Target’s (TGT) terrible quarter was even worse than the headlines initially suggested. Nine days after its earnings announcement— which resulted in a 25% plunge in the stock price— Target filed its most recent quarterly report which revealed a wider earnings miss than initially thought.

In the three months ended April 30, 2022, Target disclosed it had repurchased just $10 million in shares, a significant reduction from prior quarters. Instead of patting management on the back for not recklessly repurchasing shares ahead of an earnings announcement and guidance the company knew would miss consensus expectations, investors would be better served reading the footnotes.

Instead of exercising discipline, Target outsourced the majority of the buyback in the quarter.

In a footnote, Target revealed it spent $2 billion on accelerated share repurchase (ASR) to immediately retire 8.9 million shares in the quarter. Without the ASR, Target would have missed consensus EPS estimates by an even wider margin:

— The expectation was $3.07 per share
— Target reported an adjusted $2.19 per share
— Without the ASR, Target would have reported $2.13 per share

The real concern is management’s judgment. Under the ASR shares were repurchased at approximately $224.71. Under the smaller buyback Target executed itself, shares were repurchased at an average price of $208.60. As of this writing, Target repurchased shares at prices 26.7% and 21.1% higher, respectively, than where shares trade as of this writing.

The repurchases destroyed approximately $536.1 million in value, or approximately 53.1% of the quarter’s net income.

Management knew, or should have known, it would badly miss the quarter. To spend $2.1 billion repurchasing shares ahead of an earnings announcement sure to be met with selling deserves an explanation. Especially when you consider that Target dubbed the arrangement its “March 2022 ASR” suggesting the ASR was executed late in the quarter.

Since authorizing a $15 billion share repurchase program in August 2021, Target has repurchased approximately $4.8 billion in shares including the current ASR Target excludes from the tally. With $10.2 billion remaining under the repurchase authorization, Target’s authorization is the equivalent of approximately 10.7% of the company’s Enterprise Value.

Management may be forgiven if its estimate of Target’s intrinsic value is much higher and the buyback looks worse with hindsight in a bear market. But if intrinsic value isn’t driving repurchase decisions— and instead buybacks are done primarily to manage earnings or offset stock based compensation— executives should say so.

Without words, they may have done just that this quarter.