6b17b4bd1bb81bf8123f397681f343f3715879b326da1b50acdeb86549f4bbb2

| Business/Product Segment | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|--------------------------|---------|---------|---------|---------|---------|---------|---------|
| Apparel & Accessories ($ million) | **3,967**  **[0000027419-23-000025_tgt-20230429.htm:5]**  | **4,101**  **[0000027419-23-000035_tgt-20230729.htm:5]**  | **4,007**  **[0000027419-23-000052_tgt-20231028.htm:5]**  | N/A | N/A | N/A | **4,003**  **[0000027419-24-000179_tgt-20241102.htm:5]**  |
| Beauty & Household Essentials ($ million) | **7,682**  **[0000027419-23-000025_tgt-20230429.htm:5]**  | **7,513**  **[0000027419-23-000035_tgt-20230729.htm:5]**  | **7,619**  **[0000027419-23-000052_tgt-20231028.htm:5]**  | N/A | N/A | N/A | **3,226**  **[0000027419-24-000179_tgt-20241102.htm:5]**  |
| Food & Beverage ($ million) | **5,997**  **[0000027419-23-000025_tgt-20230429.htm:5]**  | **5,392**  **[0000027419-23-000035_tgt-20230729.htm:5]**  | **5,736**  **[0000027419-23-000052_tgt-20231028.htm:5]**  | N/A | N/A | N/A | **5,917**  **[0000027419-24-000179_tgt-20241102.htm:5]**  |
| Hardlines ($ million) | **3,391**  **[0000027419-23-000025_tgt-20230429.htm:5]**  | **3,383**  **[0000027419-23-000035_tgt-20230729.htm:5]**  | **3,192**  **[0000027419-23-000052_tgt-20231028.htm:5]**  | N/A | N/A | N/A | **3,152**  **[0000027419-24-000179_tgt-20241102.htm:5]**  |
| Home Furnishings & Décor ($ million) | **3,855**  **[0000027419-23-000025_tgt-20230429.htm:5]**  | **3,955**  **[0000027419-23-000035_tgt-20230729.htm:5]**  | **4,420**  **[0000027419-23-000052_tgt-20231028.htm:5]**  | N/A | N/A | N/A | **4,185**  **[0000027419-24-000179_tgt-20241102.htm:5]**  |
| Other ($ million) | **374**  **[0000027419-23-000025_tgt-20230429.htm:5]**  | **40**  **[0000027419-23-000035_tgt-20230729.htm:5]**  | **30**  **[0000027419-23-000052_tgt-20231028.htm:5]**  | N/A | N/A | N/A | **30**  **[0000027419-24-000179_tgt-20241102.htm:5]**  |

82e0c25f08172fec6e23b02cfc618c94179512834a9a35a8fac33ccceab1cd98

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

9ac63fd162415c4432570fc2c5f4386c8f627d92a84190ead991f5aa66285755

Card Penetration

f419c094b4d1a101825e860fc966d66975e76f581a86f60580ed0226005a8a7c

| Metric                  | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|-------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Card Penetration        | 19.4% **[0000027419-23-000010_a2022q4ex-99.htm:5]** | 19.0% **[0000027419-23-000023_a2023q1ex-99.htm:5]** | 18.6% **[0000027419-23-000032_a2023q2ex-99.htm:5]** | 18.3% **[0000027419-23-000048_a2023q3ex-99.htm:5]** | 18.4% **[0000027419-24-000008_a2023q4ex-99.htm:5]** | 18.0% **[0000027419-24-000129_tgt-20240504.htm:10]** | 17.7% **[0000027419-24-000152_tgt-20240803.htm:11]****[0000027419-24-000142_a2024q2ex-99.htm:4]** | 17.7% **[0000027419-24-000179_tgt-20241102.htm:11]** |

25bfdad862693b1978243ee6997178afa14d4b2ff07e8c34d59a8cc5a9bd2088

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

Selling, General, and Administrative Expenses (SG&A) [USD, Millions]

Research and Development (R&D) [USD, Millions]

Depreciation and Amortization (D&A) [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

Earnings Per Share (EPS) - Basic [USD, Units]

Earnings Per Share (EPS) - Diluted [USD, Units]

fccaab208972376efaf37993240d45b873d9a877ea80ceeeea05ad537e5960bc

Target Corporation operates as a large retailer offering a wide assortment of general merchandise and food, both in physical stores and through digital channels. The company manages its business across five core merchandise categories: Apparel & Accessories, Beauty & Household Essentials, Food & Beverage, Hardlines, and Home Furnishings & Décor **[0000027419-24-000032_tgt-20240203.htm:4]** **[0000027419-24-000032_tgt-20240203.htm:53]**. Merchandise sales represent the vast majority of Target's revenues, with additional income from credit card profit-sharing and other sources **[0000027419-24-000179_tgt-20241102.htm:5]** **[0000027419-24-000152_tgt-20240803.htm:5]** **[0000027419-24-000032_tgt-20240203.htm:53]**. Approximately one-third of Target's sales come from its owned and exclusive brands, which include popular names like Cat & Jack, Threshold, and Good & Gather **[0000027419-24-000032_tgt-20240203.htm:4]** **[TGT_3376624_3]**.

