TGT - Earnings call transcript Q2 2025

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Target Corporation's Second Quarter Earnings Release Conference Call.

[Operator Instructions] As a reminder, this conference is being recorded, Wednesday, August 21, 2024. I would now like to turn the conference over to Mr. John Hulbert, Vice President, Investor Relations. sir. ahead, go Please

John Hulbert

and XXXX for earnings everyone, our us second quarter conference thank morning, joining you on Good call.

with quarter Officer; Rick On are the Financial third second Michael for Chief Officer. In Officer; Rick moments, and on our will Brian today priorities of Fiddelke, along Commercial Gomez, remainder the and Cornell, Chair a quarter Operating line and our Chief Chief with Officer and and and the Michael me provide outlook year. Brian, insights Chief few Executive performance, their

Following for will their call morning, on phone our remarks, by we'll open webcast. listening conference be a we're the lines via this who This question-and-answer comments session. others, to investors and joined

follow-up we release as non-GAAP statements our those questions. And any filed forward-looking Following uncertainties, this risks morning's make to reminder, earnings finally, press and remarks, we be the call, Michael your I a that and are in refer this financial that, including will on over XX-K. earnings second Investor including and thoughts quarter and these press all the for in to third release, Brian? subject morning described Also numbers to priorities in recently answer available this GAAP most the Reconciliations is the included directly share. quarter to beyond. comparable which Brian posted measures, for non-GAAP most number website. With morning's it of Relations are per I'll on adjusted to turn in our his and his

Brian Cornell

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to role this we were And Tu Chief and Compliance Officer. into of month pleased the of course, Legal Amy welcome

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digital has business our and of outstanding in that's showing an our done job results. through experience, enhancing Our team digital

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win Rick Our in started. With love getting just the they're I'll team his first retail, best guest-focused, earnings to they're they call. together, is and that, to welcome and

Richard Gomez

Thanks, you over and of Brian, forward be morning, to joining good time. everyone. I'm excited I'm to this looking call many today, meeting and

unpack our spend Before role, I of to we my results, priorities I'd sound sharing many some time into this second familiar. which as should quarter step like very

the of we reinforce affordability, Christina I've an to seasonal with Under built can Christina's how on worked also the X was additional are areas we've upon. want importance build newness, team I These to we foundation, focused which ease. on: leadership incredible relevance that govern over principles work. mission-critical. the the years, and First,

of end processes that and our then be original, also First, efficiencies with and work well end, listening our as finally, bringing for driving we'll innovative done. We'll together external consumers market inspiring We simplifying partners and to working guest-led, want be should goal what on we with including And creativity, how in gets of work relentless the be focus shouldn't this to are as do teams pursuit to how our unmistakably deliver by hard ideas we should them. to target. just consumer-obsessed. and consistently need streamlining

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our price strong by and Brian guests as newness offering low assortment, improving digits, for in our single-digit full And prices growth Wild our with strength This of evident both eager intimate apparel have the was and with the a discretionary value, recent compelling everyday Fable. digits our discretionary in are comps and contemporary only trends by mid-single at As designs in has in unbeatable pajama and guest particular Apparel, in performance on which most coming Apparel we're momentum demonstrate to the highlighted, our saw Auden, brand. Women's reaction latest out sleepwear young a items we the quarters like gate, in improvements led in low relaunch to $XX brand, online. high category year were that stores combination delivered and QX. brand, All been strong driven low in $XX owned in a our the slightly Comps in comfortable Motion results were growth quality bras comp sets. down and broad-based points, In and seeing seen trend of now, combined years. double loved build These our

