Q2 2024 Target Corp Earnings Call

August 21, 2024

Unknown Executive: along with our outlook and priorities for the third quarter and remainder of the year.

Unknown Executive: along with our outlook and priorities for the third quarter and remainder of the year. Following their remarks, we'll open the phone lines for a question and answer session. This morning we're joined on this conference call by investors and others who will be listening to our comments via webcast. Following the call, Michael and I will be available to answer your follow-up questions. And finally, as a reminder, any forward-looking statements that we make this morning are subject to risks and uncertainties, including those described in this morning's press release and in our most recently filed 10K.

Brian Cornell: along with our outlook and priorities for the third quarter and remainder of the year.

Quarter and remainder of the year.

Unknown Executive: Following their remarks, we'll open the phone lines for a question and answer.

Unknown Executive: Following their remarks, we'll open the phone lines for a question and answer session.

Unknown Executive: Following their remarks, we'll open the phone lines for a question-and-answer session.

Unknown Executive: Following their remarks, we'll open the phone lines for a question and answer session.

Ed Kelly: Ed, I'm going to let Rick talk about some of the trends we're seeing in discretionary categories.

Speaker Change: Following their remarks, we will open the phone lines for a question and answer session.

Unknown Executive: This morning we're joined on this conference call by investors and others who will be listening to our comments via webcast.

Brian Cornell: This morning we're joined on this conference call by investors and others who will be listening to our comments via webcast. Following the call, Michael and I will be available to answer your follow-up questions.

Unknown Executive: This morning, we're joined on this conference call by investors and others who will be listening, to our comments via webcast.

Unknown Executive: This morning we're joined on this conference call by investors and others who will be listening to our comments via web.

Speaker Change: This morning, we're joined on this conference call by investors and others, who will be listening to our comments via webcast. Following the call Michael and I will be available to answer your follow up questions and.

Unknown Executive: Following the call, Michael and I will be available to answer your follow-up questions.

Unknown Executive: And finally, as a reminder, any forward-looking statements that we make this morning are subject to risks and uncertainties, including those described in this morning's press release and in our most recently filed 10K.

Brian Cornell: And finally, as a reminder, any forward-looking statements that we make this morning are subject to risks and uncertainties, including those described in this morning's press release and in our most recently filed 10-K. Also in these remarks, we refer to non-GAAP financial measures, including adjusted earnings per share. Reconciliation of all non-GAAP numbers to the most directly comparable GAAP number are included in this morning's press release, which is posted on our Investor Relations website.

Unknown Executive: And finally, as a reminder, any forward-looking statements that we make this morning are subject, to risks and uncertainties, including those described in this morning's earnings press release and in our most recently filed 10-K. Also in these remarks, we refer to non-GAAP financial measures, including adjusted earnings, per share.

And finally as a reminder, any forward looking statements that we make this morning are subject to risks and uncertainties, including those described in this morning's earnings press release and in our most recently filed 10-K.

Unknown Executive: Also in these remarks, we refer to non-gap financial measures, including adjusted earnings per share.

Unknown Executive: Also in these remarks, we refer to non-gap financial measures, including adjusted earnings per share. Reconciliation of all non-gap numbers to the most directly comparable gap number are included in this morning's press release, which is posted on our investor relations website.

Unknown Executive: Also, in these remarks, we refer to non-GAAP financial measures, including adjusted earnings.

Also in these remarks, we refer to non-GAAP financial measures, including adjusted earnings per share.

Unknown Executive: Reconciliations of all non-GAAP numbers to the most directly comparable GAAP number are included in this morning's press release, which is posted on our Investor Relations website.

Unknown Executive: Reconciliation of all non-gap numbers to the most directly comparable gap number are included in this morning's press release, which is posted on our investor relations website.

Speaker Change: Reconciliations of all non-GAAP numbers to the most directly comparable GAAP number are included in this mornings press release, which is posted on our Investor Relations website.

Unknown Executive: Reconciliations of all non-GAAP numbers to the most directly comparable GAAP number are, included in this morning's press release, which is posted on our Investor Relations website.

Brian Cornell: With that, I'll turn it over to Brian for his thoughts on the second quarter and his priorities for the third quarter and beyond.

Brian Cornell: With that, I'll turn it over to Brian for his thoughts on the second quarter and his priorities for the third quarter and beyond. Brian? Thanks, Sean, and good morning, everyone.

Brian Cornell: With that, I'll turn it over to Brian for his thoughts on the second quarter and his priorities for the third quarter and beyond.

Unknown Executive: With that, I'll turn it over to Brian for his thoughts on the second quarter and his priorities for the third quarter and beyond.

Unknown Executive: With that, I'll turn it over to Brian for his thoughts on the second quarter and his, priorities for the third quarter and beyond.

Speaker Change: With that I'll turn it over to Brian for his thoughts on the second quarter and as priorities for the third quarter and beyond Brian.

John: Brian?

Brian Cornell: Brian?

Brian Cornell: Brian? Thanks, Sean, and good morning, everyone. I'd like to start my remarks today by welcoming Rick Gomez to this call. Following his recent move into the role of Chief Commercial Officer. This change was one of several we announced in June, including Christina Hennington's move into the role of Chief Strategy and Growth Officer and Lisa Ronce's transition into the role of Chief Merchandising Officer of Food, Essentials, and Beauty. Lisa has done a fantastic job leading our marketing team, and I've asked her to remain that role until early 2025. This will provide adequate time for us to complete an external search for her successor before Lisa brings her impressive commercial leadership experience back into the merchandising team.

Unknown Executive: Brian?

Brian: Thanks, John, and good morning, everyone.

Brian: He talked about the strength in apparel and some of the subsets within apparel.

Brian Cornell: Thanks, Sean, and good morning, everyone.

Brian: Thanks, John.

Brian: Thanks, John and good morning, everyone.

Brian Cornell: I'd like to start my remarks today by welcoming Rick Gomez to this call. Following his recent move into the role of chief commercial officer.

Brian Cornell: I'd like to start my remarks today by welcoming Rick Gomez to this call. Following his recent move into the role of chief commercial officer. This change was one of several we announced in June, including Christina Hennington's move into the role of chief strategy and growth officer and Lisa Ronce's transition into the role of chief merchandising officer of food, essentials, and beauty.

Brian: And good morning, everyone.

Brian: I'd like to start my remarks today by welcoming Rick Gomez to this call, following his recent, move into the role of Chief Commercial Officer.

Brian: But we're also seeing green shoots in other areas and we certainly think that over time in categories like home led by kitchen, as these purchase cycles become ones that need to be replaced, you're going to see some strength in those categories.

Brian: I'd like to start my remarks today by welcoming Rick go most of this call.

Brian: I'd like to start my remarks today by welcoming Rick Gomez to this call, following his recent move into the role of Chief Commercial Officer.

Speaker Change: Following his recent move into the role of Chief commercial Officer.

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

Brian Cornell: This change was one of several we announced in June, including Christina Hennington's move into the role of chief strategy and growth officer and Lisa Ronce's transition into the role of chief merchandising officer of food, essentials, and beauty.

Brian: This change was one of several we announced in June, including Christina Heddington's move into the role of Chief Strategy and Growth Officer, and Lisa Ross transition into the role of Chief Merchandising Officer of Food, Essentials and Beauty.

Speaker Change: This change was one of several we announced in June.

Brian: This change was one of several we announced in June, including Christina Hennington's, move into the role of Chief Strategy and Growth Officer, and Lisa Roth's transition into the role of Chief Merchandising Officer of Food, Essentials, and Beauty.

Rick: Sure.

Speaker Change: Including Christina Hennington as move into the role of Chief strategy and growth officer.

Rick: I'd be happy to give a little color commentary to the trends and what's driving those trends.

