Target (TGT) 5 Mar 242024 Q4 Earnings call transcript

Good morning, everyone, and welcome to our 2024 Financial Community Meeting. I'd like to start by welcoming the investors and others who are attending this meeting in person with us. And of course, we're happy that many, many more of you are attending the meeting remotely. Brian is going to kick off the meeting in a minute, but first, I have a couple of important disclosures.

First, any forward-looking statements that we make this morning are subject to risks and uncertainties, the most important of which are described in our SEC filings. remarks, per to share. today's including financial in earnings adjusted second, we non-GAAP refer measures, And financial presentations Reconciliations most posted measure our directly all on comparable releases, of non-GAAP website. GAAP are measures our Investor included which SEC filings, and to Relations the press are financial in

to turn things to started. With that, Brian I'll it over get

to shared Jill morning, hear Huntington, wait perspective on our and to forward providing can't our of thanks Good several Sylvester Rick I results from for Michael this we top looking for Christina and joining Fiddelke. you Sando, us. We're including and morning, the leaders, Cara Gomez,

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Altogether, for our X.X% rate continue in a modest towards operating moving last goal. year's XXXX, X% from margin we as planning increase we're

translate full to On glance, a of under first both the just bottom GAAP this of of represents our range year $X.XX. line, and midpoint EPS to the expectations X% versus adjusted $X.XX XXXX. On XXXX growth for range

year on XX- mid- I'd a note basis, However, to that last it's given to equivalent to extra had increase a week. that an high XX-week single-digit

to first adjusted to year translate X% sales. the Regarding range plans expected $X.XX to an of a full on and decline GAAP for both our EPS comparable $X.XX quarter, X% in

our and deployment. capital to Turning sheet balance

within year, expect billion generation. shares finally, the we recommend of increase to to we'll activity to We A in And and of that a limits approved dividend. in for of another be continue strong year repurchase expect CapEx planning Later $X share another the ratings. year year our for QX, to range our the $X any billion are Board cash while may don't that the able later resume per our we Middle in in

to entire As for Officer out to close, honor your the with in years. Target X.X finance. I and call been last team pause my the Financial Chief serve colleagues a thank an ready I want to to particular get as It's

have to as you be grateful been, day. leadership, Just successor the your every for and I bring incredibly my I'm will confident work integrity, discipline passion

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said sustain our build a of of can are together can't for be set Thank working leaders. Target. to earlier, fortunate foundation I accomplish the you. we great what at and decade profitable with in I'm and we growth As wait operations to shape, as already strong see I another

for to Now I'll Brian it turn closing some over remarks.

you. thank Michael,

to with this questions, take are we can your your started get mind I get As imagine ready some the I might morning. on of questions

First, and is points drive broadly. get outlined Target will are This the they the map consumers for The greater confident profitable U.S. where We're with guests answer gains. to to traffic, value, shared today that market more enough to work map road help share our current road and meet difference strengths, ways growth, we and we've consumers even updates ease back puts in capabilities are us new sales relevance, core growth? long-term absolutely. of to our

improvement up on to last Another question might building keep be, put you profit the can Target year.

I'm And margin a operating does move what over rate you're back it durability of our our billion brings You guidance. our nearly year savings long-term of that horizons and time? billion ongoing X% shareholders we the our in sure this giving us efficiency mean as fast just from growth, on emphasis improvement our expectations additional for business income efforts, in to model. $X.X us Ultimately, towards our goal. start asking, in this far outpacing and realistic heard More multiyear efficiency our operating $X XXXX for cost on than for goals Michael,

source point, of progress Again, right share our to made and that shifting as decades. I'm of returns business momentum and decades. the almost is that's for you Simply do well guessing consumers it XXXX, as per shareholder to of returns while earnings defining over that's we heard top our investing map I'm The the the know set to up has doubled. important us on and in than XX%, from with most been we year priority in ending more But our over an From for shareholder our business, our improving noticed list XXXX at profit way put, this capital later resume priorities deliver annual by you you time. been surest last share a Michael. our for year. the strategies dividend outstanding capabilities since this grew We revenue potentially the growth of repurchase, road performance and know