1. **Beauty & Household Essentials** - Offers a wide range of beauty products and household necessities, catering to everyday consumer needs.
2. **Food & Beverage** - Provides a diverse selection of groceries and beverages, including fresh produce and packaged goods.
3. **Home Furnishings & Décor** - Features a variety of home furniture and decorative items, enhancing living spaces with style and functionality.
4. **Apparel & Accessories** - Sells clothing and fashion accessories for men, women, and children, including exclusive brands.
5. **Hardlines** - Includes durable goods such as electronics, sporting goods, and toys, appealing to a broad customer base.

c3996c44d0ce87092340c96ef3a4ab6add847feb1f77c5f9666d9bc7cdf6fd97

8ef4c0bd6242b31a14f00cb898fb18696b1c52c723f02fca84fa75b0b6a85f55

1. Given the better-than-expected operating margin performance this quarter, can you elaborate on the specific drivers behind this improvement, and how sustainable are these factors in the face of ongoing cost pressures and a potentially more promotional environment?
2. Despite improvements, discretionary categories still posted negative comps. What are the key challenges preventing these categories from returning to positive growth, and when do you anticipate an inflection point in discretionary spending?
3. With the significant growth in your Food & Beverage business since the pandemic, how do you plan to manage the long-term mix of this category, and what impact does a higher proportion of lower-margin consumables have on your overall profitability?
4. You mentioned progress in reducing inventory shrink ahead of expectations. Can you provide more details on the strategies implemented to combat shrink and how you plan to sustain these improvements, especially considering the industry-wide challenges related to theft and loss?
5. Your after-tax return on invested capital (ROIC) increased to 16.6%, nearly 3 percentage points higher than last year. What specific initiatives contributed to this improvement, and how do you plan to maintain or enhance ROIC going forward in a potentially volatile economic environment?

14f6c22b34bce94451c71c25973288c5ef7fa29734010d3ba0d9494794715aac

154a5f4b0fbf1543f74aefaa7d779419819731ce2eec57a6696cd4483b04496b

- Albertsons Companies, Inc.
- Amazon.com, Inc.
- Best Buy Co., Inc.
- Costco Wholesale Corporation
- CVS Health Corporation
- Dollar General Corporation
- Dollar Tree, Inc.
- The Gap, Inc.
- The Home Depot, Inc.
- Kohl's Corporation
- The Kroger Co.
- Lowe's Companies, Inc.
- Macy's, Inc.
- Nordstrom, Inc.
- Rite Aid Corporation
- Ross Stores, Inc.
- The TJX Companies, Inc.
- Walgreens Boots Alliance, Inc.
- Walmart Inc.
- BJ's Wholesale Club Holdings, Inc. (included in the Current Peer Group)  **[0000027419-24-000032_tgt-20240203.htm:29]** 

31a4b1acd7cffbdddb796ff073a42f16d3d5775c7fe32f9bd9032762ef795a64

### Q2 2025 Earnings Call
   - **Issued Period**: Q2 2025
   - **Guided Period**: Q3 2025 and FY 2025
   - **Guidance**:
     - **Q3 2025 Guidance**:
       - Comparable sales growth: **0% to 2%**  **[TGT_3399649_12]** .
       - GAAP and adjusted EPS: **$2.10 to $2.40**  **[TGT_3399649_12]** .
     - **FY 2025 Guidance**:
       - Comparable sales growth: **0% to 2%**  **[TGT_3399649_12]** .
       - Full year GAAP and adjusted EPS range: **$9 to $9.70**  **[TGT_3399649_12]** .

### Q1 2025 Earnings Call
   - **Issued Period**: Q1 2025
   - **Guided Period**: Q2 2025 and FY 2025
   - **Guidance**:
     - **Q2 2025 Guidance**:
       - Comparable sales increase: **0% to 2%**  **[TGT_3390498_11]** .
       - EPS: **$1.95 to $2.35**  **[TGT_3390498_11]** .
     - **FY 2025 Guidance**:
       - Comparable sales increase: **0% to 2%**  **[TGT_3390498_11]** .
       - EPS: **$8.60 to $9.60**  **[TGT_3390498_11]** .
       - Capital Expenditures (CapEx): **$3 billion to $4 billion**  **[TGT_3390498_10]** .
       - Dividends: Plan to recommend a small increase in the quarterly dividend  **[TGT_3390498_10]** .
       - Share Repurchases: May resume later in the year  **[TGT_3390498_10]** .
       - Gross Margin Rate: Expected benefit related to shrink  **[TGT_3390498_9]** .
       - After-Tax Return on Invested Capital (ROIC): Expected growth into the high teens  **[TGT_3390498_10]** .

### Q4 2024 Earnings Call
   - **Issued Period**: Q4 2024
   - **Guided Period**: Q1 2024 and FY 2024
   - **Guidance**:
     - **Q1 2024 Guidance**:
       - EPS: **$1.70 to $2.10**  **[TGT_3376624_25]** .
     - **FY 2024 Guidance**:
       - Comparable sales increase: **0% to 2%**  **[TGT_3376624_25]** .
       - Operating Margin: Increase from **5.3%** towards **6%**  **[TGT_3376624_25]** .
       - EPS: **$8.60 to $9.60**  **[TGT_3376624_25]** .
       - Capital Expenditures (CapEx): **$3 billion to $4 billion**  **[TGT_3376624_26]** .
       - Shrink Rates: Expected to remain flat  **[TGT_3376624_23]** .
       - Roundel Ad Business: Expected growth contributing to gross margin and revenue  **[TGT_3376624_25]** .