relevance. much quarter launch Back-to-School high our checkout season with from items and X to gain fastest-growing single Polly meaningful growth now in item compared in trends flavors and travel growth more. Beauty plush sales meaningful improvement we Ice stand such percentage by in are early digits while on for remain brands grew seasonal Target by right of growth Care demand, QX, new indulgence on guests results softer people like seen and as than guests hundreds more across moments, kitchenware by which includes summer plan. of improvement and grilling love noodles on any with Sunscreen driven dogs, part with seasonal including market newness of the Sun While new stronger the brand, into a pressure, items flavor, major in expansion a a plush. was sales Figmint, And brand. Target-themed too. In combination accelerated out to driver, growth trend QX, including Home, driving our balanced affordable of around Gigglescape, in digits new Within celebrate under coolers. single comps Hardline looking low Pop comp brands Within Apparel, driven last the Fisher-Price other rise kid-sized the brand items with launched have in share options over was shoppers, home, a pool the like than for leaning more of consumers also little which toys into comp we've Home of the we've by include the has toys, new offerings young Home, In preschool case Food, still & affordable for Pocket like Target-branded with own areas some Recently, X,XXX points many newer continues question well Target kitchen bit been at puzzles are and highest and points also as of based year. our Bullseye high-performance of led in percentage category. Key sales looking in new little in QX summer category, trend an been outdoor toys, X familiar, items, with there offerings, its in continues in recent $X lanes, our markets, Minis been branded affordable categories first with Vacation. and for than items with This the the $XX quickly and With toys, Target over our so to in to Hardlines, celebrity a Melted versus our XXX up as the and up electronics selling help and we bubly's games, entertaining. exclusive be snacking, fun items. trending comp are

addition rethink also years. assortment and to we've for have strategies true seasonal ourselves tried In moments, pushed to been that

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showcasing and faster do provide our than well. grew Across consumers. Additionally, total we Baby own the categories, to Care enterprise, quality the to value and Essentials brands continue relevance,

us allows and our we positioned speed reduce to design unnecessary of market. remove to are which better process, sourcing in to capabilities, because fact, increase the and In steps industry-leading costs

our of particularly quarter, Circle Target advantage during Target Circle took enticing promotions, latest the Week. second Throughout members

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added also Brian million Target XXX As insights mentioned, than Circle, new ways. to Target those Circle members. of course, while in Circle as we Target mentioned, as business of Brian cardholders Circle Roundel in second continues adding a quarter, multiple our more to the hundreds we same more and members compared X invaluable of benefit which, thousands network, were of And gained Target personalized the able through Xx fuel offer to year ago. offers we our insights media Because

school Llama in Knowing off course, turning College $X.XX, is of of $X to believe popular end, to top in in style. of of this including of backpacks. hard it's the like them supply peak coming our XX this plenty $XX, many store Mondo time of our consumers, for and While continuation year summer already during affordability Back-to-School we're front the an most More is are their crayons us and XX% This, shop with with seasons, school items which start reached for $X.XX for that we success offering to under markets items than the quickly have QX. fall. a that focus half our and to and is mind year, notebooks for guests frame, priced together begins just

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fall to celebrate and the more season continues, introducing across autumn. assortment we'll newness things As all our be more

are for with from fabrications favorite spirit this assortment, we're new and just on-trend with to including a team game school category, leaning into for our of core match we items anchored all the colors, And disruptive colors best. mix feel way, offering some Motion, fall college day big out head-to-toe sizes style. In value the categories, showing to neutrals and options apparel year, bodies wardrobe In showcasing which we're All performance your of women's a and $XX. women's fashion their range in new and and items legging in in in show assortments silhouettes our includes In first-ever new make our look destination our

we know are their pumpkin fashion, fall Beyond and apple for consumers favorites. eager spice

while introducing back we're fall ones and So some bring to trending these flavors, new as excited well.

will sweet than ice flavored and more Holes seem XXX excitement items, may away, surely offer celebrations. season cookies, consumer will brand & find items become and too. And research social more favorites year, ranging a Pecan XXX Pie Gather our and than from ghoul, lot owned of and some be year's turkey to inspired national assortment sales all early while cream favorites Halloween pumpkin suggest of Good Halloween with potato new was stuffing brand will by food new fall far videos and there's savory, media X-foot our to this all Last chips. Lewis. Donut From ablaze Jack-o-Lantern Our their guests what around Pumpkin new sandwich

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the we're all the course, seeing also of but the And the will to Of all Halloween year, biggest are season, see costumes. the to guest our destination we're with confident as of season. XX% Halloween standing for assortment characters we Target for this branded Target new outsized response an

turns will it range of has our which come licensed year, Pictures' than collection Wicked that most a Halloween, theaters Universal for the from guests out of of housewares. leave apparel to with anticipated toys hits and one this spellbound films assortment products fall, more As out, the to

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investments cosmetics investing offerings, In care years of after haircare. in in Beauty, things all we're meaningful skin and

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Team to Before express call years routine, I Target The Michael, I every team turn but gratitude to turn anything want have has the team. handled change been over this entire my the to and several and our past each the which guests turn operate. for grace serving that, and over Thank in a you Target, communities all we other. With and for with commitment that the I'll for to to do Michael. you, call