Speaker Change: And Lisa Roth's transition into the role of Chief merchandising officer of food Essentials and beauty.

Brian Cornell: Lisa has done a fantastic job leading our marketing team, and I've asked her to remain that role until early 2025. This will provide adequate time for us to complete an external search for her successor, before Lisa brings her impressive commercial leadership experience back into the merchandising team.

Brian: Lisa has done a fantastic job leading our marketing team, and I've asked her to remain in that role until early 2025.

Speaker Change: Please has done a fantastic job, leading our marketing team and I have asked her to remain at roll until early 2025.

Brian: Lisa has done a fantastic job leading our marketing team, and I've asked her to remain, in that role until early 2025. This will provide adequate time for us to complete an external search for her successor, before Lisa brings her impressive commercial leadership experience back into the merchandising team.

Brian: This will provide adequate time for us to complete an external search for her successor before Lisa brings her impressive commercial leadership experience back into the merchandising.

Speaker Change: This will provide adequate time for us to complete an external search for her successor.

Speaker Change: Lisa brings for impressive commercial leadership experience back into the merchandising team.

Brian Cornell: These changes follow our January announcement that Michael would move into the pivotal role of our chief operating officer. Michael took on the CFO role just before the pandemic, and he's done an outstanding job leading the company through a period of unprecedented growth and volatility. The search for Michael's replacement as CFO is ongoing, and I share Michael's excitement for the time when he's able to fully focus on his new role leading all of our operational functions.

Brian Cornell: These changes follow our January announcement that Michael would move into the pivotal role of our Chief Operating Officer. Michael took on the CFO role just before the pandemic, and he's done an outstanding job leading the company through a period of unprecedented growth and volatility. The search for Michael's replacement as CFO is ongoing, and I share Michael's excitement for the time when he's able to fully focus on his new role leading all of our operational functions. And of course, we were pleased this month to welcome Amy into the role of Chief Legal and Compliance Officer. During her career, Amy has served in key leadership roles for several Fortune 100 companies, and I'm excited to welcome her to the Target team.

Brian: These changes follow our January announcement that MICO would move into the pivotal role of our Chief Operating Officer.

Speaker Change: These changes follower January announcement that Michael would move into the pivotal role of our Chief operating officer.

Brian: These changes follow our January announcement that Michael would move into the pivotal role, of our Chief Operating Officer. Michael took on the CFO role just before the pandemic, and he's done an outstanding job, leading the company through a period of unprecedented growth and volatility.

Brian Cornell: The search for Michael's replacement as CFO is ongoing, and I share Michael's excitement for the time when he's able to fully focus on his new role leading all of our operational functions.

Brian: Michael took on the CFO role just before the pandemic, and he's done an outstanding job leading the company through a period of unprecedented growth and volatility. The search for Michael's replacement at CFO is ongoing.

Speaker Change: Michael took on the CFO role just before the pandemic and he's done an outstanding job, leading the company through a period of unprecedented growth and volatility.

Brian: The search for Michael's replacement as CFO is ongoing, and I share Michael's excitement, for the time when he's able to fully focus on his new role leading all of our operational functions.

Speaker Change: The search for Michaels replacement as CFO is ongoing.

Brian: And I share Michael's excitement for the time when he's able to fully focus on his new role, leading all of our operational function.

Speaker Change: And I sure Michael excitement for the time, when he's able to fully focus on his new role leading all of our operational functions.

Brian Cornell: And of course, we were pleased this month to welcome Amy to into the role of chief legal and compliance officer. During her career, Amy has served in key leadership roles for several Fortune 100 companies, and I'm excited to welcome her to the target team. Amy is taking the place of Don Lu on our team, as he prepares for his retirement.

Brian: And of course, we were pleased this month to welcome Amy Tu into the role of Chief Legal and Compliance Officer. During her career, Amy has served in key leadership roles for several Fortune 100 companies.

Brian: And of course, we were pleased this month to welcome Amy Tu into the role of Chief Legal, and Compliance Officer. During her career, Amy has served in key leadership roles for several Fortune 100 companies, and, I'm excited to welcome her to the Target team.

Speaker Change: And of course, we were pleased this month to welcome Amy to into the role of Chief legal and compliance officer.

Speaker Change: During her career Amy served in key leadership roles for several fortune 100 companies.

Brian: And I'm excited to welcome her to the Target.

Speaker Change: And I am excited to welcome her to the target team.

Brian Cornell: Amy is taking the place of Don Lu on our team, as he prepares for his retirement. I want to pause and thank Don for his many years of thoughtful and country of the service to Target and our stakeholders. He is an outstanding leader who has served as the trusted partner to me, to our board, and our entire leadership team, turning his tenure here at Target.

Brian: Amy is taking the place of Don Liu on her, as he prepares for his retirement.

Speaker Change: Amy has taken the place of Dawn Lou on our team.

Brian: Amy is taking the place of Don Liu on our team as he prepares for his retirement. I want to pause and thank Don for his many years of thoughtful and conscientious service, to Target and our stakeholders. He is an outstanding leader who has served as a trusted partner to me, to our board, and our entire leadership team during his tenure here at Target.

Speaker Change: He prepares for his retirement.

Brian Cornell: I want to pause and thank Don for his many years of thoughtful and country of the service to target and our stakeholders.

Brian Cornell: I want to pause and thank Don for his many years of thoughtful and country of the service to target and our stakeholders. He is an outstanding leader who has served the trusted partner to me, to our board, and our entire leadership team, turning his tenure here at Target. All of these changes in our team are just the latest evidence of our focus in developing enterprise leaders, ones who go well beyond subject matter expertise, to develop strong leadership skills with a foundation base on a comprehensive understanding of our business, and how we fit into the broader landscape.

Brian: I want to pause to thank Don for his many years of thoughtful and conscientious service to Target and our stakeholders. He is an outstanding leader, who has served as a trusted partner to me, to our board, and our entire leadership team during his tenure here at Target.

Speaker Change: I want to pause to thank Don for his many years of thoughtful and countries of service to target and our stakeholders.

Brian Cornell: He is an outstanding leader who has served the trusted partner to me, to our board, and our entire leadership team, turning his tenure here at Target.

Speaker Change: He is an outstanding leader who.

Speaker Change: Served as a trusted partner to me to our board and our entire leadership team during his tenure here at target.

Brian Cornell: All of these changes in our team are just the latest evidence of our focus in developing enterprise leaders, ones who go well beyond subject matter expertise, to develop strong leadership skills with a foundation base on a comprehensive understanding of our business, and how we fit into the broader landscape. And as you've seen from our second quarter of results, the strength of our entire team was crudely evident in our financial performance, which came in well above our expectations. On the top line, we met our goal of returning to growth, to move well beyond that baseline. More specifically, our Q2 Compil sales grew 2% at the very top end of our guidance range.

Brian: All of these changes in our team are just the latest evidence of our focus on developing enterprise leadership, ones who go well beyond subject matter expertise to develop strong leadership skills with a foundation based on a comprehensive understanding of our business and how we fit into the broader landscape.

Speaker Change: All of these changes on our team are just the latest evidence of our focus on developing enterprise leaders.

Brian: All of these changes on our team are just the latest evidence of our focus on developing, enterprise leaders, ones who go well beyond subject matter expertise to develop strong leadership skills with a foundation based on a comprehensive understanding of our business and how we fit into the broader landscape.

Speaker Change: <unk> will go well beyond subject matter expertise to develop strong leadership skills with a foundation based on a comprehensive understanding of our business and how we fit into the broader landscape.

Brian Cornell: And as you've seen from our second quarter of results, the strength of our entire team was crudely evident in our financial performance, which came in well above our expectations.