49ea9705232b5b72b844f20628b6bf0fe7bf6ab9dd09fdfe95b0227ff1c9380c

89e26418c080e5f6f028cace133b59f178c52400f6621710da2c5a834b79a2c5

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

| Name                  | Position                                                                 | Start Date         | Short Bio                                                                                                                                                                                                                           |
|-----------------------|--------------------------------------------------------------------------|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Brian C. Cornell      | Chair of the Board and Chief Executive Officer                           | August 2014        | Brian C. Cornell has served as the Chair of the Board and CEO of Target Corporation since August 2014. He has over 30 years of leadership experience in retail and global consumer product companies  **[0001308179-24-000626_ltgt2024_def14a.htm:32]** **[0000027419-24-000032_tgt-20240203.htm:8]** **[0001308179-23-000828_ltgt2023_def14a.htm:39]** .                      |
| Michael J. Fiddelke   | Executive Vice President and Chief Operating Officer, Chief Financial Officer | February 2024 (COO), November 2019 (CFO) | Michael J. Fiddelke has been the Executive Vice President and COO since February 2024 and CFO since November 2019. He previously held senior roles in operations and merchandising capabilities  **[0000027419-24-000032_tgt-20240203.htm:8]** .                                |
| A. Christina Hennington| Executive Vice President and Chief Growth Officer                        | February 2021      | A. Christina Hennington has been the Executive Vice President and Chief Growth Officer since February 2021. She previously served as Chief Merchandising Officer for Hardlines, Essentials, and Capabilities  **[0000027419-24-000032_tgt-20240203.htm:8]** .                    |
| Melissa K. Kremer     | Executive Vice President and Chief Human Resources Officer               | January 2019       | Melissa K. Kremer has served as the Executive Vice President and Chief Human Resources Officer since January 2019. She was previously the Senior Vice President of Talent and Organizational Effectiveness  **[0000027419-24-000032_tgt-20240203.htm:8]** **[0000027419-23-000015_tgt-20230128.htm:7]** .                   |
| Don H. Liu            | Executive Vice President, Chief Legal & Compliance Officer, and Corporate Secretary | October 2023       | Don H. Liu has served in his current role since October 2023. He was previously the Chief Legal & Risk Officer and Corporate Secretary. He will retire in August 2024 and serve as a strategic advisor until May 2025  **[0000027419-24-000032_tgt-20240203.htm:8]** **[0000027419-24-000179_tgt-20241102xexhibit1023.htm:0]** **[0000027419-24-000140_tgt-20240116.htm:0]** .      |
| Cara A. Sylvester     | Executive Vice President and Chief Guest Experience Officer               | May 2022           | Cara A. Sylvester has been the Executive Vice President and Chief Guest Experience Officer since May 2022. She previously served as Chief Marketing & Digital Officer  **[0000027419-24-000032_tgt-20240203.htm:8]** .                                                           |
| Matthew L. Zabel      | Executive Vice President and Chief Corporate Affairs Officer              | October 2023       | Matthew L. Zabel has been the Executive Vice President and Chief Corporate Affairs Officer since October 2023. He was previously the General Counsel and held senior roles in risk and employee relations  **[0000027419-24-000032_tgt-20240203.htm:8]** .                        |
| Jim Lee               | Executive Vice President and Chief Financial Officer                      | September 22, 2024 | Jim Lee will be the Executive Vice President and CFO effective September 22, 2024. He previously held leadership roles at PepsiCo, including Deputy CFO and Senior Vice President of Corporate Finance  **[0000027419-24-000160_tgt-20240919.htm:1]** .                           |

02db2247336d3222e9b670d643a9091493692a899efa2049807413a425b105d8

- *Three important bear case points for Target Corporation ($TGT) based on the Q&A section:**
- **Sales decline of around 5% in Q3 and similar guidance for Q4**, indicating continued pressure on top-line performance.  **[TGT_3367297_18]**
- **Seven consecutive quarters of declines in discretionary goods**, both in dollars and units, suggesting ongoing challenges in key product categories.  **[TGT_3367297_18]**

e416d59c6abc16472e8243fc41df74bda2fe906e2569c5e53ace1ae714f5ff1e

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | August 11, 2021  **[0000027419-24-000179_tgt-20241102.htm:23]**  |
| End Date/Duration        | No stated expiration  **[0000027419-24-000179_tgt-20241102.htm:23]**  |
| Total additional amount  | $15 billion  **[0000027419-24-000179_tgt-20241102.htm:23]**  |
| Remaining authorization amount | $9,171,483,556  **[0000027419-24-000179_tgt-20241102.htm:23]**  |
| Details                  | Authorized by the Board of Directors  **[0000027419-24-000179_tgt-20241102.htm:23]**  |