Michael Fiddelke

Rick. have to to welcoming in your long-term team I'm and for join all earnings of in I'd shareholders. we excited for more of us growth Thanks, like you front our opportunities Brian first to the call. about as for together guests, deliver we our our work

Whether caring, reason to Every focus and center commitment members winning temporarily while store, Target by there their as fueling such Brian is CFO see together. the fully move teams hats exceptionally and wearing right a special in to to or in now COO As forward I'm mentioned, doubt distribution talented I surrounded looking only in in I'm the wearing #X that walk place And to X hat, continue day, halls results. no headquarters, I'm are the the in when COO preparing while is our to privileged day long-term growing mind I I guest-first team that role a my I'm work. operating a our the are our leaders role. that's be with the a that

of volatility the began more unprecedented highlighting focused extended years is that we've some ago. X an As than operations been retail on team fundamentals period for time, reinforcing following

staying stock points processes many while nothing improve stocks year were time and items important, the the total being lower been top than than total important quarter, our reliable guests. out going for work than encompasses And them second in on to we're effort more for in of ago. in-stock highest our had is lower even our inventory. unit year we've metrics, more May, our notable now, major Also would more total ones continue and in more were was some ago, our velocity, a to this measures out out-of-stock out stocks of storm have rapidly result the XX% than return QX more than our improving XXX Denton, more. In than not basis of year While with of remarks. It's also operational measures something my seeing from a I'll flooding if and than later ago. a that been lower facility food damage better simply investment have also distribution that these slightly the our a inventory sustained improvements, out-of-stock even severe late Texas in Notably, network been the stocks of perishable in improvements to meaning favorable at from are the with end not QX,

turns years. been happen we've expect seen always Of sales already and something our X on demand able amount has the deliver is historically, inventory inventory to business we're of right to focused our But on overall, goals, to sustain course, maintaining you'd gains we're given reliability our stronger in growing last strong. inventory categories we've where the in than the per store seen over

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notably our With service we've adequate self-checkout, staffing faster in to our made seeing lanes, lanes. the changes while streamline full maintain ensuring in self-service recent we times checkout we're

team changes, these been interactions guests X at times regarding wait using we've at related checkout all of engaging more checkout, purchase has last In and a continued full-service the substantial Promoter the in we've our with scores experience, lanes, improvement compared Scores addition, XX% nearly year. to with Net with our seen with with years. in more seen people our And strongest

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expect more in holiday tool permanent leaders helpful bring particularly stores year's telling seasonal this our than past. productive, team addition, become season, in advance more the quickly in we on are us as of helping and be members they this In will to new them new

well while efficient team and to in large in team And our unforeseen to had documented, weather-related able to events. several second important course, are help our just quality to deal maintaining the and quarter. to repeatable with processes nimble to as Of it's challenges operation, stay react a critical

perishable As damage Texas in in from a late May, that product mentioned storm significant closure site and food distribution earlier, I our a loss resulting Denton, sustained prolonged center significant at physical location.

generators, of food, in Following in members multiple for other Hurricane place successfully electronic devices. in teams operational affected Southern while storm, landfall hit quickly a team to locations kept the in end for minimize reacted open to get to take power charge When our using community distribution distribution quarter. team was and with perishable to responded facility impact, in neighbors and realigning repaired providing our the their XXX and quarter, and the supplies stores their team rushed help construction early our Texas, the the lost July, replenishment shelter food nodes, temporarily Later safe before Beryl communities. locations, quickly the and the

while homes. colleagues other roads critical meals to And each team nearby for clear to helped our of donations took organize from team of members to Our from sure disasters supplies shelter. in debris and had support core neighbors, as infrastructure, to communications cooking supplies always, care ready their deliver provide helping in supported to making To access happen. heroic to headquarters everyone emergency when at and field, maintain a the support robust that's by a we these our and efforts team displaced

events quickly occur. pallets these affected distribution to part of and thousands of which critical our when As supplies preparations, we can of be preposition network, areas deployed throughout reserve

and made in maintain the helping communities, impact $X.X far business. to headquarters support a adverse command domestic colleagues center our donations operate, continue field so and having partners. year the areas this we're and where when at in monitor proactive to also offering financial conditions proud to already our equipped that's of of disaster affect quickly global relief We communities, And million affected our and prepare other of weather in our react events course, we teams our minimize support to

