Target
TGT
#503
Rank
$47.92 B
Marketcap
$105.47
Share price
2.56%
Change (1 day)
-21.14%
Change (1 year)

Target - 10-Q quarterly report FY


Text size:
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

----------------------

FORM 10-Q


QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended May 2, 1998
------------

Commission file number 1-6049
------

Dayton Hudson Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)


Minnesota 41-0215170
- --------------------------------------------------------------------------------
(State of incorporation or organization) (I.R.S. Employer Identification No.)


777 Nicollet Mall Minneapolis, Minnesota 55402-2055
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)


Registrant's telephone number, including area code (612) 370-6948
- --------------------------------------------------------------------------------


None
- --------
(Former name, former address and former fiscal year, if changed since last
report.)


The registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and
(2) has been subject to such filing requirements for the past 90 days.

The number of shares outstanding of common stock as of May 2, 1998 was
439,069,095.
DAYTON HUDSON CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
NO.
<S> <C>
PART I FINANCIAL INFORMATION:

ITEM 1 - FINANCIAL STATEMENTS

Condensed Consolidated Results of Operations for the Three Months
and Twelve Months ended May 2, 1998 and May 3, 1997 1

Condensed Consolidated Statements of Financial Position at May 2,
1998, January 31, 1998 and May 3, 1997 2

Condensed Consolidated Statements of Cash Flows for the Three
Months ended May 2, 1998 and May 3, 1997 3

Notes to Condensed Consolidated Financial Statements 4-6

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND
FINANCIAL CONDITION 7-11

PART II OTHER INFORMATION:

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 13

Signatures 14

Exhibit Index 15
</TABLE>
PART I.  FINANCIAL INFORMATION
CONDENSED CONSOLIDATED Dayton Hudson Corporation
RESULTS OF OPERATIONS and Subsidiaries

<TABLE>
<CAPTION>

(Millions of Dollars, Except Per Share Data) Three Months Ended Twelve Months Ended
- ------------------------------------------------------------------------------------------------------------------------
MAY 2, May 3, MAY 2, May 3,
(Unaudited) 1998 1997 1998 1997
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES $6,468 $5,889 $28,336 $25,879
COSTS AND EXPENSES:
Cost of retail sales, buying and occupancy 4,727 4,253 20,794 18,932
Selling, publicity and administrative 1,074 1,034 4,571 4,340
Depreciation and amortization 184 170 705 663
Interest expense, net 96 107 408 440
Taxes other than income taxes 122 117 475 450
Real estate repositioning charge - - - 134
- ------------------------------------------------------------------------------------------------------------------------
Total Costs and Expenses 6,203 5,681 26,953 24,959
- ------------------------------------------------------------------------------------------------------------------------
EARNINGS BEFORE INCOME TAXES AND EXTRAORDINARY CHARGES 265 208 1,383 920
Provision for Income Taxes 105 82 546 363
- ------------------------------------------------------------------------------------------------------------------------
NET EARNINGS BEFORE EXTRAORDINARY CHARGES 160 126 837 557
Extraordinary Charges from Purchase and Redemption of
Debt, Net of Tax 2 21 32 31
- ------------------------------------------------------------------------------------------------------------------------
NET EARNINGS $ 158 $ 105 $ 805 $ 526
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
BASIC EARNINGS PER SHARE:
Earnings Before Extraordinary Charges $ .36 $ .28 $ 1.87 $ 1.24
Extraordinary Charges .01 .05 .08 .07
- ------------------------------------------------------------------------------------------------------------------------
BASIC EARNINGS PER SHARE $ .35 $ .23 $ 1.79 $ 1.17
- ------------------------------------------------------------------------------------------------------------------------
DILUTED EARNINGS PER SHARE:
Earnings Before Extraordinary Charges $ .34 $ .27 $ 1.77 $ 1.18
Extraordinary Charges .01 .05 .07 .07
- ------------------------------------------------------------------------------------------------------------------------
DILUTED EARNINGS PER SHARE $ .33 $ .22 $ 1.70 $ 1.11
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
DIVIDENDS DECLARED PER COMMON SHARE $ .09 $ .08 $ .34 $ .32
AVERAGE COMMON SHARES OUTSTANDING (Millions):
Basic 438.6 434.8 437.1 433.9
Diluted 466.6 462.4 464.7 461.6
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying Notes to Condensed Consolidated Financial Statements.