Brian Cornell: And as you've seen from our second quarter of results, the strength of our entire team was crudely evident in our financial performance, which came in well above our expectations. On the top line, we met our goal of returning to growth, to move well beyond that baseline More specifically, our Q2 Compil sales grew 2% at the very top end of our guidance range. And on the bottom line for the quarter, our EPS, of $2.57 was well above the high end of our guidance, representing growth of more than 42% over last year.

Brian: And as you've seen from our second quarter results, the strength of our entire team was clearly evident in our financial performance, which came in well above our expectations.

Speaker Change: And as you've seen from our second quarter results the strength of our entire team was clearly evident in our financial performance, which came in well above our expectations.

Brian: And as you've seen from our second quarter results, the strength of our entire team was, clearly evident in our financial performance, which came in well above our expectations.

Brian Cornell: On the top line, we met our goal of returning to growth, to move well beyond that baseline More specifically, our Q2 Compil sales grew 2% at the very top end of our guidance range.

Brian: On the top line, we met our goal of returning to growth, to move well beyond that baseline expectation. More specifically, our Q2 comparable sales grew 2% at the very top end of our guidance. And on the bottom line for the quarter, our EPS of $2.57 was well above the high end of our guidance, representing growth of more than 42% over last year.

Brian: On the top line, we met our goal of returning to growth, but moved well beyond that baseline, expectation. More specifically, our Q2 comp sales grew 2% at the very top end of our guidance range. And on the bottom line for the quarter, our EPS of $2.57 was well above the high end of, our guidance, representing growth of more than 42% over last year.

Speaker Change: On the topline we met our goal of returning to growth but.

Speaker Change: But move well beyond that baseline expectation.

Speaker Change: More specifically our Q2 comparable sales grew 2% at the very top end of our guidance range.

Brian Cornell: And on the bottom line for the quarter, our EPS, of $2.57 was well above the high end of our guidance, representing growth of more than 42% over last year.

Brian Cornell: And on the bottom line for the quarter, our EPS of $2.57 was well above the high end of our guidance, representing growth of more than 42% over last year. Among the drivers or comp sales, we're pleased that our second quarter growth was driven entirely by traffic, reflecting the combined benefits of the multiple guest-focused initiatives we outlined in our financial community meeting back in March. It's also notable that our store and digital channels both saw growth in Q2. Our digital team has done an outstanding job of enhancing our digital experience, and that's showing through and our business results.

And on the bottom line for the quarter, our EPS of $2 57.

Speaker Change: It was well above the high end of our guidance.

Speaker Change: Representing growth of more than 42% over last year.

Brian Cornell: Among the drivers or comp sales, we're pleased that our second quarter growth was driven entirely by traffic, reflecting the combined benefits of the multiple guest-focused initiatives we outlined in our financial community meeting back in March. It's also notable that our store and digital channels both saw growth in Q2. Our digital team has done an outstanding job of enhancing our digital experience, and that's showing through and our business results. We saw high single-digit growth in our digital comps in Q2 and even faster growth in same-day services led by DriveUp and Target Circle 360, both of which grew in the low teens.

Brian: Among the drivers of our comp sales, we're pleased that our second quarter growth was driven entirely by traffic, reflecting the combined benefits of the multiple guest focus initiatives we outlined in our financial community meeting back in March.

Speaker Change: Among the drivers of our comp sales, we're pleased that our second quarter growth was driven entirely by traffic.

Brian: Among the drivers of our comp sales, we're pleased that our second quarter growth was, driven entirely by traffic, reflecting the combined benefits of the multiple guest focus initiatives we outlined in our financial community meeting back in March.

Speaker Change: Reflecting the combined benefits of the multiple guest focus initiatives, we outlined in our financial community meeting back in March.

Brian Cornell: It's also notable that our store and digital channels both saw growth in Q2.

Brian: It's also notable that our store and digital channels both saw growth in Q2. Our digital team has done an outstanding job of enhancing our digital experience and that's showing through in our business results.

Speaker Change: It's also notable that our store and digital channels both saw growth in Q2.

Brian: It's also notable that our store and digital channels both saw growth in Q2.

Brian Cornell: Our digital team has done an outstanding job of enhancing our digital experience, and that's showing through and our business results. We saw high single-digit growth in our digital comps in Q2 and even faster growth in same-day services led by DriveUp and Target Circle 360, both of which grew in the low teens. Same-day services now account for more than two-thirds of our digital sales, with the biggest contribution from DriveUp, which generated sales of more than $2 billion in Q2 and more than $4 billion so far this year.

Speaker Change: Our digital team has done an outstanding job of enhancing our digital experience.

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

Speaker Change: It's showing through in our business results.

Brian Cornell: We saw high single-digit growth in our digital comps in Q2 and even faster growth in same-day services led by DriveUp and Target Circle 360, both of which grew in the low teens. Same-day services now account for more than two-thirds of our digital sales, with the biggest contribution from DriveUp, which generated sales of more than $2 billion in Q2 and more than $4 billion so far this year. Our balanced multi-category merchandising assortment continues to resonate with our guests, as trends strengthened across the board in Q2. And we were particularly encouraged to see discretionary category trends improve for the fourth consecutive quarter.

Brian: We saw high single-digit growth in our digital comps in Q2, and even faster growth in same-day services led by DriveUp and Target Circle 360, both of which grew in the low teens. Day-to-day services now account for more than two-thirds of our digital sales, with the biggest contribution from DriveUp, which generated sales of more than $2 billion in Q2 and more than $4 billion so far this year.

Brian: We saw high single-digit growth in our digital comps in Q2, and even faster growth in same-day, services led by DriveUp and Target Circle 360, both of which grew in the low teens. Same-day services now account for more than two-thirds of our digital sales, with the, biggest contribution from DriveUp, which generated sales of more than $2 billion in Q2 and more than $4 billion so far this year.

Speaker Change: We saw high single digit growth in our digital comps in Q2 and.

Speaker Change: And even faster growth in same day services led by drive up and target circle $3 60.

Speaker Change: Both of which grew in the low teens.

Brian Cornell: Same-day services now account for more than two-thirds of our digital sales, with the biggest contribution from DriveUp, which generated sales of more than $2 billion in Q2 and more than $4 billion so far this year. Our balanced multi-category merchandising assortment continues to resonate with our guests, as trends strengthened across the board in Q2. And we were particularly encouraged to see discretionary category trends improve for the fourth consecutive quarter. In a peril, comp sales grew by more than 3%, marking an improvement of more than 5 percentage points when compared with the first quarter.

Speaker Change: Same day services now account for more than two thirds of our digital sales with the biggest contribution from drive up.

Which generated sales of more than $2 billion in Q2 and.

Speaker Change: And more than $4 billion, so far this year.

Brian Cornell: Our balanced multi-category merchandising assortment continues to resonate with our guests, as trends strengthened across the board in Q2. And we were particularly encouraged to see discretionary category trends improve for the fourth consecutive quarter.

Brian: Our balanced, multi-category merchandising assortment continues to resonate with our guests, as trends strengthened across the board in Q2.

Brian: Our balanced multi-category merchandising assortment continues to resonate with our, guests as trends strengthened across the board in Q2, and we were particularly encouraged to see discretionary category trends improve for the fourth consecutive quarter.

Speaker Change: Our balanced multi category merchandising assortment continues to resonate with our guests as trends strengthened across the board in Q2.

Rick: And what we're seeing in discretionary is when we offer on-trend stylish product at a great price, the consumer responds. And we're seeing that in apparel.

Brian: And we were particularly encouraged to see discretionary category trends improve for the fourth consecutive quarter, in apparel, comp sales grew by more than 3%, marking an improvement of more than five percentage points when compared with the first quarter.

Speaker Change: And we were particularly encouraged to see discretionary category trends improved for the fourth consecutive quarter.