Beryl, more centers Hurricane than helped donations Houston. Red up Cross American Following stand XX our evacuation in the

as they fallen and helped navigate Rubicon in clear assistance, footprint homes We also to the critical medicine medical to supplies trees, locations food, for and neighborhoods. provided homeowners project hit worked Team solar machines, disaster other to and hardest FEMA aided power supported generators the providing

in thrive, present be Forward impact. strategy knowing Target business we our guests of and of needs communities, to working the So of business. critical the and philanthropy to meet success positive serve aim assets help and to families we much Target's integrating and the to our is all business, ways sustainability to are by dedicated across our community communities address Through and meaningful the that volunteerism needs drive

So efforts, I day during want to our of both entire especially and every pause need. their times tireless team for and thank

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results. to So financial our now turn I second quarter want to

Brian earlier, As increase year offset compared was a This decline our decrease traffic. increase average average X% price traffic highlighted driven partially in a selling when in with was included which sales a ago. by QX entirely ticket, comp by our in the

guests to Fourth holiday later quarter. Day As Brian shop seasonal the week Memorial to in mentioned, around our our Circle around as leading and recent Target well strength most July moments, as continue the the of

strongest quarter. those basis. July, very in months sales importantly, reported between Most months comp were on X and were quarter, the of and traffic in X grew a Within trends similar the all June

benefit strong revenue our in in sales sales, of by primarily growth comp stores quarter in business. non-mature driven ad the X.X% Roundel growth our and total from other double-digit reflected growth second revenue, Beyond

quarter rate our a higher XX.X% strategies, this second driven work. basis ongoing was year the XX points than efficiency XXX points of our about included which benefit by margin basis Our gross About of merchandising improvement was of ago.

points digital cost from by was pressures We which largely category offset from also sales saw XX mix, benefit of about basis fulfillment and chain. supply

gross reflected shrink, from XX of rate basis first with point points basis lower XX margin quarter. Finally, in our inventory benefit the benefit about compared

this assumes in lower results store quarter, increase of QX gross better-than-expected resulting second a counts, year-over-year costs, inventory our our what bigger-than-expected quarter. we've the guidance benefit we benefit our shrink expecting that half Based in in just but seen will in would from rate benefit expect the from now QX. will shrink recent financial magnitude the While margin we're also experienced most of accounts, on be than updated benefit these that less

year were QX, already we're given year. a costs shrink for benefit financial flat will we ago, the seeing approximately expecting And to last be

encouraging last we'll our ahead, our sustainable it's in levels to the that increase shrink progress, continue given While absorbed to see move years. years the the steep business in to down has work more over this shrink X rates

last headwinds about Our to second reflected last basis XX.X% significant by was margin of back was of increase multiple profitability lower partially XXX year our SG&A QX year efficiency higher cost our of the disciplined build about basis our management from a X.X% continued encountered of along investments expense ago. quarter work our This continued business, over with higher we operating XX rate continue the were years. Overall, our savings enterprise. we've rate points the expenses, couple than and parts cost increases as which in from throughout points remodel than team, offset in

continue Regarding good our about inventory, our position. to feel we

year balance As I mentioned than lower earlier, QX ending slightly ago. inventory on was a sheet the

volatility we've experienced X-year comparisons hard However, to interpret. can since given be began, all the the of pandemic

rates positioned As half enter inventory growth to our of comparison And quarter, perform about appropriately the the XX% our we're those grown such, years, to for the X second and we sales XXXX. relative that over compare back if it you'll both useful you year. we that have find that ending view see back reinforcing still as

to briefly to like reiterate and I'd long-standing priorities. capital our Now deployment turn

look we our and financial business that fully meet and First, criteria. invest our strategic in to projects

Next, record we cash any build dividend these share limits increasing time available and And of credit in to excess our uses finally, we XX-year middle our after by of on within engaging A to look repurchases look support over the ratings. than the the return dividend. more X first annual that's

half first through and Regarding expenditures range. CapEx $X year to capital to the first in just the we've priority, billion the the $X.X billion full of billion expect allocated continue $X year

million the stock. of Regarding to the shares of second finally, repurchases in in returned our million QX, dividends year. returned about shareholders of to form representing priority, million last we $XXX to quarter, we allocating in X.X And over second the growth $XX share $XXX million retire

get and were months over XX of this repurchases quarter. Given cash last to our the balance we sheet seen strengthen the in simultaneous back profitability and to our we've the flow, improvements to work team happy our