59571f007fdc6d75657656414b9b4c1c7d0276e189acf7071f29a217c62a078e

U.S. Segment Revenue

Canadian Segment Revenue

Total Revenue

94b052ab8386fbe814cb1e8b03077d006fefea87fa56d09c77232b4f3e1c07f2

1. **Operating Margin Sustainability**  
   **Q:** Can margins sustain improvements and return to 6%+ annually?  
   **A:** We're pleased with our margin progress, thanks to top-line growth of **2% comp** and efficiency gains.  **[TGT_3399649_15]**  Apparel's return to growth improved mix, and we found efficiencies despite a more promotional environment.  **[TGT_3399649_15]**  We're ahead on shrink reduction and will work to maintain momentum into Q3 and Q4.  **[TGT_3399649_15]** **[TGT_3399649_16]** 

2. **Merchandise Margin Strength**  
   **Q:** What drove Q2 merchandise margin strength, and is it sustainable?  
   **A:** Margin strength came from efficiencies despite a promotional environment.  **[TGT_3399649_16]**  We've improved fulfillment costs by aligning inventory with demand, reducing split shipments, and enhancing store productivity.  **[TGT_3399649_16]**  These efforts are paying off, and we expect to continue benefiting from them.  **[TGT_3399649_16]** 

3. **Discretionary Comps and Market Share**  
   **Q:** Discretionary comps are still negative; when might they turn positive?  
   **A:** When we offer on-trend, stylish products at great prices, consumers respond.  **[TGT_3399649_21]**  Apparel delivered a **3% comp**, with successes like our **All in Motion** brand and **$25 leggings**.  **[TGT_3399649_21]**  Beauty is a standout, with launches like Blake Lively's **Betty Brown** line—the **most successful haircare launch** at Target.  **[TGT_3399649_21]**  We see opportunities in Home with affordable items, and over time, categories like Home will strengthen as purchase cycles renew.  **[TGT_3399649_21]** 

4. **Consumer Behavior and Guidance**  
   **Q:** How do you reconcile strong Q2 guidance but lowered same-store sales outlook?  
   **A:** The consumer remains resilient but choiceful.  **[TGT_3399649_14]**  Our Q2 performance was at the high end due to getting newness and value right.  **[TGT_3399649_14]**  Looking ahead, we're prudent given more uncertainty, but guidance is still centered on growth.  **[TGT_3399649_14]**  We're excited about **Back-to-School**, **Halloween**, and holiday seasons and will continue to play offense.  **[TGT_3399649_14]** 

5. **Price Investments and Elasticity**  
   **Q:** Are price investments effective, and can price positioning improve further?  
   **A:** Consumers have reacted positively to price investments on **5,000 frequently purchased items**.  **[TGT_3399649_19]**  Beyond that, Target Circle members receive personalized offers, and our own brands offer great value.  **[TGT_3399649_19]**  It's a combination of these efforts that strengthen guest relationships and provide value in this environment.  **[TGT_3399649_19]** 

6. **Target Circle Penetration and Same-Day Delivery Growth**  
   **Q:** Will Target Circle penetration and same-day delivery growth improve sales?  
   **A:** We're pleased with **Circle 360 same-day delivery** and **Drive Up**, both growing **almost 14%**.  **[TGT_3399649_20]**  Users of these services spend more at Target, both online and in-store.  **[TGT_3399649_20]**  During **July Circle Week**, we added **2 million new Circle members**, and Drive Up was a **$2 billion** business in Q2.  **[TGT_3399649_20]**  We see opportunities to expand these programs over time.  **[TGT_3399649_20]** 

7. **Expectations for Food & Beverage Mix**  
   **Q:** What's the long-term outlook for Food & Beverage?  
   **A:** We see significant growth opportunity in Food & Beverage.  **[TGT_3399649_22]**  Emphasizing affordability with **5,000 price reductions**, introducing **over 150 new own-brand products** and **500 new national brand products**, and focusing on convenience through **Drive Up** and **same-day delivery**, which saw **double-digit growth** in Q2, will drive this growth.  **[TGT_3399649_22]** 

8. **Forecasting Business and Consumer Volatility**  
   **Q:** How do you forecast amid consumer volatility?  
   **A:** We consider various factors, including seasonal revenues, trends versus prior years, and current consumer behaviors.  **[TGT_3399649_17]**  We've factored these variables into our outlook for the period and quarter.  **[TGT_3399649_17]** 

9. **Back-to-School and Discretionary Comps**  
   **Q:** How is the consumer behaving during Back-to-School, and when will discretionary comps improve?  
   **A:** We're well-prepared for Back-to-School and holiday seasons, offering a great physical and digital experience.  **[TGT_3399649_18]**  We'll continue to monitor consumer behavior, but when we provide on-trend products at great value, we see positive responses.  **[TGT_3399649_18]** **[TGT_3399649_21]** 

38480bc8ae7cdd3234e44370f8a30534398422b378c5df2e2c5825ce4ef477f6

**Quarterly guidance for Q4 2025:**
- **Comparable sales**: around flat  **[TGT_3409567_14]**  (lowered from 0% to 2%  **[TGT_3399649_12]** )  
- **GAAP and adjusted EPS**: $1.85 to $2.45  **[TGT_3409567_14]**  (lowered from $2.10 to $2.40  **[TGT_3399649_12]** )  
- **Inventory Shrink Impact**: approximately flat  **[TGT_3409567_14]**  (no prior guidance)

