The retailer also announced in June that it is shedding its pharmacy business, with CVS acquiring it for about $1.9 billion. CVS will continue to operate the pharmacies and clinics within Target locations.
Mulligan called the drugstore operator a great partner that will also help drive traffic into the stores.
"This is an opportunity for us to provide a better service to our guests and bring more of them in our stores so they can be delighted by the products that we offer."
Meanwhile, Mulligan brushed aside any talk of becoming an heir apparent to CEO Brian Cornell now that he'll be overseeing the stores, supply chain and properties when he becomes COO on Sept. 1.
"The first order of business is concentrating on what I've got in front of me. We're excited about bringing the core of our operations together," he said. "I'm not worried about Brian leaving any time soon. He's doing a great job, and we're thrilled he's here."
—CNBC's Matthew Belvedere and Reuters contributed to this report.