We the the XXXX ahead. years in half expect capacity of to have continued back repurchase in and

year capital, results of ago. my quarter ROIC now is XX.X% measure an a higher the to X our So important nearly want the and I after-tax of by on on covering our second end quality percentage the Through quarter, commentary after-tax in return financial ending of invested than our was XX points months investments. both which our the capital

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remains third in remains comp range our as context, and we're adjusted GAAP quarter of that of possibilities range, for With X% our put year the for in year. to at baseline And growth quite comparable same and breadth EPS growth wide, us would guidance the for season the the planning range full plan considerations to of the $X.XX half while X% X% to sales these $X.XX. X% lower full fall and the

the insight on adjusted assumptions: GAAP basic into to has of our EPS the aspirations in prior the XX growth strong next resulting and tough making year the faster our our already of financial compared decisions, delivered range our environment, of QX our growth first operating are in baseline $X even our also to environment reliability year, year, traffic. And in and line to range healthy years. the line we've consumers earlier At a on core, top second in the Community in those full we raised expectations trade-offs our value value our expanded $X.XX top the importantly, this and our Meeting with financial their to rate. light on margin bottom based X $X.XX. At aspirations $X.XX are guest the challenging their However, where half level profitability Financial an delivered on even quarter, newness, performance appropriate and reaching guests, team in of line. in over and focused growth In spending provided we business beyond

the step was team. XX%. which in first We much a with more the time which work a was only EPS this while of are faster and than a period really revenue than us. the At same total lot proud line, over the XXXX the growth X-year in reflect with our as these second outstanding a work dedication hard have of growth top of that quarter first results, specifically, longer our ahead baseline, XX% of of grew EPS more More and and quarter we on the time, journey

both Our initiatives, to additional years the based expect efficiency those year see opportunity inventory of ahead. and the ongoing further shrink, remainder of impact implies of work in the on growth to expansion And for guidance the progress of metrics. continued reduce we our

we're of it happen. in place to clear right team and how there make the a get vision have to We going

to With the Brian. over call turn back that, I'll

Brian Cornell

Thanks, Michael.

in a so The a great reason consumers compelling and Target great to a unique Before which different turn spend the We we've prices, bond is the offer on concept business. before, minute something promotions a everyone we and offer on such uniquely experience. touched we in convenience, why with and is because I way marketplace. we else developed special shopping power your the of our want we've to questions, is leverage than

destination and digital Our nearly options the and we of and suite X,XXX Home a population, have majority U.S. discretionary stores are of the Hardlines; fast like & in in Beverage; convenient for well Apparel, serve fulfillment like broad as perfectly categories, We a categories, in vast accessible merchandise to for which known curating Food a offer both. items, of range straddles we're shop, assortment. and and Essentials one-stop convenient frequency our and Beauty, comprehensive

for of I'm we deliver our ready a beyond. achieve in We the and proud on quarter foot we're needs. When challenges. best, Knowing wants celebrating environment Target our are a known We're third second leader. in for balance team results and quarter everyday their reliability and are of for delivering team was guests a strategy, consumers incredibly and style Target. where or better-than-expected being facing front seasonal to work the there's moments, we an be on multiple those and is at go-to-market more offer textbook our more to our between proper of aspects all example done,

forward Our team's energy forward the years them and as I continue to quarters working move is they contagious, positive ahead. in to Target with look and

take questions. to we'll happy with and So to I your Q&A. Rick, will Michael that, be move

Operator

comes Kate Sachs. McShane Instructions] question [Operator with first Our from Goldman

Katharine McShane

your a but understand that end also you've in you the seen same-store guidance for notable the lower ability to or range the maintain of Can seen for high the year-to-date. the flagged range get reconcile what guidance likely guidance the that range year? mentioned to quarter haven't to you sales help get are X, you end You for change for us consumer versus to the QX,

Michael Fiddelke

the question, Kate. for Thanks

spite see headline is, and of consumer last consumer over of the we consistent start flat your of how resilient would a have choiceful. with of over overall we quarters, a the last consumer that's consumer at couple that's their in inflation the the think described largely spending couple I a been that's the in years, question, significant

end the newness our expectations. of was And performance top to of combination so in and that right the second value the getting led at quarter our

in measured the kind balance us, review and year. of is over of we've we of As we importantly, year, consumer year more that front But is behaviors it's a be think still balance the the the prudent look on at got the watching take to guidance of we'll behind against of us the than growth. centered