**Annual guidance for FY 2025:**
- **Comparable sales**: slightly negative  **[TGT_3409567_14]**  (lowered from 0% to 2%  **[TGT_3399649_12]** )  
- **GAAP and adjusted EPS**: $8.30 to $8.90  **[TGT_3409567_14]**  (lowered from $9.00 to $9.70  **[TGT_3399649_12]** )  
- **Capital Expenditures (CapEx)**: $4 billion to $5 billion  **[TGT_3409567_14]**  (no prior guidance)  
- **After-Tax Return on Invested Capital (ROIC)**: 15.9%  **[TGT_3409567_14]**  (no prior guidance)  

5848c64db8099eadd1d640ab692ae9e2dd700bedaf9c89a9622a12c115bc8634

| Name              | Start Date | End Date | Reason for Change |
|-------------------|------------|----------|-------------------|
| Ernst & Young LLP | 1931  **[0000027419-24-000032_tgt-20240203.htm:46]**    | Present  | Current auditor   |

f0b148bc6e146bc5910fc9351b77044201bd26360f09deb26d68f32203bcb903

382698af6b7eeaba9510363d9f26472b7302f09d29fdbab0f4fdb7c2ebbba961

- Total Revenue: $25,668 million (+1% YoY)  **[0000027419-24-000179_tgt-20241102.htm:1]**   
- Home Furnishings & Décor: $4,185 million (**-5% YoY**)  **[0000027419-24-000179_tgt-20241102.htm:5]**   
- Other Revenue: $292 million (**+28% YoY**)  **[0000027419-24-000179_tgt-20241102.htm:5]**   
- Operating Income (EBIT): $1,168 million (**-11% YoY**)  **[0000027419-24-000179_tgt-20241102.htm:1]**   
- Net Income: $854 million (**-12% YoY**)  **[0000027419-24-000179_tgt-20241102.htm:1]**   
- Diluted EPS: $1.85 (**-12% YoY**)  **[0000027419-24-000179_tgt-20241102.htm:1]**   
- Capital Expenditures (CapEx): $655 million (**-87% YoY**)  **[0000027419-24-000179_tgt-20241102.htm:3]**   
- Dividend Payments: $516 million (**-74% YoY**)  **[0000027419-24-000179_tgt-20241102.htm:3]**   

24e5d37e5d8714b7f85e7be88800b534193cfedd06baf2da326c4278bf41df7c

a98d781b3a54452b1be55ae373f9827cd1e0a379fa83d86cacb6dbc55240f296

| Year         | Amount Due (Millions) | Debt Type         | Interest Rate (%) | % of Total Debt                     |
|--------------|------------------------|-------------------|-------------------|-------------------------------------|
| 2024         | 1,635                 | Current Portion of Long-Term Debt | N/A               | 10.2% = (1,635 / 15,981) * 100 **[0000027419-24-000179_tgt-20241102.htm:2]** **[0000027419-24-000179_tgt-20241102.htm:2]** |
| 2034         | 750                   | Unsecured Debt    | 4.5               | 4.7% = (750 / 15,981) * 100 **[0000027419-24-000179_tgt-20241102.htm:7]** **[0000027419-24-000179_tgt-20241102.htm:2]** |
| N/A          | 13,596                | Other Long-Term Debt | N/A             | 85.1% = (13,596 / 15,981) * 100 **[0000027419-24-000179_tgt-20241102.htm:2]** **[0000027419-24-000179_tgt-20241102.htm:2]** |

2decd5c92cd1cc912797b343a315153db071b0753db84d66a163243eca56b7b4

cad45b7c0f44deedf1f2606471db901887a269b5079a01b74cf05c1d09e9c9e6

1. **Margin Outlook**  
   **Q:** Can you discuss gross margin performance and expectations for 2024?  
   **A:** In Q4 and the full year, we saw nearly **3 percentage points of improvement in gross margin** due to better inventory management, which saved on markdowns and costs associated with past inventory challenges.  **[TGT_3376624_35]**  Freight and transportation costs improved significantly year-over-year, contributing positively to margins.  **[TGT_3376624_35]**  Looking ahead, we expect **continued improvement in gross margin** for next year, with assumptions incorporated into our EPS guidance despite some deleveraging from a cautious top-line outlook.  **[TGT_3376624_35]** 

2. **Sales Guidance and Comps**  
   **Q:** How will you achieve comps from a 3%-5% decline in Q1 to flat to up 2% for the full year?  
   **A:** As we anniversary strong business from last year in Q1, we expect comps to build throughout 2024.  **[TGT_3376624_29]**  Our growth roadmap includes contributions from new stores—we anticipate **300 new stores generating about $15 billion in incremental revenue over a decade**—remodels, own brands, brand partnerships, and enhancements in our digital and loyalty programs like the new Target Circle.  **[TGT_3376624_29]**  We remain focused on understanding consumer trends to meet their evolving shopping needs.  **[TGT_3376624_29]** 

3. **Market Share Focus**  
   **Q:** How do you view market share performance and plans to recapture share?  
   **A:** We monitor market share closely and are committed to **taking market share** as we move forward.  **[TGT_3376624_37]**  Since before the pandemic, we've added over **$30 billion in revenue** and deepened guest relationships through new capabilities and partnerships.  **[TGT_3376624_37]**  We're focused on driving top-line growth across all aspects of our portfolio, including apparel, home, food and beverage, beauty, physical stores, and digital channels.  **[TGT_3376624_37]** 