Brian Cornell: In a peril, comp sales grew by more than 3%, marking an improvement of more than 5 percentage points when compared with the first quarter.

Brian Cornell: In a peril, comp sales grew by more than 3%, marking an improvement of more than 5 percentage points when compared with the first quarter. Our apparel team has done a fantastic job of incorporating great design, newness, and value throughout their assortment, most notably in our all-in-motion brand, which delivered growth in the low teens. Beauty was another standout, as the category continued to gain share with the growth of 9% in Q2, on top of double-digit growth a year ago. On the frequency side of our assortment, both our food and beverage and essential categories thought traffic growth in the quarter, as consumers are responding to our offerings in an environment where they are focused on value.

Speaker Change: In apparel comp.

Brian: In apparel, comp sales grew by more than 3%, marking an improvement of more than five percentage, points when compared with the first quarter.

Rick: Apparel delivered a three comp.

Speaker Change: Comp sales grew by more than 3%.

Speaker Change: Marking an improvement of more than five percentage points when compared with the first quarter.

Brian Cornell: Our apparel team has done a fantastic job of incorporating great design, newness, and value throughout their assortment, most notably in our all-in-motion brand, which delivered growth in the low teens. Beauty was another standout, as the category continued to gain share with the growth of 9% in Q2, on top of double-digit growth a year ago. On the frequency side of our assortment, both our food and beverage and essential categories thought traffic growth in the quarter, as consumers are responding to our offerings in an environment where they are focused on value.

Brian: Our apparel team has done a fantastic job of incorporating great design, newness, and value throughout their assortment, most notably in our all in motion brand, which delivered growth in the low teens.

Brian: Our apparel team has done a fantastic job of incorporating great design, newness, and, value throughout their assortment, most notably in our all-in-motion brand, which delivered growth in the low teens.

Speaker Change: Our apparel team has done a fantastic job of incorporating great design newness and value throughout the assortment.

Rick: Some real bright spots was all in motion performance brand where the team did a fantastic job on fabrication, colors, fit, $25 leggings was a fan favorite, and really demonstrated the power of fashion combined with affordability.

Speaker Change: Most notably.

Speaker Change: And our all in motion brand.

Speaker Change: Which delivered growth in the low teens.

Brian Cornell: Beauty was another standout, as the category continued to gain share with the growth of 9% in Q2, on top of double-digit growth a year ago.

Brian: Beauty was another standout as the category continued to gain share with comp growth of 9% in Q2, on top of double digit growth a year ago.

Beauty was another standout as the category continues to gain share with comp growth of 9% in Q2 on top of double digit growth a year ago.

Brian: Beauty was another standout as the category continued to gain share with comp growth of, 9% in Q2, on top of double-digit growth a year ago.

Rick: Beyond that, beauty is also a standout where we see news really resonating with the guest.

Rick: You know, I mentioned in my comments, but it's really exciting to see the success of Blake Lively's new hair care line, Blake Brown.

Rick: We just launched it a few weeks ago and, it is already the most successful hair care launch that we have ever had at Target.

Brian Cornell: On the frequency side of our assortment, both our food and beverage and essential categories thought traffic growth in the quarter, as consumers are responding to our offerings in an environment where they are focused on value.

Brian: On the frequency side of our assortment.

Speaker Change: On the frequency side of our assortment.

Brian: On the frequency side of our assortment, both our food and beverage and essential categories, saw traffic growth in the quarter, as consumers are responding to our offerings in an environment where they're focused on value. Over the summer, we reduced our prices on about 5,000 frequently purchased items in, many markets, and we saw an acceleration in both our unit and dollar sales trends in these businesses.

Brian: Both our food and beverage and essential categories saw traffic growth in the quarters, as consumers are responding to our offerings in an environment where they're focused on value. Over the summer, we reduced our prices on about 5,000 frequently purchased items in many markets. And we saw an acceleration in both our unit and dollar sales trends in these businesses.

Speaker Change: Both our food and beverage and essential categories about traffic growth in the quarter.

As consumers are responding to our offerings in an environment, where they're focused on value.

Brian Cornell: Over the summer, we reduced our prices on about 5,000 frequently purchased items in many markets, and we saw an acceleration in both our unit and dollar sales trends in these businesses. We're also seeing continued momentum in our target circle loyalty platform, following its relaunch in the first quarter. With over 100 million members, we're always happy to welcome new guests who choose to join, and we added more than 2 million new members in the second quarter.

Brian Cornell: Over the summer, we reduced our prices on about 5,000 frequently purchased items in many markets, and we saw an acceleration in both our unit and dollar sales trends in these businesses. We're also seeing continued momentum in our Target Circle loyalty platform, following its relaunch in the first quarter. With over 100 million members, we're always happy to welcome new guests who choose to join, and we added more than 2 million new members in the second quarter. But our aspirations go well beyond growing our membership base. We redesigned Target Circle with a goal of increasing engagement among existing members, and we've already realized the benefits.

Speaker Change: Over the summer we reduced our prices on about 5000 frequently purchased items in many markets.

Speaker Change: And we saw an acceleration in both our unit and dollar sales trends in these businesses.

Brian Cornell: We're also seeing continued momentum in our target circle loyalty platform, following its relaunch in the first quarter.

Brian: We're also seeing continued momentum in our Target Circle loyalty platform following its, relaunch in the first quarter.

Brian: We're also seeing continued momentum in our Target Circle Loyalty pipeline, following its relaunch in the first quarter.

Speaker Change: We're also seeing continued momentum in our target circle loyalty platform.

Speaker Change: Knowing its relaunch in the first quarter.

Brian Cornell: With over 100 million members, we're always happy to welcome new guests who choose to join, and we added more than 2 million new members in the second quarter.

Brian: With over 100 million members, we're always happy to welcome new guests who choose to join.

Brian: With over 100 million members, we're always happy to welcome new guests who choose to, join, and we added more than 2 million new members in the second quarter.

Speaker Change: With over 100 million members, we're always happy to welcome new guests, who choose to join and we added more than 2 million new members in the second quarter.

Brian: And we added more than 2 million new members in the second quarter.

Brian Cornell: But our aspirations go well beyond growing our membership base.

Brian Cornell: But our aspirations go well beyond growing our membership base. We redesigned target circle with a goal of increasing engagement among existing members, and we've already realized the benefits. For example, during our July target circle week, about two-thirds of our transactions were made by target circle members. Beyond the direct benefit of guest engagement with the platform, target circle also helps us gain deep consumer insights, allowing us to extend more personal, customized offers through our Rondale advertising business.

Brian: But our aspirations go well beyond growing our membership base.

Speaker Change: But our aspiration go well beyond growing our membership base.

Brian Cornell: We redesigned target circle with a goal of increasing engagement among existing members, and we've already realized the benefits. For example, during our July target circle week, about two-thirds of our transactions were made by target circle members. Beyond the direct benefit of guest engagement with the platform, target circle also helps us gain deep consumer insights, allowing us to extend more personal, customized offers through our Rondale advertising business.

Brian: We redesigned Target Circle with the goal of increasing engagement among existing members, and we've already realized the benefit. For example, during our July Target Circle week, about two-thirds of our transactions were made by Target Circle members.

Brian: We redesigned Target Circle with the goal of increasing engagement among existing members, and we've already realized the benefits. For example, during our July Target Circle week, about two-thirds of our transactions, were made by Target Circle members. Beyond the direct benefit of guest engagement with the platform, Target Circle also helps, us gain deep consumer insights, allowing us to extend more personal, customized offers through our Rondell advertising business.

Speaker Change: We redesigned target circle with the goal of increasing engagement among existing members.

Speaker Change: And we have already realized the benefits.

