Joe Feldman

Joe Feldman asked the newly promoted business leaders (Chris Nicholas, Latriece Watkins, David Guggina) for their initial thoughts and observations as they take over their respective divisions.

Answer

EVP and COO Chris Nicholas expressed excitement about international growth opportunities, leveraging 'Build One, scale globally' platforms. EVP and Chief Merchandising Officer Latriece Watkins highlighted the energy and momentum at Sam's Club, focusing on member access to great merchandise and fast service through Scan & Go and delivery. EVP and Chief eCommerce Officer David Guggina, humbled by his new role in Walmart U.S., noted the strength of the omnichannel model, investments in automation, new stores, remodels, Marketplace, membership, and advertising, and the significant runway ahead.

Joe Feldman asked the newly promoted business leaders (Chris Nicholas, Latriece Watkins, and David Guggina) for their initial thoughts and observations as they step into their new divisional roles.

Answer

EVP and COO Chris Nicholas expressed excitement for International, seeing significant growth opportunities by leveraging global platforms and AI. EVP and Chief Merchandising Officer Latriece Watkins shared her enthusiasm for Sam's Club, highlighting the energy of associates and members, and the focus on providing great merchandise, value, and fast service through delivery and Scan and Go. EVP and Chief eCommerce Officer David Guggina conveyed humility and energy for Walmart U.S., noting the strength of the omnichannel model and significant investment opportunities in automation, new stores, remodels, marketplace, membership, and advertising.

Joe Feldman inquired about opportunities in the merchandise mix, seeking initial feedback from the new Chief Merchandising Officer, Michelle Israel, on areas to lean into or pull back from.

Answer

CEO Winnie Park expressed excitement for Michelle Israel's new perspective, emphasizing the team's continued focus on chasing market trends and value. She highlighted the strategy of leaning into broader lifestyle trends over single items and exploring new opportunities like party and celebration. The team will continue to refine assortment levels, depth of buys, and maintain a constant flow of newness.

Joe Feldman asked how Dollar Tree plans to increase visit frequency among its newly acquired higher-income consumers, exploring potential methods such as marketing stimulus or other strategies.

Answer

CEO Mike Creedon emphasized creating a 'sticky relationship' through a more relevant assortment that offers 'wow' discovery items and by consistently running better stores. He noted that increasing trip frequency among these new, higher-income customers is a key opportunity, as it's currently a differentiator compared to aspirational competitors.

Joe Feldman inquired about Dollar Tree's strategy to increase visit frequency among higher-income consumers, asking if it involves more marketing stimulus or other methods.

Answer

CEO Mike Creedon emphasized creating a 'sticky relationship' through a more relevant assortment that offers 'wow' discovery items for both seasonal and everyday essentials. He also highlighted the importance of running better stores and improving the in-store experience to encourage these customers to visit more often.

Joe Feldman inquired about the performance of Best Buy's loyalty program, noting its role as a key driver throughout the year. He also asked for initial thoughts on store investment strategies for the upcoming year, considering past model adjustments and new initiatives.

Answer

Corie Barry, CEO, stated that the loyalty program has over 100 million members across three tiers, with nearly 8 million paid members, up from 7 million last year. The focus is on driving value through personalized promotions and testing ancillary services like NFL Sunday Ticket. Regarding store investments, she emphasized stores as crucial assets for differentiated experiences and fulfillment, with 46% in-store pickup. Future investments will focus on refreshing store aesthetics, immersive experiences, and addressing larger formats through relocations, resizing, or partner consolidations (e.g., IKEA pilot). She also noted positive results from three new small-format stores and the increasing engagement of Gen Z customers with the in-store experience.

Joe Feldman asked for more details on the performance of Best Buy's loyalty program, noting its role as a key driver throughout the year. He also inquired about the company's initial thoughts and plans for store investment and strategy for the coming year, given ongoing model tweaks and new initiatives.

Answer

Corie Barry, CEO, highlighted the importance of the membership program with over 100 million members across three tiers, including nearly 8 million paid members. She emphasized driving value through personalized promotions and ancillary services like the NFL Sunday Ticket. Regarding stores, Corie Barry reiterated their crucial role as assets for differentiated experiences and fulfillment. She outlined continued focus on store look and feel, capital investments, addressing larger stores through relocations, resizing, and partnerships (like the IKEA pilot), and leaning into smaller format stores, noting Gen Z's increased engagement with the in-store experience.

Joe Feldman asked for specific examples of the planned in-store changes for the next year, particularly regarding key floor pads beyond the FUN 101 initiative.

Answer

CCO Rick Gomez provided examples, stating that FUN 101 changes are ongoing, and significant transformations are planned for the Home category to elevate style and facilitate discovery, including a reinvented Threshold brand. He also mentioned plans for the Beauty space post-Ulta Beauty contract in August 2026, and changes in the Baby category to make it more inviting and gift-focused. CFO Jim Lee and COO Michael Fiddelke then discussed Target Circle card penetration. Jim Lee noted lower spend, penetration, and balances in the card program, while Michael Fiddelke identified an opportunity to better leverage the large Target Circle base as an on-ramp for Circle card adoption.

Joe Feldman asked for specific examples of planned in-store changes for next year, beyond the FUN 101 initiative, focusing on key floor pads. He also followed up on the declining penetration of the Target Circle card, seeking reasons for the trend and strategies to re-engage customers.

Answer

Rick Gomez, Chief Commercial Officer, provided examples of upcoming in-store changes, including further evolution of FUN 101, elevating the home business (product style, store experience, Threshold brand), post-Ulta Beauty contract plans, and enhancing the baby category. Regarding Target Circle, Gomez highlighted its large size and the success of Target Circle 360 in fueling same-day delivery, mentioning early access events and leveraging first-party data for personalization. Jim Lee, Chief Financial Officer, noted lower spend, penetration, and balances for the card program. Michael Fiddelke, Chief Operating Officer, identified an opportunity to better convert Target Circle members to cardholders.

Joe Feldman inquired about the primary drivers behind the strong January order growth, asking if it was due to stimulus, marketing, or new customer acquisition. He also asked about the company's promotional strategy and the current customer lead time for a custom sofa.

Answer

Chairman & CEO Farooq Kathwari attributed the strong demand to the company's brand quality and increased consumer interest in home furnishings. He noted that Ethan Allen has intentionally maintained promotional savings of up to 25% to attract new clients, which has successfully increased their customer base. Despite these discounts, he explained that margins have improved due to operational efficiencies and a more cost-effective shift to digital marketing. Kathwari stated that the current lead time for a custom sofa has been reduced to approximately 8-9 weeks.