in for there's perform lot we the control but fueling know As well who last environment, operating investors will investments can't financial drive we that you've seen consumers, you've in reward efforts. are and are performance. decade, We business those That's the why if plans the we putting eagerness a our market grow, be decisions in their charge seen and our of ambition. are team's morning. our last the our road on importantly, that reflects It step execute decade. highlight to that work to in in It's with map and will assets our inspiring the how to next in capabilities in more and we've how ways built consumers and decade plan us shopping this we're that the

from because like unique all multi-category and one above end, and position global said can our brand brand our it's Strength replicate our of no to experiences stores us, team. power put Target. difficult the competitive our to [indiscernible] are a our signature options, to a before, it our partnerships, fulfillment digital that's comprehensive together position, portfolio, all, it own We've

who members team through a grow to lane But and talented and and have to everyone is led dedicated the mistakes, Target from time. time. committed Target team, keep the era next go team XXX,XXX our the and will Our check determined C-suite of make at leadership leading no

Now to forward Christina, can we look hearing questions. we I'll to take Cara on and me your stage Michael from back join you. so ask

transition from taking our We questions into now audience. will

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going why we up, start don't are Hands here? right

Stanley. My Morgan on Gutman discipline. the first Simeon is question from buying

muscle the of this lot Target So you last go so? of just discretionary environment to makes you you've or products. over think on the Or new its developed and we'll some profit back? year a see Do reacted

Christina, great make can I way done the start. global we've teams the a think sure And buy country. to across we evolving are to about talk we you goods work with place sourcing the our that's

the for you Thank Yes. question.

last to of years through We And unprecedented. last flexibility couple over have been plus. the opportunity has X.X really over the agility significantly more living quite been years our we've been and evolved infuse model. What into the has

innovation, So were. flexibility our own brands, placing in most an where newness, we saw bought But about, the excited trends that of we XXXX, sure we created intention that wanted make with also on the in things were business to we we model. bets the

in less ease environment. dual able categories levers a And We the But production those down-trending less introduce of led this so operate manage overall, having sourcing just inventory. to domestic in to also we by capabilities, bought and more swifter buying to to clarity were through certainly how diversification backup. within country operations,

into increased So important things led the we're to and as trend based buy flexibility well in quickly open need and in categories on reserve stocks, are manyfold that like using and did being to we in as able spend other we And seeing our to that what flexibility X in working. we apparel, are where have had lower significantly able significantly really that things matter. well chase basically years paying really get into only we manage the that we've the haven't it's increase our to off. market. we're Not buy as receipts levels things levers that on to we're levers it best as the is inventory

is example And at comp. not seen aggregate quarter-by-quarter. visible that, of look the business when acceleration we've you of green perhaps where the totally apparel Our best shoots

the in were Our the comps best the quarter. fourth than in They quarter. better first discretionary were

comp discretionary we that year. to seen plan on XXXX. we've build That's in what the So through acceleration

seasonal make change as key go even do the celebrate had Rick to on that right I as conservative took that XXXX, meet in continue to moments shopping and to sure their we add over discretionary to we that as those of a make as they more to guests into sure certainly our want side. needs of only flexibility I'd Jill's guests to approach Christina, the affordability right we in leaned key in categories, We'll continue seasonal patterns. the more we newness, moments. XXXX continue the Michael. teams adjust

be stores, have like the characterize products, relationships questions. of customers seems we program. it you if that today, a reintroduced leverage the would Circle to I it strategy have with new the were your some remodel through One, introduce X

right and it You those more with XXX points could near-term over strategies. contribute comp, long us And each mid-single-digit of to low of that's have how to a a to lot the you to experience build term? Is think getting that basis question. comp then your a one for those