1
CONDENSED CONSOLIDATED STATEMENTS                      Dayton Hudson Corporation
OF FINANCIAL POSITION and Subsidiaries

<TABLE>
<CAPTION>


MAY 2, January 31, May 3,
(Millions of Dollars) 1998 1998* 1997
- -----------------------------------------------------------------------------------------------
ASSETS (UNAUDITED) (Unaudited)
<S> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 249 $ 211 $ 257
Retained securitized receivables 1,351 1,555 1,547
Merchandise inventories 3,569 3,251 3,330
Other 623 544 391
- -----------------------------------------------------------------------------------------------
Total Current Assets 5,792 5,561 5,525
PROPERTY AND EQUIPMENT 11,847 11,513 10,593
Accumulated depreciation (3,527) (3,388) (3,042)
------ ------ ------
Property and Equipment, net 8,320 8,125 7,551
OTHER 608 505 491
- -----------------------------------------------------------------------------------------------
TOTAL ASSETS $14,720 $14,191 $13,567
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES
Accounts payable $ 2,723 $ 2,727 $ 2,356
Current portion of long-term debt and notes payable 538 273 338
Other 1,347 1,556 1,329
- -----------------------------------------------------------------------------------------------
Total Current Liabilities 4,608 4,556 4,023
LONG-TERM DEBT 4,760 4,425 5,000
DEFERRED INCOME TAXES AND OTHER 731 720 623
CONVERTIBLE PREFERRED STOCK, NET 24 30 44
SHAREHOLDERS' INVESTMENT 4,597 4,460 3,877
- -----------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT $14,720 $14,191 $13,567
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------

COMMON SHARES OUTSTANDING (Millions) 439.1 437.8 435.3
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>


* The January 31, 1998 Consolidated Statement of Financial Position is
condensed from the audited financial statement.

See accompanying Notes to Condensed Consolidated Financial Statements.


2
CONDENSED CONSOLIDATED                                 Dayton Hudson Corporation
STATEMENTS OF CASH FLOWS and Subsidiaries

<TABLE>
<CAPTION>

(Millions of Dollars) Three Months Ended
- ------------------------------------------------------------------------------
MAY 2, May 3,
(Unaudited) 1998 1997
- ------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings before extraordinary charges $160 $126
Reconciliation to cash flow:
Depreciation and amortization 184 169
Deferred tax provision 44 (28)
Other non-cash items affecting earnings 11 (3)
Changes in operating accounts providing/(requiring) cash:
Retained securitized receivables 250 173
Merchandise inventories (291) (300)
Accounts payable (91) (188)
Accrued liabilities (120) 1
Income taxes payable (102) (9)
Other (118) 31
- ------------------------------------------------------------------------------
Cash Flow Required by Operations (73) (28)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

INVESTING ACTIVITIES
Expenditures for property and equipment (378) (254)
Proceeds from disposals of property and equipment 22 102
Acquisition of subsidiaries, net (100) -
- ------------------------------------------------------------------------------
Cash Flow Required for Investing Activities (456) (152)
- ------------------------------------------------------------------------------
Net Financing Requirements (529) (180)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
FINANCING ACTIVITIES
Increase in notes payable, net 682 319
Reductions of long-term debt (85) (209)
Sale of subsidiary preferred stock - 160
Dividends paid (45) (40)
Other 15 6
- ------------------------------------------------------------------------------
Cash Flow Provided by Financing Activities 567 236
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Net Increase in Cash and Cash Equivalents 38 56
Cash and Cash Equivalents at Beginning of Period 211 201
- ------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $249 $257
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>

Amounts in this statement are presented on a cash basis and therefore may differ
from those shown elsewhere in this 10-Q report. Cash paid for income taxes was
$163 million and $133 million during the first three months of 1998 and 1997,
respectively. Cash paid for interest (including interest capitalized) in the
first three months of 1998 and 1997 was $76 million and $89 million,
respectively.