4. **Shrink and Inventory Losses**  
   **Q:** Can you provide more color on shrink results and its impact on sales?  
   **A:** We're seeing solid progress on shrink, with greater awareness at national, state, and local levels.  **[TGT_3376624_30]**  Our teams have worked hard to ensure a safe experience for guests and team members.  **[TGT_3376624_30]**  Our guidance expects shrink to be **flat year-over-year**, and we'll continue to learn and adapt as we move through the year.  **[TGT_3376624_30]** 

5. **Efficiency Initiatives**  
   **Q:** How should we think about your $500 million in efficiency gains and future expectations?  
   **A:** The **$500 million** achieved this year is a down payment toward the **$2-$3 billion** in efficiencies we expect over time.  **[TGT_3376624_31]**  Benefits came from initiatives like sortation centers and better inventory management, which improved productivity.  **[TGT_3376624_31]**  We plan to continue translating growth into more efficiencies, leveraging opportunities in stores, supply chain, and technology.  **[TGT_3376624_31]** 

6. **Target Circle 360 Pricing**  
   **Q:** Is the $49 price for Target Circle 360 introductory, and what sets it apart from other loyalty programs?  
   **A:** The **$49 is an introductory promotional price** for Target Circle 360.  **[TGT_3376624_32]**  For our cardholders, the $49 price will be evergreen, offering added value.  **[TGT_3376624_32]**  Target Circle 360 provides same-day delivery in less than an hour, access to Shipt marketplace benefits, and all the deals and personalized rewards of the base Target Circle program, focusing on value and ease for our **100 million members**.  **[TGT_3376624_32]** 

7. **Traffic and Ticket Expectations**  
   **Q:** What are your expectations for traffic and average ticket amid a value-focused consumer environment?  
   **A:** While we won't break out specific figures for ticket versus traffic, we're seeing a moderation of inflation, which is beneficial for consumers.  **[TGT_3376624_33]**  Some ticket pressure is expected, but we view this positively as it may lead to share-of-wallet recovery in discretionary categories.  **[TGT_3376624_33]** 

8. **Store Formats and Food Offering**  
   **Q:** How do you assess returns on small-box stores versus larger formats, and what's the role of food in bigger stores?  
   **A:** We're pleased with returns from both small and large stores.  **[TGT_3376624_34]**  Moving forward, we'll lean into larger-format stores to bring the full Target experience, including an expanded **food and beverage offering**.  **[TGT_3376624_34]**  Small stores have helped us enter new markets, connect with college students, and improve assortment segmentation.  **[TGT_3376624_34]** 

9. **Roundel Growth and Credit Trends**  
   **Q:** Will growth in Roundel offset any pressure on credit, and how is credit performance?  
   **A:** We've seen an expected return to normal in credit metrics, with some year-over-year softness.  **[TGT_3376624_33]**  However, this has been offset by the **incredible growth in Roundel**, contributing **$1.5 billion in total value**.  **[TGT_3376624_33]**  We expect Roundel's growth to continue, benefiting both revenue and gross margin.  **[TGT_3376624_33]** 

10. **Assortment Strategy and Partnerships**  
    **Q:** How are you addressing store layout and premium offerings through partnerships?  
    **A:** We listen to our guests to improve store layouts and assortments.  **[TGT_3376624_36]**  Partnerships like those with Ulta Beauty and Apple are guest-led, offering both value and premium products.  **[TGT_3376624_36]**  Our goal is to meet guest needs across a wide range of occasions, introducing brands like **Deal Worthy** for value shoppers while providing premium options through collaborations.  **[TGT_3376624_36]** 

df671317e63729d930470bcedf254cb00e71d763ff9bfa745a7c844ea76468f0

- **Target is focused on both top-line growth and profitability**, with a **laser focus on improving traffic, building the top line, and expanding profitability**. They are not satisfied with current top-line performance and are committed to improving it.  **[TGT_3367297_19]**
- **Sequential improvement in traffic**, with **traffic improving quarter-over-quarter at a slightly faster rate than the top line did**. The company is excited about investments to turn traffic back in their favor over time.  **[TGT_3367297_21]**
- **Strong commitment to long-term growth initiatives**, with capital expenditures of **$3 to $4 billion planned for next year**, reflecting continued investment in growth-driving areas. They are pleased with the **almost $5 billion of investments this year** and the returns they will drive.  **[TGT_3367297_17]**

dfbc3a8ee76fd39b7a9b96df0973a2bdcfc1f2205faa8eafd3ca59d84e64eef5

- Target **expects to return to positive comparable sales growth in the second quarter**, driven by investments in **great assortments**, **value**, and a **great guest experience**.  **[TGT_3390498_16]**
- **Inventory levels are down 7%**, leading to **operational efficiencies** and **stronger in-stock positions**, which is the desired outcome for improved margins.  **[TGT_3390498_20]**
- **Price investments** are part of the company's strategy to enhance value for customers; first-quarter profits were slightly **ahead of expectations**, reinforcing **confidence in achieving full-year financial targets**.  **[TGT_3390498_21]**

ea8b54ba2f490df663fd2314df29d85a94a00c6f98707f484c69f58a48b34625

- **Target has added over $30 billion in revenue growth since pre-pandemic levels**, deepening guest relationships and enhancing capabilities and partnerships, positioning the company as an even more relevant retailer for consumers in the years to come.  **[TGT_3376624_37]**
- Management is **razor-focused on taking market share** across virtually every aspect of their portfolio, including apparel, home, food and beverage, beauty, essentials, physical stores, and digital channels, indicating strong growth opportunities ahead.  **[TGT_3376624_37]**
- Target is committed to driving **top-line growth** over the next ten years to reward shareholders by increasing traffic to stores and online, demonstrating long-term strategic planning for sustained growth.  **[TGT_3376624_37]**