We in continue to expect QX. to grow

story goal, the us way offense see our have to expect the business. to We playing that against in for a appropriately position outlook. measured And you being growth can but that's year. We right think the

Brian Cornell

build Kate, on comments. to Michael's just

moments. Rick taking quarter. there uncertainty, But from guidance are we're season. is so excited the very win, Back-to-School and now and And feel for play and moments for I the planning environment, you how the We're as good we're to holiday from approach prepared where consumer in Back-to-College. his right appropriate Rick we're to in seasonal heard Halloween. Michael, about we third think team this big during the in and about continuing to unique some much We're

sure newness don't appropriate to So our want traffic confused the to anyone for to I the outlook and and value the we're with visit to along guests with to think be throughout continue third our we're stores going we great play offense, drive is what site, deliver into season. that the make for we quarter. look going to But fact our

Operator

next Our Parikh with from Oppenheimer. is question Rupesh

Rupesh Parikh

quarter. Congrats on nice a

the getting feel you to plus then improvement? quarter. sustainability delivery go time, over to back had annual about So during margin to the still wanted back margins on the performance strong X% the that I We during How the just operating And basis? of quarter. very an do

Michael Fiddelke

Thanks question, for Rupesh. the Yes.

start this the that work was team better thank be quarters on X of over the we performance path in, for put I And out As margin laid improvement we enough that us to the time. their the to year. solidly laid year, about can't year going progress the of out at just to the

quarter, my on with this hit some top starts the remarks, but If always it the line. unpacked of in you I

the Apparel. line, category a grow to top see comp So to a X% like

mix from like to see efficiency category continue find Apparel, Great growth that return So the the to in to a perspective. team business. we the margins work helped us to by within

out the certainly line on making strength to due the the to with a you see really But so far. expected pleased in on that ways squeeze and progress team's promotional margin this continue business we're more efficiencies to can small. We've hard we work the And year. of environment the we're shrink. big seen And

Now noise through. about quarter-to-quarter some there's will come that how

net details those ahead of punch be progress some shrink expected of line unpack terms on we're But we too. prepared remarks. my in to tried So there to of where the is in

so to earnings be certainly our And that up momentum we're continue with. result, that's an And will pleased continue adding all work in going forward QX. and to QX

Brian Cornell

to off. the Rupesh, that very progress the talked the team the the where helping I'd and us heard no I But to a shopping. on has improving value really is think can they're digital and we And our operating things just retail made Rick's that reliability, execution value and about the the in performance. been on amplify our guests provide standpoint. on we and standpoint retail sure few in-stocks. the placed every quarters we've fundamentals. they're really making focus a in talked I last pay shopping our the couple of margin Michael benefits from make you're recognize And the physical day, about how comments focus you've and over improvement teams us each seeing control a matter of both that focused controlling fundamentals, improve commitments think

Operator

is next JPMorgan. from Our question Horvers Chris with

Christopher Horvers

more the specifically can terms back second margin the strength the in quarter? in about half what drove is, you in the question of are embedding merchandise you talk what first strategy sustainability? My in And

Michael Fiddelke

lot goes the quarter. Thanks margin that question, that Yes. for into a Chris. There's line any on

some up are we align of thing unit bit to demand. to little we in in And hard that one activity on where improvement see seen seen the more cost To shipping a with against expensive the and headlines a the within is teams have as a big per a significant do better give worked show ways box, teams environment. and continued the to the inventory so can have see touched the And that that example, small. fulfilling worked We've promotional brown product is, definitely find we've with business. we've of we've things backdrop, progress efficiencies that most in But already. tangible

more And have shipments adds and to have split and team, multiple delivering seeing the stores, those product been our within for up. as big we at And it pack in improvements we it teams now, work efficiently So that we're quarters core off. in and so productivity stores the frequently. the processes, pick that pay

Christopher Horvers

the line, how seems more curious then the And was the been there like of top volatile, Obviously, on lot lot Understood. I event-driven. in back, has consumer There half more just forecast business. some was a the you July. a pause

As you looking business. second terms look insight the do Are plan revenues the XXXX? of trends looking at business, stacks? at there off you you Just seasonal quarter? you at in building Are the how some forecast you versus

Brian Cornell

all Chris, I different I on at And think quarter. our look think outlook factored many ongoing and basis. the you've things we for the of period covered into variables the an we those

Operator

Simeon is Gutman question next Our with Morgan from Stanley.