See accompanying Notes to Condensed Consolidated Financial Statements.


3
NOTES TO CONDENSED CONSOLIDATED                        Dayton Hudson Corporation
FINANCIAL STATEMENTS and Subsidiaries

ACCOUNTING POLICIES

The accompanying condensed consolidated financial statements should be read in
conjunction with the financial statement disclosures contained in our 1997
Annual Shareholders' Report throughout pages 25-36. As explained on page 35 of
the Annual Report, the same accounting policies are followed in preparing
quarterly financial data as are followed in preparing annual data. In the
opinion of management, all adjustments necessary for a fair presentation of
quarterly operating results are reflected herein and are of a normal, recurring
nature.

Due to the seasonal nature of the retail industry, quarterly earnings are not
necessarily indicative of the results that may be expected for the full fiscal
year.

INTERNAL USE SOFTWARE

We adopted Statement of Position (SOP) 98-1 "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use" in first quarter 1998.
The adoption resulted in expense savings which increased first quarter pre-tax
earnings by approximately $15 million ($.02 per share), which partially offset
our other systems expenses.

PER SHARE DATA

References to earnings per share relate to diluted earnings per share.

<TABLE>
<CAPTION>


Basic EPS Diluted EPS
- ----------------------------------------------------------------------------------------------------------------------------------
Three Months Twelve Months Three Months Twelve Months
Ended Ended Ended Ended
- ----------------------------------------------------------------------------------------------------------------------------------
MAY 2, May 3, MAY 2, May 3, MAY 2, May 3 MAY 2 May 3,
1998 1997 1998 1997 1998 1997, 1998, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net earnings* $ 160 $ 126 $ 837 $ 557 $ 160 $ 126 $ 837 $ 557
Less: ESOP net earnings adjustment (5) (5) (20) (20) (3) (3) (13) (13)
- ----------------------------------------------------------------------------------------------------------------------------------
Adjusted net earnings* $ 155 $ 121 $ 817 $ 537 $ 157 $ 123 $ 824 $ 544
- ----------------------------------------------------------------------------------------------------------------------------------
Weighted average common shares
outstanding 438.6 434.8 437.1 433.9 438.6 434.8 437.1 433.9
Performance shares - - - - 1.0 1.5 1.2 1.6
Stock options - - - - 5.5 3.3 4.4 2.8
Assumed conversion of ESOP
preferred shares - - - - 21.5 22.8 22.0 23.3
- ----------------------------------------------------------------------------------------------------------------------------------
Total common equivalent shares
outstanding 438.6 434.8 437.1 433.9 466.6 462.4 464.7 461.6
- ----------------------------------------------------------------------------------------------------------------------------------

Earnings Per Share* $ .36 $ .28 $ 1.87 $ 1.24 $ .34 $ .27 $ 1.77 $ 1.18
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

*Before extraordinary charges


4
LONG-TERM DEBT

During the first quarter, we repurchased approximately $12 million of
high-coupon debt for $15 million, resulting in an after-tax extraordinary charge
of $2 million ($.01 per share). The replacement of this debt with lower interest
rate financing is expected to result in future interest expense savings. The
debt repurchased had an average interest rate of 10 percent and an average
remaining life of approximately 12 years.

ACQUISITIONS

Effective February 1, 1998, we acquired The Associated Merchandising
Corporation, an international sourcing company for our three operating divisions
and other retailers. Effective April 15, 1998, we acquired a direct marketing
firm, Rivertown Trading Company. Both subsidiaries are included in the
consolidated financial statements. Their revenues and operating results are
included in "Corporate and other" and were immaterial in the quarter.

