TARGET CORPTGT
TARGET CORP Leases Disclosure
Leases
We lease certain retail stores, supply chain facilities, office space, land, and equipment. Leases with an initial term of 12 months or less are not recorded on the Consolidated Statements of Financial Position; we recognize lease expense for these leases on a straight-line basis over the lease term. We combine lease and nonlease components for new and reassessed leases.
Most leases include one or more options to renew, with renewal terms that can extend the lease term from to 50 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of leased assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. We use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.
Certain of our lease agreements require reimbursement of real estate taxes, common area maintenance, and insurance, as well as rental payments based on a percentage of retail sales over contractual levels, and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
We rent or sublease certain real estate to third parties. Our lease and sublease portfolio consists mainly of operating leases with CVS Pharmacy Inc. (CVS) for space within our stores.
Leases (millions) | Classification | January 31, 2026 | February 1, 2025 | ||||||||
| Assets | |||||||||||
| Operating | Operating Lease Assets | $ | 3,703 | $ | 3,763 | ||||||
| Finance | 1,399 | 1,557 | |||||||||
| Total leased assets | $ | 5,102 | $ | 5,320 | |||||||
| Liabilities | |||||||||||
| Current | |||||||||||
Operating | $ | 372 | $ | 353 | |||||||
Finance | 131 | 136 | |||||||||
| Noncurrent | |||||||||||
Operating | Noncurrent Operating Lease Liabilities | 3,462 | 3,582 | ||||||||
Finance | 1,982 | 2,025 | |||||||||
| Total lease liabilities | $ | 5,947 | $ | 6,096 | |||||||
(a)Finance lease assets are recorded net of accumulated amortization of $963 million and $857 million as of January 31, 2026, and February 1, 2025, respectively.
Lease Cost (millions) | Classification | 2025 | 2024 | 2023 | ||||||||||
Operating lease cost (a) | SG&A Expenses or Cost of Sales (b) | $ | 691 | $ | 641 | $ | 550 | |||||||
| Finance lease cost | ||||||||||||||
Amortization of leased assets | Depreciation and Amortization (b) | 152 | 146 | 136 | ||||||||||
Interest on lease liabilities | Net Interest Expense | 79 | 77 | 71 | ||||||||||
Sublease income (c) | Net Sales | (24) | (15) | (20) | ||||||||||
| Net lease cost | $ | 898 | $ | 849 | $ | 737 | ||||||||
(a)2025, 2024, and 2023 include $143 million, $132 million, and $115 million, respectively, of short-term and variable lease costs.
(b)Supply chain-related amounts are included in Cost of Sales.
(c)Sublease income excludes rental income from owned properties of $54 million, $48 million, and $49 million for 2025, 2024, and 2023, respectively, which is also included in Net Sales.
Maturity of Lease Liabilities | Operating | Finance | |||||||||
(millions) | Leases (a) | Leases (b) | Total | ||||||||
| 2026 | $ | 529 | $ | 209 | $ | 738 | |||||
| 2027 | 524 | 210 | 734 | ||||||||
| 2028 | 496 | 212 | 708 | ||||||||
| 2029 | 455 | 209 | 664 | ||||||||
| 2030 | 403 | 211 | 614 | ||||||||
| Thereafter | 2,642 | 1,758 | 4,400 | ||||||||
| Total lease payments | $ | 5,049 | $ | 2,809 | $ | 7,858 | |||||
| Less: Interest | 1,215 | 696 | |||||||||
Present value of lease liabilities | $ | 3,834 | $ | 2,113 | |||||||
(a)Operating lease payments include $719 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $39 million of legally binding minimum lease payments for leases signed but not yet commenced.
(b)Finance lease payments include $286 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $100 million of legally binding minimum lease payments for leases signed but not yet commenced.
| Lease Term and Discount Rate | January 31, 2026 | February 1, 2025 | ||||||
| Weighted average remaining lease term (years) | ||||||||
Operating leases | 11.8 | 11.8 | ||||||
Finance leases | 13.6 | 13.9 | ||||||
| Weighted average discount rate | ||||||||
Operating leases | 4.61 | % | 4.51 | % | ||||
Finance leases | 4.00 | % | 3.88 | % | ||||
Other Information (millions) | 2025 | 2024 | 2023 | ||||||||
| Cash paid for amounts included in the measurement of lease liabilities | |||||||||||
Operating cash flows from operating leases | $ | 529 | $ | 490 | $ | 479 | |||||
Operating cash flows from finance leases | 79 | 76 | 70 | ||||||||
Financing cash flows from finance leases | 142 | 139 | 147 | ||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 11, 2026 | Showing above |
| 2025 | Mar 12, 2025 | |
| 2024 | Mar 13, 2024 | |
| 2023 | Mar 8, 2023 | |
| 2022 | Mar 9, 2022 | |
| 2021 | Mar 10, 2021 | |
| 2020 | Mar 11, 2020 | |
| 2019 | Mar 13, 2019 | |
| 2018 | Mar 14, 2018 | |
| 2017 | Mar 8, 2017 | |
| 2016 | Mar 11, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.