Target Corporation (NYSE:TGT) Q2 2023 Earnings Call Transcript

We design, we create, we source, we build assortments that – where we can control a lot of those elements. And we’ve introduced a lot of newness whether you think about even in the last quarter, taking advantage of the hot trends with family tumblers and introducing that and bedding that in Hearth & Hand. We have just relaunched our own brand Threshold, which is our signature home brand with updated aesthetics and great price points and new branding. We continue to lean on opportunities. You’ll see us launch a kitchenware brand later this quarter which we’re really excited about for its value, but incredible quality and durability. But beyond those opportunities to introduce innovation, it’s really taking advantage of the opportunities where guests can do more in one store at Target, and that happens during those seasonal times, where we can leverage both the strength of Food & Beverage as well as home or apparel to complete the trip.

And back-to-school, back-to-college, as Michael mentioned, is a terrific time for us to showcase the strength of our portfolio. So, we’ll keep doing what we’re doing. We’re leaning into different categories, but we’re planning appropriately so that we can be responsive in the market.

Michael Fiddelke: And Oliver, on traffic, as you know, we don’t break out a separate traffic forecast. And so kind of the build that goes into our top line guide is embedded in all the things that underlie it. But a couple of thoughts that one, I’ll just reiterate from my comments, we were pleased with the sequential improvement in July in the quarter, and we saw traffic improve at a slightly faster rate than dollars did as we saw that improvement. And then if you zoom all the way back out versus 2019, if you look at the first six months of this year compared to 2019, we’ve got almost well over 20% higher traffic coming to our business than we were pre-pandemic. That translates to $170 million or so more guests interactions with Target in store and online. And so the deeper guest engagement we’ve built is evidenced by our traffic growth over time, critically important to our prospects going forward.

Brian Cornell: To tie those two questions together. During the balance of the year, you’ll continue to see us lean into seasonal moments. We know those are very important moments for our guests. Those are traffic-driving moments for Target. And to Christina’s point, will combine great newness with affordability throughout those seasons. If you’re in our stores today or looking at target.com, you’re seeing us lean into this back-to-school season with great affordability. We’ll continue to do that as we enter the Halloween season, get ready for the holidays, combining that great Target newness with great affordability that meet the needs of our guests. So we’ll be cautious as we plan for the back half of the year, but we’ll lean into those big seasonal moments where we know the guest expects Target to be there to meet their needs.

Oliver Chen: Brian, one follow-up. Inclusivity has always been important to Target as well as thinking about stakeholders. What are your thoughts in terms of appealing to the broad array of customers going forward and strategies there, particularly around LGBTQIA+? Thanks a lot.

Brian Cornell: Oliver, at the heart of our purpose is our commitment to bring joy to all the families we serve. And that really is all families. So we want to make sure Target is that happy place for all of our guests, a place where they can recharge and enjoy those shopping experiences, and you should expect to see us continue to do that over the years to come.

Oliver Chen: Best regards. Thanks a lot.

Brian Cornell: Thank you.

Operator: Thank you. Our next question is from Michael Lasser with UBS. You may go ahead.