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of everything track we're revenue. that about components remodels. is deliver those I'm we've provide waterfall you seeing own and stores those over start, continue Michael. We're talked decade, be excited. a continue looking the we're lean ]our for. apart, contributor new newness going a happy those expect brands our we to new we of We into sure and talked they're billion stores And expect good very great guests all to incremental baked about inspiration our plans. We'll invest partnerships you've to got as to XXX go $XX brands, a in the with brand generate certainly about, our And remodels into not really national breaks forward. but Michael major to today long We'll [ providing to returns. those record make to

and benefits XXX an within and around offering Target will hour. Target how program, you same-day card base it of to that program, heard bring excitement home that their about Circle the to from new the circle extend the Cara our As right guests,

and We're So to we've the those overall our about discovery guests. upward key for from of about we digital more and talked play and enhancements each inspiration Roundel. see elements made role. both And excited standpoint a potential Cara one Michael provide in the an ease very

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each growth. to element road for our So going contribute to map is

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you they a decompose reinforcing a just point maybe Yes. by can't I to kind how experience. with that and discovery engaging made. fact work together, It's add strategy And guest circle on the discrete love category of things. that finds Brian that discretionary within our

it hoping it's so of how comes never X plus equals plus together. all X X. And X And equals We're XX. it's plus X X

cadence in to business as little we question asked specifically on move move I we as we see expect XXXX. the on anniversary year remarks, build and You a through in it touched a we so the some last year. a strongest would bit my the as of through QX,

How about right back here.

can them the behind provide when recent your help of And shrink us you Can put understand guys with most [ the blocking Ciccarelli you what sales you results? ]? products any color velocity on Scott happens Truist. more with key

start the topic And I shortage, start happy I'll about think think it's I progress. when I Michael, shrink, on know when with Yes. I'm a mind. about word to everyone's because

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efficiency do get Baker of I assumed Is about talk in that and outlook. over $XXX to this about Davidson. few XXXX million you Mike What the your your down the How that hill is roll next sort that we it Does think linear? year. from wanted of D.A. achieved sort get in years? better? efforts

to start, Well, top I view great can The toward expect down efficiency little of our call were to that that a sortation continued against this the closer get like that a billion out year. to $X we something that progress $X happy line that benefits of And a It's payment centers. Yes. as things I'm that start. deliver to over the teams and time. tough this work billion I'd in a year. highlights

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efficiencies continue seen really there we've step in to And expect growth expect good translate would our we growth our into I time. I the more XXXX. great as into And work teams that and position more I feel about to feel about taking we the team's so over the and XXXX.

Yes. in stores, continue to see year-by-year. priorities build technology We to to opportunities only add a efficiency to supply very I'd map. that setting opportunities chain, leverage approach Michael, measured taking road that in on better

How All year year, about make those right. laser-focused So after we'll on and over delivering they'll we're reset results, build priorities back here. over time. to sure

presentation, with How at willing I Cara Question Because plan introductory do programs, on with price to the to the on mean, Circle hard Danny of the the key think level? would X loyalty an is are Congratulations to the $XX, you HSBC. program. What like price? than new I it's other day some Bretthauer $XX to there? make sustain obviously, delivery same Target compete this other differentiators how with you math out price $XX at and point. be programs the hour entry long

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take leaders home this program and to our many months. want moment just thank team, on working are for this I been Circle the back teams months just and hope and listening of I the have

that put teams bringing effort has entire been have organization the tech forward and today. the Our them supporting this behind

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you It's could had said Greg I up just was, will ISI. -- Evercore Roundel X Michael, be questions. again. One you with Melich

was think XX% last it I year.

we to what about this. you just thinking in traffic. that the guidance, thinking credit are guidance then In the back that and any with Great all all all how that to AUR this heard on Target $XX average the my it going? For tell And year, question is value-focused We are initiatives consumer. hear a is and credit Circle. are goes ticket, offsets products under the given pressure and us other

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Your second memory? question, Greg, refresh my

Traffic.