1d82a02f4f367d70e22f1e947c296d1486b1eec0cbf1aec828d75f060b66f0fa

1. **Price Investments and Guidance**  
   **Q:** How are price investments impacting guidance?  
   **A:** Management stated that the price investments were part of their full-year plans, and their outlook for the year remains unchanged. They believe investing in value is essential for success and feel confident about managing costs effectively.  **[TGT_3390498_21]** **[TGT_3390498_14]** 

2. **Margin and Growth Balance**  
   **Q:** Are you balancing margin and top-line growth for 2024?  
   **A:** Management emphasized a balanced approach to performance in 2024, focusing on profitable growth. They are not satisfied until they see positive comparable sales and are encouraged by improvements in traffic, digital growth, and categories like Beauty and Apparel. They're also managing inventory effectively, down **7%** in the quarter.  **[TGT_3390498_13]** 

3. **Sales Trends and Expectations**  
   **Q:** Are sales strong only during promotions?  
   **A:** Management acknowledged this perception but expects trends to turn around in the second quarter, aiming for a return to growth. They believe investments in value and guest experience will drive positive comps over the balance of the year.  **[TGT_3390498_16]** 

4. **Inventory Management and Margins**  
   **Q:** How is inventory positioning affecting margins?  
   **A:** Management feels good about inventory levels, down **7%**, while improving in-stock positions. Efficient inventory management leads to better margins and operational efficiency across the business.  **[TGT_3390498_20]** 

5. **Shrink Improvement and Reinvestment**  
   **Q:** Are shrink improvements funding price investments?  
   **A:** They are pleased with progress on shrink, noting it has flattened and is ahead of expectations. They continue to manage all P&L levers and are reinvesting in value to drive traffic and growth.  **[TGT_3390498_15]** **[TGT_3390498_16]** 

6. **Merchandising Innovation**  
   **Q:** How is newness and innovation impacting sales?  
   **A:** Consumers are responding well to newness, with an acceleration of innovation leading to a **400 basis point** improvement in apparel. The company is introducing new products and brands, expecting this to build throughout the year.  **[TGT_3390498_18]** **[TGT_3390498_19]** 

7. **Private Label Business Momentum**  
   **Q:** What is the momentum in private label brands?  
   **A:** Owned brands are performing well, with targeted investments leading to immediate guest responses. Introducing the right price points in tech accessories under the new brand **dealworthy** drove unit and traffic acceleration.  **[TGT_3390498_19]** 

8. **Other Revenue Streams and Margins**  
   **Q:** Can you provide more detail on other revenue streams?  
   **A:** The Roundel ad business grew over **20%**, adding to both top and bottom lines. Target Plus is also contributing to growth, and these areas are expected to continue being sources of growth.  **[TGT_3390498_22]** 

9. **Quarterly Trends and Weather Impact**  
   **Q:** Did weather affect quarterly sales trends?  
   **A:** Management did not note any significant trends during the quarter due to weather. While acknowledging volatile weather, they feel well-positioned to navigate such disruptions.  **[TGT_3390498_17]** 

f3b431fe210dcab3b82174d311f0f84759afae14d96519b6d495cb64314c3db9

- Target expects a **3% to 5% decline in comparable sales in the first quarter**, indicating weakening consumer demand and potential challenges in driving growth in the near term.  **[TGT_3376624_29]**
- The company anticipates a **step down in operating margin in the first quarter relative to the fourth quarter**, suggesting possible profitability pressures ahead.  **[TGT_3376624_37]**
- **Uncertainties such as changes in credit card fees and the overall uncertain environment**, especially in an election year, may pose risks to Target's growth projections.  **[TGT_3376624_29]**

44f354d6204d1b8fe9d1dedee4cad96e0d0123e6add432ebac91da2963d1ca3d

- **Target's sales trends are heavily reliant on promotional events like Target Circle Week, with softer performance outside these periods, indicating potential weakness in underlying demand.**  **[TGT_3390498_16]**
- **The company is investing in price reductions on over 1,500 items, which may pressure gross margins and suggest competitive pricing pressures or weaker consumer demand.**  **[TGT_3390498_21]**
- **Analysts questioned whether these price investments were a reaction to current sales trends, implying that Target may be facing challenges that could impact its profitability and previously stated guidance.**  **[TGT_3390498_21]**

bbcc7d01f51266aa27f036fc99ab3c6ee3a1efdee312bf73efd743d319411bde

- **Discretionary comparable sales at Target are still negative**, indicating ongoing challenges in non-essential categories. Despite areas of strength like Apparel (which delivered a 3% comp growth  **[TGT_3399649_21]** ), overall discretionary sales are not growing, which could pressure overall sales growth.  **[TGT_3399649_21]**
- **Executives express caution about the outlook for the rest of the year due to consumer uncertainty**, suggesting potential risks to achieving growth targets and possibly only reaching the lower end of their same-store sales guidance.  **[TGT_3399649_14]**
- **There is uncertainty about when discretionary categories will inflect to positive growth**, as the company does not provide a specific timeline, highlighting potential ongoing weakness in these areas.  **[TGT_3399649_21]** **[TGT_3399649_18]**

