruption of our operations in our different locations, whether due to labor difficulties or otherwise, could adversely affect our results of operations. In particular, we rely on our administrative functions in India for various business operations and any events that negatively impact the availability or effectiveness of our administrative functions in India, including political or economic uncertainty or instability, the outbreak of pandemics or other illnesses, labor shortages, labor unrest or strikes, weather conditions, natural disasters, geopolitical conflicts, social unrest, terrorist attacks, and armed conflicts, could adversely affect our results of operations and financial condition.”

Annual report 2026A · The company itself

“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, legal and regulatory actions, immigration policies and trends, household debt and wage levels, credit usage, and crime rates.”

Annual report 2026A · The company itself