Brian Cornell: For example, during our July Target Circle week, about two-thirds of our transactions were made by Target Circle members. Beyond the direct benefit of guest engagement with the platform, Target Circle also helps us gain deep consumer insights, allowing us to extend more personal, customized offers through our Rondale advertising business. Rondell continues to experience rapid growth based on the joint value it creates for both our guests and our vendors. In the second quarter, Rondell delivered double due to growth to the benefit of both gross margin and the other revenue line of our PNL. For the full year, Rondell is expected to grow in the high teens on top of more than 20% growth in 2023.

For example, during our July target Circle week about two thirds of our transactions were made by target circle members.

Brian: Beyond the direct benefit of guest engagement with the platform. Target Circle also helps us gain deep consumer insights, allowing us to extend more personal, customized offers through our Rondell advertising business.

Beyond the direct benefit of guest engagement with the platform.

Speaker Change: Target Circle also helps us gain deep consumer insights, allowing us to extend more personal customized offers through our rondell advertising business.

Brian: Rondell continues to experience rapid growth based on the joint value it creates for both our guests and our vendors.

Brian: Rondell continues to experience rapid growth, based on the joint value it creates for both our guests and our vendors. In the second quarter, Rondell delivered double-digit growth to the benefit of both gross margin and the other revenue line of our P&L.

Brian Cornell: Rondell continues to experience rapid growth based on the joint value it creates for both our guests and our vendors.

Brian Cornell: Rondell continues to experience rapid growth based on the joint value it creates for both our guests and our vendors. In the second quarter, Rondell delivered double due to growth to the benefit of both gross margin and the other revenue line of our PNL. For the full year, Rondell is expected to grow in the high teens on top of more than 20% growth in 2023. Our view remains largely the same as we've been sharing for some time.

Speaker Change: <unk> continues to experience rapid growth based on the joint value creates for both our guests and our vendors.

Brian: In the second quarter, Rondell delivered double-digit growth to the benefit of both gross margin and the other revenue line of our P&L.

Brian Cornell: In the second quarter, Rondell delivered double due to growth to the benefit of both gross margin and the other revenue line of our PNL.

Speaker Change: In the second quarter Rundale delivered double digit growth to the benefit of both gross margin and the other revenue line of our P&L.

Brian: For the full year, Rondell is expected to grow in the high teens on top of more than 20% growth in 2023.

Brian Cornell: For the full year, Rondell is expected to grow in the high teens on top of more than 20% growth in 2023.

Brian: For the full year, Rondell is expected to grow in the high teens, on top of more than 20% growth in 2023.

Speaker Change: For the full year <unk> is expected to grow in the high teens.

Speaker Change: On top of more than 20% growth in 2023.

Brian: As we continue to survey consumers and monitor the external environment, our view remains largely the same, as we've been sharing for some time. Consumers have shown remarkable resilience in the face of multiple challenges over the last several years, and they remain resilient today. Given the significant headwinds they've faced with inflation over the last few years, consumers continue to focus on value as they work hard to manage their household budgets.

Brian: As we continue to survey consumers and monitor the external environment.

Speaker Change: As we continue to survey consumers and monitor the external environment. Our view remains largely the same as we've been sharing for some time.

Brian Cornell: Our view remains largely the same as we've been sharing for some time. Consumers have shown remarkable resilience in the face of multiple challenges over the last several years, and they remain resilient today. Given the significant head wounds they face with inflation over the last few years, consumers continue to focus on value as they work hard to manage their household budgets. And while they continue to turn out and shop around holidays and other seasonal moments, many are delaying purchases until the moment of need. Against that backdrop, our team continue to focus on providing unbeatable value for our guests.

Brian: Our view remains largely the same, as we've been sharing for some time. Consumers have shown remarkable resilience in the face of multiple challenges over the last several years, and they remain resilient today. Given the significant headwinds they've faced with inflation over the last few years.

Brian Cornell: Given the significant head wounds they face with inflation over the last few years, consumers continue to focus on value as they work hard to manage their household budgets.

Brian Cornell: Consumers have shown remarkable resilience in the face of multiple challenges over the last several years and they remain resilient today. Given the significant head wounds they face with inflation over the last few years, consumers continue to focus on value as they work hard to manage their household budgets. And while they continue to turn out and shop around holidays and other seasonal moments, many are delaying purchases until the moment of need. Against that backdrop, our team continue to focus on providing unbeatable value for our guests.

Speaker Change: Consumers have shown remarkable resilience in the face of multiple challenges over the last several years.

Speaker Change: And they remain resilient today.

Brian Cornell: And while they continue to turn out and shop around holidays and other seasonal moments, many are delaying purchases until the moment of need.

Speaker Change: Given the significant headwinds they faced with inflation over the last few years.

Brian: Consumers continue to focus on value as they work hard to manage their household budget, and while they continue to turn out and shop around holidays and other seasonal moments.

Speaker Change: Tumors continue to focus on value as they were.

Speaker Change: Work hard to manage their household budgets.

Brian: And while they continue to turn out and shop around holidays and other seasonal moments, many are delaying purchases until the moment of need.

Speaker Change: And while they continue to turn out and shop around holidays and other seasonal moments many are delaying purchases until the moment of need.

Brian: Many are delaying purchases until the moment of need.

Brian: Against that backdrop, our team continues to focus on providing unbeatable value for our guests.

Brian Cornell: Against that backdrop, our team continue to focus on providing unbeatable value for our guests. And of course, that starts with a focus on low everyday prices, including our recent price reductions on frequently purchased items.

Brian: Against that backdrop, our team continues to focus on providing unbeatable value for our, and of course.

Speaker Change: Against that backdrop, our team continues to focus on providing unbeatable value for our guests.

Brian: And of course, that starts with a focus on low everyday prices, including our recent price reductions on frequently purchased items.

Brian Cornell: But our focus on value only begins with low prices.

Brian Cornell: And of course, that starts with a focus on low everyday prices, including our recent price reductions on frequently purchased items. But our focus on value only begins with low prices. Whether we're highlighting compelling deals for our target circle members, offering an additional 5% savings to our target circle cardholders, designing and sourcing high quality owned brands at compelling prices, or delivering ease and convenience with drive up and target circle 360. Our team is continually working to find more ways to deliver more value for our guests.

Brian Cornell: And of course, that starts with a focus on low everyday prices, including our recent price reductions on frequently purchased items. But our focus on value only begins with low prices. Whether we're highlighting compelling deals for our Target Circle members, offering an additional 5% savings to our Target Circle cardholders, designing and sourcing high quality owned brands at compelling prices, or delivering ease and convenience with Drive Up and Target Circle 360. Our team is continually working to find more ways to deliver more value for our guests.

And of course.

Brian: That starts with a focus on low everyday prices, including our recent price reductions on frequently purchased items.

Speaker Change: That starts with a focus on low everyday prices, including our recent price reductions on frequently purchased items.

Brian: But our focus on value only begins with low price.

Brian: But our focus on value only begins with low prices. Whether we're highlighting compelling deals for our Target Circle members, offering an additional 5% savings to our Target Circle cardholders, designing and sourcing high-quality owned brands at compelling prices, or delivering ease and convenience with Drive Up and Target Circle 360, our team is continually working to find more ways to deliver more value for our guests.

Speaker Change: But our focus on value only begins with low prices.

Brian Cornell: Whether we're highlighting compelling deals for our target circle members, offering an additional 5% savings to our target circle cardholders, designing and sourcing high quality owned brands at compelling prices, or delivering ease and convenience with drive up and target circle 360.

Brian: Whether we're highlighting compelling deals for our Target Circle members, offering an additional 5% savings to our Target Circle cardholders.

Speaker Change: Whether we're highlighting compelling deals for our target circle members offering an additional 5% savings to our target circle cardholders design.