7ad2d99d2e876ae30e1a66c5f134afec705d95f917c4b99abde83e836e9ceda6

- **Drive Up sales grew over 14% in Q2**, becoming a **$2 billion** business for the quarter, demonstrating the success of Target's convenient fulfillment options that increase customer loyalty and in-store shopping.  **[TGT_3399649_20]**
- Target's Apparel category delivered a **3% comp growth** in Q2, driven by successful own-brand products like **All in Motion** and high-profile launches like Blake Lively's **Blake Brown** haircare line, the most successful haircare launch ever at Target.  **[TGT_3399649_21]**
- Operational efficiencies are improving margins, with significant reductions in fulfillment costs and productivity improvements in stores. Better alignment of inventory with demand has led to reduced shipping costs and overall efficiencies, with these benefits starting to pay off.  **[TGT_3399649_16]**

d0a0838ab18e36ad99c6d164f14904de205e3371efbb7683226c30386985b35f

1. **Profit Impact and Guidance**  
   **Q:** What is the magnitude of unique costs, and how do they affect Q4 guidance?  
   **A:** We experienced additional costs due to prepositioning inventory ahead of a potential port strike, which is unique to this year.  **[TGT_3409567_17]**  Home and apparel decelerated about **4 percentage points** from Q2, impacting profits in Q3.  **[TGT_3409567_17]**  We anticipate ending the year with clean inventory and have guided cautiously for Q4, considering these factors.  **[TGT_3409567_17]**  On the SG&A line, general liability and health care costs increased approximately **1%**.  **[TGT_3409567_17]** 

2. **Discretionary Recovery Outlook**  
   **Q:** Do you expect a better outlook for discretionary categories in 2025?  
   **A:** While discretionary categories remain challenged, we see bright spots, especially in apparel where our "All in Motion" brand is delivering **double-digit growth**.  **[TGT_3409567_19]**  We're optimistic about consumer response to new styles and expect continued improvement as we lean into innovation and value.  **[TGT_3409567_19]**  Discretionary categories will continue to represent up to **50%** of our business, and we'll plan cautiously to stay in step with consumer trends.  **[TGT_3409567_19]** 

3. **Growth Strategies**  
   **Q:** Does Target need to invest differently to drive consistent performance?  
   **A:** We'll continue to focus on being Target, leveraging our unique mix of national and owned brands, and partnerships like our upcoming Black Friday collaboration with Taylor Swift.  **[TGT_3409567_21]**  We're investing in our stores and expanding digital assets, with digital sales up almost **11%** in Q3.  **[TGT_3409567_21]**  Our Circle loyalty program added **3 million** new members in Q3, enhancing customer engagement.  **[TGT_3409567_21]** 

4. **Consumer Behavior and Promotions**  
   **Q:** Are consumers' increasing preference for promotions affecting your Q4 approach?  
   **A:** Consumers have become more resourceful, actively seeking value and promotions for everyday essentials.  **[TGT_3409567_20]**  We'll lean into providing the right value throughout the holiday season, ensuring we stay in step with consumer expectations.  **[TGT_3409567_20]**  This trend is expected to continue into 2025.  **[TGT_3409567_20]** 

5. **Capital Expenditure Plans**  
   **Q:** Is CapEx at 4% of sales now a steady state?  
   **A:** We'll close this year with CapEx at about **$3 billion**, slightly lower than expected.  **[TGT_3409567_23]**  For 2025, we're planning CapEx in the range of **$4 billion to $5 billion**, focusing on new stores, remodels, technology, and supply chain investments.  **[TGT_3409567_23]** 

6. **Inventory Positioning**  
   **Q:** How are you managing inventory risk in Q4?  
   **A:** Inventory is up about **3%** year-over-year, positioning us well for the holiday season.  **[TGT_3409567_23]**  We're focused on ending the year with clean inventory and have guided Q4 accordingly.  **[TGT_3409567_23]** 

7. **Target Circle Impact**  
   **Q:** Is the Target Circle relaunch impacting costs more than expected?  
   **A:** We're excited about the guest response to Circle 360, adding **3 million** new members.  **[TGT_3409567_24]**  Same-day delivery grew by almost **20%** in the quarter.  **[TGT_3409567_24]**  These investments are accretive to both the top and bottom lines over time.  **[TGT_3409567_24]** 

8. **Supply Chain and One-Time Costs**  
   **Q:** Can you quantify the one-time supply chain impacts in Q3 and Q4?  
   **A:** Unique factors this year, like moving inventory due to the port strike, affected expenses in Q3.  **[TGT_3409567_24]**  We feel we're on the other side of these disruptions now.  **[TGT_3409567_24]**  We'll manage through any lingering effects over time, focusing on efficiency improvements.  **[TGT_3409567_24]** 

a66dc0a6968e67c040bbad949a4e9c036e490d5f3426c9c9a4c95f62f328cf4f

Target Corp (TGT)

Financials