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consumer. it for You've heard the

the of about talk the us one that discretionary of recovery on share of some side heard You've being things. wallet inputs,

because we good And so pressure U.S. we're thing to pleased that it's think for see ticket a consumer. the

Sandler. Yruma, Ed Piper

much locations, to that then of box suburban Would large X and typical urban boxes it You kind sounds decade of and like what of traditional pivoting understand the small spent last opening kind to ostensibly bigger stores, we portfolio stores, areas. you're boxes, of kind of of looks of back small love dynamic? boxes? about to role these think like? some Have urban some you And been pleased food larger in in should with look the as the returns given how the you these the changes

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we So areas. of pipeline opportunities as you as to some we stores, our new recognize going look full-size extend bring our into best expand Target we've at there. will seen offering. the couple for $X see consumer brands the progress there more proximity, talked forward, and over our And Rick beverage lot that, continue of a goods out of part like Gather us about & brand strength food Good $X there's of last and many aren't you years the adding packaged the of and of a and for billion and in tracking the food in are beverage industry, trading billion who

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be of returns do want just in some in past. market can share the volume you we're we, the moving cases, areas of pick more some to to seeing It offering. trade about food pipeline. into excited will areas these with we're So smaller where going And we Michael, a because There and up we're be many about competed in talk trade broader will the larger-sized haven't stores. be incremental stores. our

best returns brings opportunity really right feel thing if have We And those like the to toolbox know opportunity about as box in center. XX,XXX But fit we urban where are right looks big total. in to of terms with the kind that. good to strongest. stores. forward, Yes, to campus bring for the box closer of a be lean to actually expect to the an we're the clear, great what the that and returns, of to the small flexibility It's our do and going able of back, how can or returns a the foot top like to square specific in bubbling We a we'll be be us at market. step in where that And we in stores that Target there. we it's pipeline look that what's of build college

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you intentional. baby, them early seek Think even lifelong like we relevant Jill in toys, migrate thing very at on a then sure we the stages, Yes. only juniors. touch with to college families video brand we to the we childbirth. certain The in back-to-school then actually add, have life intentional We is in back-to-college at relationship frames. be that time especially heard business our next It's are in make I'd students the really about that consumers' stage. of lives. sure do that then to we course, games presence, then through and/or College very phase our into then, migrate having back with that step every into stays very in making And life and well them and natural strength

So afterwards.

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sales. Absolutely. today. a are digital We -- about shopping influence We talk lot know see consumers we how

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making We are lives their literally better.

we'll But continue on to that's example. build that. So great another

We've questions. couple got right. for a time more All

here. up go Let's

on I 'XX the that, performance assumptions your gross It's Bob minutes Target few for Drbul, margin, Guggenheim the if around year? and full margin share assumptions maybe financial for this your could buckets especially implications, if a you curious rollout wondered detail we for year. spend then QX Securities. just on And in gross the XXX around could the

first We've margin. few is about all conference and it Well, this Michael, had to the the time today, gross surprise. minutes last this a question of made the is we've our way a

we as year inventory X theme of QX Excited And by of to we we improvement the this there's points of in get because saw I and of margin. were unpacking We'll, the ago. consistent that some the management, start what bit question always. the were in some to a year. think gross gross QX, percentage just costs can of inventory saw I had in the of year, the years lot and little shy recovery and a margin saved part we couple Better broader what challenges a themes of we with associated markdowns

big basis, improvement. source year-over-year a on a that's So of

back a XXXX from basis, Within a in much to better is there freight levels, cost another place source year-over-year a not all the and significant to, improvement. transportation on today way but of perspective,

the also we tune right think, in I points addition, quarter and see chain the from and of, In to the year. digital benefit the XX basis for supply direction

managed And fewer tailwind being from on better and have productive business little of a being brown basis. bit of boxes our combination a as box levels been brown year-over-year that's shipped more inventory with a

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target our to every guests Target for value Target Circle we've I Circle right doorstep X% for program about you're in proposition the right proposition with think value and and to delivered card got and growth. the of day, looking meet if loyalty you. When more free Target XXX is we your a through

stronger that All about of relevance is growth. in

does start it described us little continues And from so get to the Up, serve a Target about the Up to P&L it in-store of growth. I'm standpoint lens to XX% again, the But time we spend before, time guests, costs It be right using when than we've true. about through more a line it guests They Target of we think P&L, an most the if excited Drive And Circle order bit a decisions. more Drive and the trip. to the thereafter. XX% is at

drives And what with and decisions so value we're think we growth making most in total. the

Okay. Go back here.

on Financial the Tigress Congratulations Feinseth, Partners. X morning. I this great out Ivan results questions. have

is and store the target, food store. like, layout the like about my on way thinking in of side, like but local the Cara, yet the example, for left in on is side remodel, First, other all cookware

some cookware to looking food, I the dish need, I'm find And sometimes do I may when I'm to purchasing the need cook.