Brian: Designing and sourcing high quality owned brands at compelling prices, for delivering ease and convenience with Drive Up and Target Circle 360.

Speaker Change: Designing and sourcing high quality owned brands at compelling prices, we're delivering ease and convenience with drive up and target circle $3 60.

Brian Cornell: Our team is continually working to find more ways to deliver more value for our guests.

Brian: Our team is continually working to find more ways to deliver more value for our guests.

Speaker Change: Our team is continually working to find more ways to deliver more value for our guests.

Brian: As we look ahead, our team is focused on controlling what we can control.

Brian Cornell: As we look ahead, our team is focused on controlling what we can control.

Brian Cornell: As we look ahead, our team is focused on controlling what we can control. We're committed to staying on offense while maintaining an overall cautious outlook, a stance that has worked well for us over the last few quarters. Throughout the company, we're focused on retail fundamentals and strong execution. This includes our commitment to being in stock and reliable, even as we maintain a prudent inventory position. It also includes our focus on delivering speed and convenience in every fulfillment channel, while providing efficient and friendly service store guests in every store every day.

Brian: As we look ahead, our team is focused on controlling what we can control. We're committed to staying on offense, while maintaining an overall cautious outlook, a stance that has worked well for us over the last few quarters.

As we look ahead our team is focused on controlling what we can control.

Brian: We're committed to staying on offense while maintaining an overall cautious outlook, a stance that has worked well for us over the last few quarters.

Brian Cornell: We're committed to staying on offense while maintaining an overall cautious outlook, a stance that has worked well for us over the last few quarters.

Speaker Change: We're committed to staying on offense, while maintaining an overall cautious outlook.

Speaker Change: Stance has worked well for us over the last few quarters.

Brian: Throughout the company, we're focused on retail fundamentals and strong execution. This includes our commitment to being in stock and reliable, even as we maintain a prudent inventory position.

Brian Cornell: Throughout the company, we're focused on retail fundamentals and strong execution. This includes our commitment to being in stock and reliable, even as we maintain a prudent inventory position.

Brian: Throughout the company, we're focused on retail fundamentals and strong execution. This includes our commitment to being in stock and reliable. Even as we maintain a prudent inventory position, It also includes our focus on delivering speed and convenience in every Fathoma channel while providing efficient and friendly service to our guests in every store, every day.

Speaker Change: Throughout the company, we're focus on retail fundamentals and strong execution.

Speaker Change: This includes our commitment to being in stock and reliable.

Speaker Change: Even as we maintain our prudent inventory position.

Brian: It also includes our focus on delivering speed and convenience in every fulfillment channel, while providing efficient and friendly service to our guests in every store, every day.

Brian Cornell: It also includes our focus on delivering speed and convenience in every fulfillment channel, while providing efficient and friendly service store guests in every store every day.

Speaker Change: It also includes our focus on delivering speed and convenience and every fulfillment channel, while providing efficient and friendly service to our guests in every store every day.

Brian: We're also looking to build on the momentum we've been seeing in discretionary categories, where trends have already improved significantly. And we see much more opportunity ahead of us.

Brian Cornell: We're also looking to build on the momentum we've been seeing in discretionary categories.

Brian Cornell: We're also looking to build on the momentum we've been seeing in discretionary categories. We're trends have already improved significantly. And we see much more opportunity ahead of us. We're focused on continued expansion of our operating margin rate. As we move back towards and potentially beyond the 6% annual rate we were earning before the pandemic. We're committed to continued discipline capital deployment. Following more than a year of hard work to strengthen our balance sheet, we were pleased to get back to share of purchases in the second quarter.

Brian: We're also looking to build on the momentum we've been seeing in discretionary categories, where trends have already improved. And we see much more opportunity ahead of us.

Speaker Change: We're also looking to build on the momentum we've been seeing in discretionary categories, where trends have already improved significantly.

Brian Cornell: We're trends have already improved significantly. And we see much more opportunity ahead of us.

Brian Cornell: We're trends have already improved significantly. And we see much more opportunity ahead of us. We're focused on continued expansion of our operating margin rate. As we move back towards and potentially beyond the 6% annual rate we were earning before the pandemic. We're committed to continued discipline capital deployment. Following more than a year of hard work to strengthen our balance sheet, we were pleased to get back to share of purchases in the second quarter. And we expect to have continued capacity within our middle A ratings into three and beyond. And of course, we're focused on continued investment in our team in their training, development, pay, and benefits.

Speaker Change: And we see much more opportunity ahead of us.

Brian: We're focused on continued expansion of our operating margin rate as we move back towards and potentially beyond the 6% annual rate we were earning before the pandemic.

Brian Cornell: We're focused on continued expansion of our operating margin rate. As we move back towards and potentially beyond the 6% annual rate we were earning before the pandemic.

Brian: We're focused on continued expansion of our operating margin, as we move back towards and potentially beyond the 6% annual rate we were earning before the pandemic.

Speaker Change: We're focused on continued expansion of our operating margin rate.

Speaker Change: As we move back towards and potentially beyond the 6% annual rate, we were earning before the pandemic.

Brian: We're committed to continued, disciplined capital deployment.

Brian Cornell: We're committed to continued discipline capital deployment.

Brian: We're committed to continued disciplined capital deployment, following more than a year of hard work to strengthen our balance.

Speaker Change: We're committed to continued disciplined capital deployment.

Brian: Following more than a year of hard work to strengthen our balance sheet, we were pleased to get back to share our purchases in the second quarter.

Brian Cornell: Following more than a year of hard work to strengthen our balance sheet, we were pleased to get back to share of purchases in the second quarter.

Speaker Change: Following more than a year of hard work to strengthen our balance sheet. We were pleased to get back to share repurchases in the second quarter.

Brian: We were pleased to get back to share our purchases in the second quarter, and we expect to have continued capacity within our middle A ratings in Q3 and beyond.

Brian: And we expect to have continued capacity within our middle A ratings in Q3 and beyond.

Brian Cornell: And we expect to have continued capacity within our middle A ratings into three and beyond.

Brian Cornell: And we expect to have continued capacity within our middle A ratings into three and beyond. And of course, we're focused on continued investment in our team in their training, development, pay and benefits. To support our team, we're making smart investments in AI technology to make their work easier and more productive, enable them to serve our guests with even greater speed and efficiency. All these efforts are in support of our ultimate goal to deepen the already strong relationship we've established with our guests.

Speaker Change: And we expect to have continued capacity within our middle a ratings in Q3 and beyond.

Brian: And, of course, we're focused on continued investment in our team, in their training, development, pay, and benefits. To support our team, we're making smart investments in AI technology to make their work easier and more productive, enabling them to serve our guests with even greater speed and efficiency.

Brian Cornell: And of course, we're focused on continued investment in our team in their training, development, pay and benefits. To support our team, we're making smart investments in AI technology to make their work easier and more productive, enable them to serve our guests with even greater speed and efficiency.

Brian: And of course, we're focused on continued investment in our, in their training, development, pay, and benefit.

And of course, we're focused on continued investment in our team and their training development pay and benefits.

Brian Cornell: To support our team, we're making smart investments in AI technology to make their work easier and more productive, enabling them to serve our guests with even greater speed and efficiency. All these efforts are in support of our ultimate goal to deepen the already strong relationship we've established with our guests. What was fantastic to see top-line growth in the second quarter, it was even more gratifying that was driven by traffic. As more guests choose to make more trips to Target following unprecedented growth during the pandemic. Altogether, over the first six months of 2024, our guests have already made nearly 1 billion trips to Target, a number that's grown by more than 20% since 2019.

Brian: To support our team, we're making smart investments in AI technology, to make their work easier and more productive, enabled them to serve our guests with even greater speed and efficiency.

Speaker Change: To support our team, we're making smart investments in AI technology to make their work easier and more productive.