Simeon Gutman

product July is I the comps any you like discretionary I consumer positive? about wanted when how first. sounds And then to expectation may don't connected It Back-to-School, near-term about relatively for steady. inflect on comps know behaving. were to question if And to in talked ask it, a due curious the

Brian Cornell

of Simeon, Rick heart as we're obviously, season, the of the of we in Halloween kind about, excited about upcoming the Back-to-College. And Back-to-School as chapters season. talked early sit here today,

for as physical prepared a feel I experience. in and and sit think moments, make we'll great seasonal big well we today, with to we those we digital continue sure here lean

Simeon Gutman

positioning I think lowered the price about about if, you places? with investments, the follow-up. of enhance that X,XXX one, elasticity, assume the in items I one position some to there pleased ask other price Can you're opportunities does price Maybe have Are make the broadly? been it

Brian Cornell

way the I really reacted consumers those those made here purchased Simeon, we think but feel investments about Look price on beyond frequently sit the goes the to items, we good investments. we've it X,XXX really today,

you're shop. If offers personalized getting Target you're every member, you time a Circle

Circle X% you If Card, you're have for using opportunity that a the Target discount.

just amazing brands, we If more of through when the with one advantage shopping own way value you're our that's Target. you're provide value taking find to

things with we day environment. guests every strengthen a this it's the looking that provide with value and they're So do really in have bundle to for and the them relationship those all economic of each the we

Operator

of Bank America. with Ohmes Robby from comes question next Our

Robert Ohmes

talk fast still expected change? been And going Outstanding penetration. others, maybe it, quarter. I to call Drive sales or from expected Is that Circle It guess, delivery growing couple changing same-day up. was Circle from Is Target things, offset? XXX, you -- and these that as not things Target you Brian then the is as of change? hoping, still is as about hasn't And could I also is a potentially Would margin a that Up. implication on there be any driver? to

Brian Cornell

questions Yes. from X got I'm there. X start. I'll Michael it pick let up Robby, you've going there. or to

Michael Fiddelke

Yes.

XXX I'll same-day Importantly, take kind delivery business, We're both really pleased in the teens. second point grew of first. it our your and Drive low Robby, with Circle Up

about of our before, for we've and both we're importantly, this seen I those it we've that. and And so some but acceleration services, relaunch And by of business so talked heels in that total warrants thing users see encouraged of become the with Circle, shopping on Target XXX delivery The think more Circle we Up reemphasis. of engage at and a those they people that meaningfully in-store increases services. in after same-day when actually Drive has with been

of continue use we growth our services consumers to and with wallet growth relationship services. so of And means those watch in the that those that closely share

bring I your card Circle see our time penetration. to believe of focused Circle with that the investment back specifically, on Speaking Card Circle to opportunity and was growing business. We relaunch to over some more question

that business, with where journey and XXX X% And with program, to Card personalized of of if to an those provides programs, brings Circle the program, Circle the incredible you if One Circle point but off of that's a jumping value the a time of want over find core Card Circle reinvigorate the you're integration be the years. to continue brought they of every your where day Target Circle extra offers save base think, through good going Circle relaunch program, Card the best guests receive doorstep. a to it quarters we the provides can you that, is can things that member

Brian Cornell

a clarify we XXX new the Week, members Circle million program. with did base points. just a a note Robby, to couple that we of join base million saw Circle start over July of we From while program standpoint, members, X the during

and Up sticky Drive XX%, about of the and grow second XXX. talked we acceleration continues saw Up delivery just Circle Circle has in And a service You almost And very a to over Target grow. XXX Up Drive been a for during Drive XX%. same-day and us Target quarter, nice

been opportunity many tremendous to So our $X business just a year-to-date think, But for to a Up for and I Circle Michael, is for It $X to second And I'd quarter. in us stellar billion Drive has we almost grow. continues XXX highlight see the continue was really Target performance expand program. us now billion. years

it's service our So going we we target that time spend user, and like But that really they're important guests really a they're know combination. store, a we Up to been a Drive know in appreciates. point, to Michael's

Operator

is Kelly next Fargo. with Ed from Wells question Our

Edward Kelly

And point? on provide you that inflect category I here. when think little this a you total could happening discretionary in talk bit What with was you is negative is do share maybe then about bit that positively? comps, at may can market think hoping still detail more you a

