The company continued to emphasize newness and differentiation across our assortment, including a steady flow of exclusive products and designer collaborations, such as 2,000 new wellness products introduced in January of 2025-600 of which were exclusive to Target and our exclusive official 'Taylor Swift | The Eras Tour Book'.

Launched or expanded several owned brands, including dealworthy, our new low-price line of essentials and Auden, Cat & Jack, Gigglescape, and up&up, with 11 of our owned brands exceeding $1 billion in annual sales.

Invested in new artificial intelligence (AI) technology, including modernized Al-powered inventory management systems and Store Companion, an Al-powered chatbot designed to make team members' jobs easier and enhance the shopping experience.

Launched our reimagined Target Circle loyalty program to deliver an easier and more personalized shopping and saving experience, including a free-to-join option and a paid membership for same-day delivery, as well as the integration of Target Circle Card (formerly RedCard).

Continued to enhance our Roundel digital media products and services, including through a new self-service buying tool, Roundel Media Studio, and experiential events integrated with marketing activities.

Fulfilled over 65 percent of our digital sales through our same-day fulfillment options (Order Pickup, Drive Up, and Same Day Delivery), which grew 7.7 percent compared to 2023, including double-digit percentage growth in both Same Day Delivery and Drive Up.

If we are unable to positively differentiate ourselves from our competitors, our results of operations and financial condition could be adversely affected. We attempt to differentiate our guest experience through a careful combination of price, merchandise assortment, store environment, convenience, guest service, loyalty programs, advertising, and marketing.

If we do not anticipate consumer demand 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.

Our continued success is dependent on positive perceptions of Target which, if eroded, could adversely affect our business and our relationships, including with our guests, team members, and vendors. We believe that one of the reasons our shareholders, guests, team members, and vendors choose Target is the positive reputation we have built over many years for serving those constituencies and the communities in which we operate.

If we are unable to successfully develop, source, and market our owned and exclusive brand products, our results of operations could be adversely affected. Our owned and exclusive brand products represent approximately one third of our overall merchandise sales and generally carry higher margins than equivalent national brand products.

If we are unable to protect against inventory shrink, our results of operations and financial condition could be adversely affected. Our business depends on our ability to effectively manage our inventory. We have historically experienced loss of inventory (also called shrink) due to damage, theft (including from organized retail crime), and other causes.

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.

If our capital investments do not achieve appropriate returns or our efficiency efforts are not successful, our competitive position, results of operations, and financial condition could be adversely affected. 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.

A significant disruption to our technology systems and our failure to adequately maintain and update those systems could adversely affect our operations and negatively affect our guests. We rely extensively on technology systems throughout our business, including systems that we develop internally.

Changes in our relationships with our vendors or other companies, changes in tax or trade policy, interruptions in our operations or supply chain, and increased commodity or supply chain costs could adversely affect our reputation and results of operations. We are dependent on our vendors, independent contractors, and other third parties.

If our efforts to maintain information security, cybersecurity, and data privacy are unsuccessful or if we are unable to meet increasingly demanding regulatory requirements, our reputation, results of operations, and financial condition could be adversely affected. As part of our business, we receive and store information about our guests, team members, vendors, and other third parties.

Capital expenditures in 2024 reflect investments in our strategic initiatives, including investments in both stores and in our supply chain, enhancing our capabilities and guest experience across stores and digital channels. The decrease in capital expenditures in 2024 compared with 2023 primarily reflects a slowdown in store remodel activities.

We declared dividends totaling $2.1 billion ($4.46 per share) in 2024 and $2.1 billion ($4.38 per share) in 2023, a per share increase of 1.8 percent. We have paid dividends every quarter since our 1967 initial public offering, and it is our intent to continue to do so in the future.

During 2024, we deployed $1.0 billion to repurchase shares. We did not repurchase any shares during 2023. See Part II, Item 5, Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities of this Annual Report on Form 10-K and Note 20 to the Financial Statements for more information.

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 laws and regulations.

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.

Uncharacteristic or significant weather conditions or natural disasters, the impacts of a changing climate, and other catastrophic events could adversely affect our results of operations and financial condition. Uncharacteristic or significant weather conditions, including the physical impacts of a changing climate, and other catastrophic events can affect consumer shopping patterns.

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. With over 400,000 team members, our workforce costs represent our largest operating expense.