SEGMENT DISCLOSURES (millions of dollars)

Revenues by segment were as follows:

<TABLE>
<CAPTION>

Three Months Ended Twelve Months Ended
---------------------- ----------------------
MAY 2, May 3, MAY 2, May 3,
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Target $4,807 $4,254 $20,921 $18,384
Mervyn's 890 946 4,171 4,348
DSD 726 689 3,199 3,147
Corporate and other 45 - 45 -
------- ------- ------- -------
Total revenues $6,468 $5,889 $28,336 $25,879
------- ------- ------- -------
------- ------- ------- -------
</TABLE>

Pre-tax segment profit and reconciliation to pre-tax earnings were as follows:

<TABLE>
<CAPTION>

Three Months Ended Twelve Months Ended
---------------------- ----------------------
MAY 2, May 3, MAY 2, May 3,
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Target $ 302 $ 252 $1,337 $1,166
Mervyn's 43 50 273 280
DSD 41 35 246 156
------- ------- ------- -------
Total Pre-tax Segment Profit 386 337 1,856 1,602
LIFO provision - - (6) (9)
Securitization adjustments:
Interest equivalent (12) (6) (39) (25)
SFAS 125 gain - 6 39 6
Interest expense (96) (107) (408) (440)
Real estate repositioning charge - - - (134)
Corporate and other (13) (22) (59) (80)
------- ------- ------- -------
Earnings before income taxes
and extraordinary charge $ 265 $ 208 $1,383 $ 920
------- ------- ------- -------
------- ------- ------- -------
</TABLE>



5
SUBSEQUENT EVENT

On May 28, 1998 we issued $200 million of long term debt maturing in 2010, and
puttable in June 2000. In addition, we sold to a third party the right, in June
2000, to call and remarket these securities to their final maturity.


6
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
FIRST QUARTER 1998

ANALYSIS OF OPERATIONS

First quarter 1998 net earnings were $158 million, or $.33 per share, compared
with $105 million, or $.22 per share, for the same period last year. First
quarter 1998 net earnings included an extraordinary charge, net of tax, related
to the early extinguishment of debt of $2 million ($.01 per share). First
quarter 1997 net earnings included an extraordinary charge, net of tax, related
to the early extinguishment of debt of $21 million ($.05 per share) and a
pre-tax securitization gain of $6 million ($.01 per share). Excluding all
unusual items, first quarter earnings per share were $.34 in 1998 and $.26 in
1997. The improvement in first quarter net earnings was due to strong sales and
profit performance at Target and DSD.

REVENUES AND COMPARABLE-STORE SALES

Total revenues increased 9.8 percent to $6,468 million compared with $5,889
million for the same period a year ago. Total comparable-store sales (sales from
stores open longer than one year) increased 5.2 percent. Year-over-year change
in revenues and comparable-store sales by business segment was as follows :

<TABLE>
<CAPTION>

Three Months Percentage Change
-------------------------------------
Comparable-Store
Revenues Sales
------------ ------------------
<S> <C> <C>
Target 13.0% 5.9%
Mervyn's (5.9) 0.4
DSD 5.4 6.9
------------ ------------------
Total 9.8% 5.2%
------------ ------------------
------------ ------------------
</TABLE>


Target's revenue results reflect strong new and comparable-store sales growth,
while Mervyn's total revenue decrease reflects stores closed in 1997. DSD's
revenue and comparable-store sales results reflect continued improvement in
merchandise content and store productivity.


7
PRE-TAX SEGMENT PROFIT

Pre-tax segment profit is first-in, first-out (FIFO) earnings from operations
before securitization effects, interest, corporate and other, and unusual items.
Our first quarter pre-tax segment profit increased 15 percent to $386 million
compared with $337 million for the same period a year ago. Year-over-year
pre-tax segment profit growth was as follows:

<TABLE>
<CAPTION>

Three Months Twelve Months
Percentage Change Percentage Change
----------------- -----------------
<S> <C> <C>
Target 20% 15%
Mervyn's (13) (4)
DSD 14 56
----- -----
Total Pre-tax Segment Profit 15% 15%
----- -----
----- -----
</TABLE>

TARGET'S first quarter pre-tax profit increased 20 percent to $302 million
compared with $252 million for the same period a year ago, reflecting
comparable-store sales growth of 5.9 percent, and operating expense rate
improvement. The operating expense rate favorability reflects strong sales
leveraging and benefits from Target's multi-year expense reduction effort. In
1998, Target's gross margin rate is expected to be essentially even with 1997.
Expense reduction will remain a priority; however, ongoing wage rate pressures
within our competitive markets may challenge our ability to fully realize our
planned savings of $60 to $70 million.