Enabling them to serve our guests with even greater speed and efficiency.

Brian: All these efforts are in support of our ultimate goal to deepen the already strong relationship we've established with our guests.

Brian Cornell: All these efforts are in support of our ultimate goal to deepen the already strong relationship we've established with our guests.

Brian: All these efforts are in support of our ultimate goal to deepen the already strong relationship we've established with our guests.

Speaker Change: All of these efforts are in support of our ultimate goal to deepen the already strong relationship we've established with our guests.

Brian: What was fantastic to see top-line growth in the second quarter, it was even more gratifying, that it was driven by traffic, as more guests choose to make more trips to Target, following unprecedented growth during the pandemic.

Brian Cornell: What was fantastic to see top-line growth in the second quarter, it was even more gratifying that was driven by traffic.

Brian Cornell: What was fantastic to see top-line growth in the second quarter, it was even more gratifying that was driven by traffic. As more guests choose to make more trips to target following unprecedented growth during the pandemic. Altogether, over the first six months of 2024, our guests have already made nearly 1 billion trips to target, a number that's grown by more than 20% since 2019. We're grateful for the underlying trust and engagement behind every one of those transactions, and our entire team is focused on delivering continued traffic growth over time.

Brian: What was fantastic to see top line growth in the second quarter, it was even more gratifying that it was driven by traffic, as more guests choose to make more trips to Target following unprecedented growth during the pandemic, all together over the first six months of 2024.

Speaker Change: Well it was fantastic to see topline growth in the second quarter. It was even more gratifying that was driven by traffic.

Brian Cornell: As more guests choose to make more trips to target following unprecedented growth during the pandemic.

Speaker Change: As more guests choose to make more trips to target following unprecedented growth during the pandemic.

Brian Cornell: Altogether, over the first six months of 2024, our guests have already made nearly 1 billion trips to target, a number that's grown by more than 20% since 2019.

Speaker Change: Altogether over the first six months of 2024.

Brian: All together, over the first six months of 2024, our guests have already made nearly, one billion trips to Target, a number that's grown by more than 20% since 2019.

Brian: Our guests have already made nearly one billion trips to Target, a number that's grown by more than 20% since 2019.

Speaker Change: Our guests have already made nearly 1 billion trips to target.

Speaker Change: A number that has grown by more than 20% since 2019.

Brian Cornell: We're grateful for the underlying trust and engagement behind every one of those transactions, and our entire team is focused on delivering continued traffic growth over time.

Brian Cornell: We're grateful for the underlying trust and engagement behind every one of those transactions, and our entire team is focused on delivering continued traffic growth over time. So now, before I turn the call over to Rick, I want to pause and thank our team. Back at our financial community meeting in March, I described how they were united in their commitment to moving from go time to grow time, and they've certainly delivered, and more. In an environment where consumers continue to make meaningful trade-offs, our Q2 results demonstrate the power that comes from the right combination of newness, seasonal relevance, and compelling value.

Brian: We're grateful for the underlying trust and engagement behind every one of those transactions, and our entire team is focused on delivering continued traffic growth over time.

Speaker Change: We're grateful for the underlying trust and engagement behind every one of those transactions and our entire team is focused on delivering continued traffic growth over time.

Brian Cornell: So now, before I turn the call over to Rick, I want to pause and thank our team. Back at our financial community meeting in March, I described how they were united in their commitment to moving from go time to grow time, and they've certainly delivered and more. In an environment where consumers continue to make meaningful trade-offs, our Q2 results demonstrate the power that comes from the right combination of newness, seasonal relevance, and compelling value.

Brian: So now, before I turn the call over to Rick.

Brian: So now, before I turn the call over to Rick, I want to pause and thank our team. Back at our financial community meeting in March, I described how they were united in, their commitment to moving from go-time to grow-time, and they've certainly delivered, and more.

Speaker Change: So now before I turn the call over to Rick I want to pause and thank our team.

Brian: I want to pause and thank our, Back at our financial community meeting in March, I described how they were united in their commitment to moving from go time to grow time, and they've certainly delivered and more, in an environment where consumers continue to make meaningful tradeoffs.

Rick: Back at our financial community meeting in March I described how they were United and their commitment to moving from go time to grow time.

Rick: And they certainly delivered and more.

Brian Cornell: In an environment where consumers continue to make meaningful trade-offs, our Q2 results demonstrate the power that comes from the right combination of newness, seasonal relevance, and compelling value.

Brian: In an environment where consumers continue to make meaningful trade-offs, our Q2 results, demonstrate the power that comes from the right combination of newness, seasonal relevance, and compelling value.

Rick: And in an environment, where consumers continue to make meaningful tradeoffs. Our Q2 results demonstrate the power of that comes from the right combination of newness.

Brian: Our Q2 results demonstrate the power that comes from the right combination of newness, Teasel Relevance and Compelling Value.

Rick: And I think it's just another great example of the consumer is willing, to buy when they find that right combination of on-trend stylish product at an affordable price.

Rick: Relevance and compelling value.

Brian Cornell: Well, that's great to see the team isn't pausing to celebrate.

Brian Cornell: Well, that's great to see the team isn't pausing to celebrate. Rather, they're leaning in as they focus on building additional momentum in the back half of the year and beyond. Our team is the best in retail. Their guests focus and they love to win together, and they're just getting started.

Brian Cornell: Well, that's great to see the team isn't pausing to celebrate. Rather, they're leaning in as they focus on building additional momentum in the back half of the year and beyond. Our team is the best in retail. Their guests focus, and they love to win together, and they're just getting started.

Brian: Well, that's great to see the team isn't pausing to celebrate.

Brian: While that's great to see, the team isn't pausing to celebrate. Rather, they're leaning in, as they focus on building additional momentum in the back, half of the year and beyond.

Speaker Change: Well, that's great to see the team isn't pausing to celebrate.

Brian Cornell: Rather, they're leaning in as they focus on building additional momentum in the back half of the year and beyond.

Brian: Rather, they're leaning in as they focus on building additional momentum in the back half of the year and beyond.

Speaker Change: Rather they are leaning in as they focus on building additional momentum in the back half of the year and beyond.

Brian Cornell: Our team is the best in retail.

Brian: Our team is the best in retail.

Brian: Our team is the best in retail. They're guest-focused, and they love to win, together.

Speaker Change: Our team is the best in retail.

Brian Cornell: Their guests focus and they love to win together, and they're just getting started.

Brian: They're guest focused and they love to win.

Speaker Change: Their guest focused and they love to win together.

Brian: And they're just getting started.

And they're just getting started.

Rick Gomez: With that, I'll welcome Rick to his first earnings call.

Rick Gomez: With that, I'll welcome Rick to his first earnings call. Thanks, Brian, and good morning, everyone. I'm excited to be joining this call today, and I'm looking forward to meeting many of you over time.

Brian Cornell: With that, I'll welcome Rick to his first earnings call.

Rick: With that, I'll welcome Rick to his first earnings call.

Speaker Change: With that I will welcome Rick to his first earnings call.

Rick: Thanks, Brian, and good morning, everyone.

Rick: And even in other businesses, I use home as an example, consumers want to freshen up their home.

Rick Gomez: Thanks, Brian, and good morning, everyone.

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

Brian: Together.

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

Rick: I'm excited to be joining this call today, and I'm looking forward to meeting many of, you over time.

Rick Gomez: I'm excited to be joining this call today, and I'm looking forward to meeting many of you over time.

Rick Gomez: Before we unpack our second quarter results, I'd like to spend some time sharing my priorities as I step into this role, many of which should sound very familiar. First, I want to reinforce the importance of the areas that Christina was focused on, affordability, newness, seasonal relevance, and ease. These are mission critical.