As an example.

products. premium that brand, high where information get a outside much to other take to going will using carry you premium you're adding say, stores? product Shipt you then of your let's do customer your the do they're but decide those how customers, other value is do competitors go are in And within store? see? bring of to a some Second you are to because premium in how on buying areas would yourself buying what far third, see Shipt partnerships that using going And that you from How then retailers? And premium level there priced you in information what partnership, food a go point customers if are priced of the using,

lot a there. There's

don't we talk Christina, build of how about with you start learning the don't So you that some And Cara, why why partnerships? around have assortments? we

Absolutely.

look Circle think at a we I XXX, as what so of could add range are introduction to of absolutely the partnerships And looking like about benefits. wide Target

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answer More and prices build questions. how on some specifically assortment your we premium to of

needs a shopping across that of wide goal meeting range are occasions. we guests' our make is Our to sure

look so right? about and And for we describe this innovate we spaces especially need us We to [indiscernible] spaces at talk heard you -- look against. when white , unmet

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their so options really we value for sure make just can budgets. So meet all they have consumers that

Beauty, with premium which side, flip the do really Ulta we On is well beauty.

category, about. able us we've do needed build partnership more a which say are almost guest in really all beauty, that the by years guests to the don't where than our be based a in which and to for across to shoppers trips wash. that on for needs and service do happy $X for mass really, lot on the say, this them. they insight fine, has unmet shop shop all and us allowed premium. in service And it's we And And that body shop both. known to And beauty that works to to Target item. for unique They Ulta, for a across we the we're with growth, solution we to And start want category. And given opportunity I'll where spend need the the serve whatever is way, spend portfolio of this us -- on $XXX the the that's I freedom the my to

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JPMorgan. Horvers, Chris

X have questions. So I

just first quarter second the going your seasonality the the implying was the relative in as think in And a the trip, the share just making fourth think step target anything on Do And and not think down not The how power quarter the imply in you're the margin think seemed to first the is forward? the getting to my fourth food like you that quarter, look Do quarter, COVID the value then for first just it's performance at do box. as pump? recapturing in think resonating it's to that of that how the do question share. the you business, case? you focused operating or question, about so consumers and fourth you you of it give about it's about you're from quarter you either more back there so unique Michael,

don't wrap you second and with with up the Michael, question. half, I'll first Chris' why start

Yes.

line, approach there's quarter. quarter, in but anniversary, pressure as that's source differences on at top is think the a of I first there the the the year-over-year So our some thing what in key we and we look cautious first

in deeper As we see year, growth, of pressure get the some subsides. that to we'll back

that's So one, headline on Chris. the that

if a market look on from entire to Chris, every in share can be I we're we as week everyone taking just across assure last not market market focused go but of to very way step And last here And year, the share And very standpoint, back single years. billions a portfolio. we've at dollars we way prepandemic, all I forward. at billions share back, granular the the and the go added I'll several going of growth. look our revenue

those billion. guests and I partnerships. us way. consumers going added features. with a we've our guide the are be to to relationship deepened along relevant And think, $XX and years more retailer even over deepened We've for and more Michael, for to partner And guests come. We've capabilities

stores continue focused now way know drive but the year driving shareholders. that's the to the top to best not XX store are our and our because to we next to over next even sure So we more years, site are very that's reward make we a visit just company right to growth traffic line

standpoint, market we for across continued the because that's pathway growth, we'll look talk from we be work we beverage Rick portfolio, road critically and as going that see every to it's share and growth. go leading digital and or and virtually important And week and razor-focused at forward. map standpoint significant work and the beauty know absolutely are apparel home stores of quarter is know here sitting single to aspect our food a about or is essential every that on every taking Jill for it's And we and doing market it physical a we share a opportunities our whether there today, whether are

much. person you video from Thanks appreciate us joined quarter through report. We us who conference. I who the So forward have Those first in of to and seeing earnings hearing today. joined the during our and you everyone look so you

so you much. thank So

for joining Thank you us.