MERVYN'S first quarter pre-tax profit decreased 13 percent to $43 million
compared with $50 million for the same period a year ago, with comparable
store-sales growth of 0.4 percent. The gross margin rate declined primarily due
to higher markdowns while the operating expense rate improved modestly. Despite
lost revenue and profits from the stores closed in 1997, Mervyn's is expected to
achieve modest improvement in its 1998 profit margin rate through low
single-digit comparable-store sales increases. The operating expense rate is
expected to be essentially even with 1997.

DSD'S first quarter pre-tax profit increased 14 percent to $41 million compared
with $35 million for the same period a year ago, reflecting comparable-store
sales growth of 6.9 percent and operating expense rate improvement, primarily
due to increased store productivity. The gross margin rate was essentially even
with the prior year. In 1998, we expect continued growth in DSD's pre-tax profit
for the year, reflecting low-to-mid single digit comparable-store sales, and a
modest increase in the gross margin rate. We also expect DSD's operating expense
rate to be essentially unchanged from 1997.


8
OTHER PERFORMANCE FACTORS

Our proprietary guest credit programs strategically support our core retail
operations and are an integral component of each business segment. As such,
credit contribution is reflected in each business segment's pre-tax profit. Net
of all expenses, including bad debt expense, pre-tax contribution from guest
credit increased over the prior year principally due to continued growth of the
Target guest card. We expect to grow guest credit's contribution in 1998 by
acquiring new accounts, refining guest loyalty programs and controlling bad debt
expense.

The last-in first-out (LIFO) provision, included in cost of retail sales, was
zero for both first quarter 1998 and 1997. The cumulative LIFO provision was $92
million at May 2, 1998 and January 31, 1998, and $86 million at May 3, 1997.

Our Consolidated Results of Operations include reductions of finance charge
revenues and bad debt expense, the net effect of which reduced earnings by $12
and $6 million during the first quarter of 1998 and 1997, respectively. These
amounts represent payments to holders of our sold securitized receivables and
are included in our pre-tax earnings reconciliation on page 5 as "interest
equivalent". Our current $800 million of sold securitized receivables will
result in approximately $12 million of interest equivalent in each quarter they
remain outstanding. For analytical purposes, management includes the interest
equivalent discussed above in interest expense.

In first quarter 1998, combined interest expense and interest equivalent was $5
million lower than 1997 due to a lower average portfolio rate. In first quarter
1997, combined interest expense and interest equivalent was $2 million lower
than 1996 due to lower average funded balances. For the balance of the year,
combined interest expense and interest equivalent is expected to be similar to,
or slightly above, 1997 as continued portfolio rate favorability is expected to
substantially offset the effect of somewhat higher average funded balances.

The effective income tax rate was 39.5 percent in both 1998 and 1997.


9
ANALYSIS OF FINANCIAL CONDITION

Our financial condition remains strong. We continue to fund the growth in our
business through a combination of retained earnings, debt, and sold securitized
receivables. The ratio of debt to total capitalization attributable to our
retail operations was 49 percent at the end of first quarter 1998, compared with
52 percent a year ago and 45 percent at year end. Due to the seasonality of
our business, quarterly comparisons will fluctuate, but we expect our debt ratio
to continue to be below last year for the balance of 1998.

At May 2, 1998, working capital was $1,184 million, down 21 percent compared
with a year ago. Retained securitized receivables declined 13 percent from year
end, reflecting a typical reduction from seasonally high levels. Retained
securitized receivables also decreased 13 percent from first quarter last year,
reflecting $400 million of securitized receivables sold in third quarter 1997.
Compared with last year, merchandise inventories increased approximately $239
million, or 7 percent, as a result of new store growth at Target, partially
offset by good inventory control at all divisions. The inventory growth was
more than fully funded by a $367 million, or 16 percent, increase in accounts
payable.