Brian Cornell

kitchen, other ones to we're the over and but think the areas. become certainly you're categories. seeing those going that some And in I'm strength some in as talk we're in green about led within cycles some trends we in to that like subsets He discretionary categories by Apparel talked time going also replaced, shoots to those seeing be of of Rick let strength need these categories. about in Home, purchase Apparel, see

seeing in of walk Ed we're you But through Rick, discretionary trends some why categories? the don't

Richard Gomez

we're delivered those price, the and in a stylish And offer happy that great give in I'd responds. comp. we what's consumer be trends X And seeing Sure. little to Apparel. a Apparel on-trend to is at seeing when trends. we're color discretionary the commentary driving what product a

favorite job Motion affordability. combined the the leggings Some where real a a with $XX fashion was fan team fantastic fit. of in demonstrated was spots bright really performance All colors, and fabrication, on did power brand,

Home standout, line, also it really already few Beyond that, success it's see Beauty comments, successful see just we mentioned the to ever it of where with new guests. launched Blake And at really a exciting had is my haircare we a the freshen resonating home. buy freshen example, launch affordable other of ago, another do up Target. I haircare in businesses, Blake and but at to Brown. news We up weeks is their they stylish when the that price. And have of consumer most they I consumers Lively's the great in to on on-trend, need want this look, the think combination I use example is They their it even to want as find an willing right an that budget. product to is but

home. where of look accessories, throw like decorative So candles, seeing freshen the because inexpensive an to see your pillows. things growth is we growth way there we're offering We're up

great So price. back on-trend to delivering again, stylish a at it goes product

Brian Cornell

this all a fits sport. are the for bring Target. design and nicely Target example great at families is position. the And the I'll a that's known tenants at give for Prince guests with been brought with great the accessories the it's we value, just has rackets. trend Prince It you our Prince across things our And positively. Brands, partners one had while know and all-family favorite see we created new one really with when brand we that at on and years, we've And earlier throughout Authentic destination enjoying pickleball, pickleball, examples country very brand. reacting a that brand we great year, from it's of more apparel, we Target collaboration and into my When category leveraging of the And

his see you'll spark of demand. team trend, design and to into value, Rick that So combination that great newness categories to continue great those sure to on continue and greater bringing make we're

John Hulbert

Operator, we final today. one question time for have

Operator

Jefferies. with Tarlowe from comes question final Corey Our

Corey Tarlowe

a if that that of you've carried expectations the & for pandemic, of specifically assortment wondering and years, as little number That's where Food Beverage about the longer-term widened over items since you've a you mix especially you've the your continued over in to was grow I category time. several category. talk last bit the

over hear be So thoughts trajectory for around really curious long-term I that would business to the time. your

Brian Cornell

to Corey, leading going was connected significant have think great turn some to start, opportunity by strong really consumer. Beverage owned led in partnerships combination, happy that with it I'm I'm over that to of the the again, we space, and growth brand for national have obviously, & Rick business. brands who, unique We our Food and

of your early business. share got building So so our the of out in don't why some thoughts? experience in Food days we're we you space, But still you've think Rick, much the

Richard Gomez

Brian little a I'd believe Beverage business deliver driven the commentary offer the few Food business. growth, there a to to as for And we & by runway color said, things. on happy is be continued

first on The is emphasis continued affordability.

continue with the Food as portfolio, talked As we personalized everyday as our not reductions to pricing, well price on through & offers about, own We'll on brand our across items received. Circle also everyday lean which Beverage value. into well X,XXX promotions was but through incredible incredibly value just business,

that will continue & Food growth thing Beverage newness. second for in The drive will to be lean to

a fuel new Leveraging Pie, continue the coming, loves business XXX growth well that products over ease simple fall. products, Spice, as Pumpkin very as and opportunity growth. And new which that new both for runway drive about everybody national into double-digit brand about we and have that continue looking will see Drive lot in XXX right excited solutions, Beverage convenience. the we forward. and seeing continue same-day I'm we're fall now, the around flavors ton last that Up growth & the Food growth our over on going they're going plate, on own talking brand a on achieving then delivery, their have and QX, those Consumers season, of is for to products. is we're Pecan continued Just in to to to Apple,

Brian Cornell

call. talking and everyone I Operator, to our us, again you appreciate soon. conference joining second look forward that quarter concludes to we

Target (TGT) 21 Aug 242025 Q2 Earnings call transcript