Capital expenditures for the first three months of 1998 were $378 million,
compared with $254 million for the same period a year ago. Approximately 86
percent of the current year expenditures were made by Target, 8 percent by
Mervyn's and 6 percent by DSD.

STORE DATA

During the quarter, we opened 11 net new Target stores. At May 2, 1998, Target
operated 807 stores in 39 states, Mervyn's operated 269 stores in 14 states and
DSD operated 65 stores in nine states.

Retail square footage was as follows:

<TABLE>
<CAPTION>

(In thousands, reflects total square feet, MAY 2, January 31, May 3,
less office, warehouse and vacant space) 1998 1998 1997
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Target 88,795 87,158 81,353
Mervyn's 21,810 21,810 22,424
DSD 14,090 14,090 13,995
- ----------------------------------------------------------------------------------
Total Retail Square Footage 124,695 123,058 117,772
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>


10
FORWARD-LOOKING STATEMENTS

The preceding Management's Discussion and Analysis contains forward-looking
statements regarding the Company's performance, liquidity and the adequacy of
its capital resources. Those statements are based on management's current
assumptions and expectations and are subject to certain risks and uncertainties
that could cause actual results to differ materially from those projected. As a
result, the Company cautions that the forward-looking statements are qualified
by the risks of increased competition, shifting consumer demand, changing
consumer credit markets and general economic conditions, hiring and retaining
effective team members, sourcing merchandise from domestic and international
vendors, preparing for the impact of year 2000, and other risks and
uncertainties. As a result, while management believes that there is a
reasonable basis for the forward-looking statements, undue reliance should not
be placed on those statements. Readers are encouraged to review Exhibit (99)C.
attached to the Company's Form 10-K Report for the year ended January 31, 1998
which contains additional important factors that may cause actual results to
differ materially from those predicted in the forward-looking statements.


11
PART II. OTHER INFORMATION


ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


a) The Company held its Annual Shareholders' Meeting on May 20, 1998.

c) (1). The shareholders voted for four director nominees for
three-year terms. The vote was as follows:

<TABLE>
<CAPTION>
Name of Candidate For Withheld
----------------- ----------- ---------
<S> <C> <C>
Michele J. Hooper 199,950,008 2,166,767
Susan A. McLaughlin 199,972,652 2,144,123
Anne M. Mulcahy 199,953,234 2,163,541
Stephen W. Sanger 199,971,730 2,145,045
</TABLE>

There were no abstentions and no broker non-votes.

(2). The shareholders voted to approve the appointment of Ernst &
Young LLP as independent auditors of the Corporation for
fiscal year 1998. The vote was 201,491,513 for, 236,586
against and 388,676 abstentions. There were no broker
non-votes.


12
ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

a) Exhibits

(2). Not applicable

(3)A. Restated Articles of Incorporation (as amended April 30,
1998).

(4). Instruments defining the rights of security holders,
including indentures. Registrant agrees to furnish the
Commission on request copies of instruments with respect to
long-term debt.

(11). Not applicable

(12). Statements re Computations of Ratios

(15). Not applicable

(18). Not applicable

(19). Not applicable

(22). Not applicable

(23). Not applicable

(24). Not applicable

(27). Financial Data Schedule

b) Reports on Form 8-K. Registrant did not file any reports on Form 8-K
during the quarter ended May 2, 1998.



13
SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

DAYTON HUDSON CORPORATION
Registrant




Date: June 11, 1998 By /s/ Douglas A. Scovanner
--------------------------
Douglas A. Scovanner
Senior Vice President and
Chief Financial Officer



Date: June 11, 1998 By /s/ J.A. Bogdan
--------------------------
JoAnn Bogdan
Controller and
Chief Accounting Officer


14
EXHIBIT INDEX

<TABLE>
<CAPTION>
<S> <C>
(3)A. Restated Articles of Incorporation (as amended April 30, 1998)

(12). Statements re Computations of Ratios

(27). Financial Data Schedule
</TABLE>


15