Rick Gomez: Before we unpack our second quarter results, I'd like to spend some time sharing my priorities as I step into this role, many of which should sound very familiar. First, I want to reinforce the importance of the areas that Christina was focused on: affordability, newness, seasonal relevance, and ease. These are mission critical. Under Christina's leadership over the years, we've built an incredible foundation which we can build upon.

Brian: And they're just getting started.

Rick: Before we unpack our second quarter results, I'd like to spend some time sharing my priorities, as I step into this role, many of which should sound very familiar. First, I want to reinforce the importance of the areas that Christina was focused on, – affordability, newness, seasonal relevance, and ease.

Rick: They want to freshen up their look, but they need to do it on the budget. So where we see growth is things like candles, decorative accessories, throw pillows. We're seeing growth there because we're offering an inexpensive way to freshen up the look of your home.

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

Brian: With that, I'll welcome Rick to his first earnings call.

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

Rick Gomez: Under Christina's leadership over the years, we've built an incredible foundation which we can build upon.

Rick: Thanks, Brian, and good morning, everyone.

Rick: I'll give you one of my favorite examples from earlier this year, and it's a collaboration we had with our partners at Authentic Brands, leveraging the Prince brand.

Cristina: First I want to reinforce the importance of the areas that Cristina was focused on affordability newness seasonal relevance and EES. These are mission critical.

Brian: And while that brand has been known for tenants throughout the years, we brought the Prince category and the Prince brand into pickleball with great new apparel, accessories, and rackets.

Brian: And we've created a destination and target for all things pickleball.

Brian: And we know families across the country are enjoying that sport.

Brian: It fits very nicely with, our all-family position.

Rick: I'm excited to be joining this call today, and I'm looking forward to meeting many of you over time.

Rick: These are mission critical.

Rick: Before we unpack our second quarter results, I'd like to spend some time sharing my priorities as I step into this role, many of which should sound very familiar. First, I want to reinforce the importance of the areas that Christina was focused on.

Rick: Under Christina's leadership over the years, we've built an incredible foundation which, we can build upon.

Cristina: Under Christina his leadership over the years, we've built an incredible foundation, which we can build upon.

Rick: I've also worked with the team on three additional principles to govern how we work. First, we'll focus on simplifying processes end-to-end, including how our teams work together, as well as with our external partners, with the goal of driving efficiencies and streamlining how work gets done.

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

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

Speaker Change: I've also worked with the team on three additional principles to govern how we work.

Rick: Affordability, newness, seasonal relevance, and ease, these are mission critical.

Speaker Change: First we will focus on simplifying processes end to end, including how our teams work together as well as with our external partners with a goal of driving efficiencies and streamlining how work gets done we should also be relentless in our pursuit of creativity, bringing innovative ideas to market that are original inspiring and.

Rick: Under Christina's leadership over the years, we've built an incredible foundation, which we can build upon.

Rick: I've also worked with a team on three additional principles to govern how we work. First, we'll focus on simplifying processes end to end, including how our teams work together, as well as with our external partners, with the goal of driving efficiencies and streamlining how work gets done.

Rick Gomez: We should also be relentless in our pursuit of creativity, bringing innovative ideas to market that are original, inspiring, and unmistakably target.

Rick: We should also be relentless in our pursuit of creativity, bringing innovative ideas to market that are original, inspiring, and unmistakably targeted.

Rick: We should also be relentless in our pursuit of creativity, bringing innovative ideas to, market that are original, inspiring, and unmistakably target.

Brian: And it's just one more example of when Target's Target, when we bring great design that's on trend at a great value, we see the guests reacting really positively.

Speaker Change: Unmistakably target in.

Rick Gomez: And finally, we shouldn't be just guest led.

Rick: And finally, we shouldn't be just guest-led.

Speaker Change: And finally, we shouldnt be just guests led we should be consumer obsessed we will do this by consistently listening to what consumers want and need and then working hard to deliver for them.

Rick Gomez: We should be consumer obsessed. We'll do this by consistently listening to what consumers want and need, and then working hard to deliver for them.

Rick: We should be consumer-obsessed. We'll do this by consistently listening to what consumers want and need, and then working, hard to deliver for them.

Rick: We should be consumer-obsessed. We'll do this by consistently listening to what consumers want and need, and then working hard to deliver for them.

Rick Gomez: Next, I'll turn to our view of the consumer, which, as you heard from Brian, has remained largely unchanged for some time.

Rick Gomez: Next, I'll turn to our view of the consumer, which, as you heard from Brian, has remained largely unchanged for some time. American families continue to deal with a lot. These pressures are clearly weighing on them, and they're looking for a refuge from the everyday stress that they're feeling. And yet, while the economic data remains mixed, we see a consumer that is still willing and able to spend. Yes, they're still being choiceful. Yes, they're budget conscious, and yes, they're hunting for deals in everyday value. But they're also willing to shop when they find that right combination of fashion and newness at the right price.

Rick: Next, I'll turn to our view of the consumer, which, as you heard from Brian, has remained, largely unchanged for some time.

Rick: Next, I'll turn to our view of the consumer, which, as you heard from Brian, has remained largely unchanged for some time.

Speaker Change: Next I'll turn to a review of the consumer which as you heard from Brian has remained largely unchanged for some time.

Rick Gomez: American families continue to deal with a lot. These pressures are clearly weighing on them, and they're looking for a refuge from the everyday stress that they're feeling.

Unknown Executive: Case.

Rick: American families continue to deal with a lot. These pressures are clearly weighing on them, and they're looking for a refuge from the everyday stress that they're feeling.

Rick: American families continue to deal with a lot. These pressures are clearly weighing on them, and they're looking for a refuge from the, everyday stress that they're feeling.

Speaker Change: American families continue to deal with a lot. These pressures are clearly weighing on them and they are looking for a refuge for me everyday stress that they are feeling and yet while the economic data remains mixed we see a consumer that is still willing and able to spend yes. They are still being choice full yes, their budget conscious and yes.

Rick: And yet while the economic data remains mixed, we see a consumer that is still willing and able to spend.

Rick Gomez: And yet, while the economic data remains mixed, we see a consumer that is still willing and able to spend.

Rick: And yet while the economic data remains mixed, we see a consumer that is still willing and, able to spend.

Rick: Yes, they're still being choiceful.

Rick Gomez: Yes, they're still being choiceful.

Rick: Yes, they're still being choiceful.

Rick: Yes, they're budget conscious. And yes, they're hunting for deals and everyday value.

Rick Gomez: Yes, they're budget conscious, and yes, they're hunting for deals in everyday value.

Speaker Change: They are hunting for deals and everyday value, but they are also willing to shop when they find that right combination of fashion and newness at the right price. This was on full display in our second quarter results.

Rick: But they're also willing to shop when they find that right combination of fashion and newness at the right price.

Rick Gomez: But they're also willing to shop when they find that right combination of fashion and newness at the right price.

Rick: But they're also willing to shop when they find that right combination of fashion and, newness at the right price.

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

Unknown Executive: Operator, we have time for one final question today.

Rick: This was on full display in our second quarter results. As Brian mentioned, the team was committed to returning to growth this year, and they, did just that in Q2, with comp growth of 2% driven entirely by traffic. Also of note, every one of our core categories saw traffic growth in the quarter.

Unknown Executive: Thank you.

Rick Gomez: Case.

Unknown Executive: Case.

Rick Gomez: This was on full display in our second quarter results. As Brian mentioned, the team was committed to returning to growth this year, and they did just that in Q2, with comp growth of 2% driven entirely by traffic. Also of note, every one of our core categories saw traffic growth in the quarter. Sales from Target Circle 360 grew in the low teens this quarter, adding to our confidence that we have a long runway ahead of us to drive awareness and adoption of this differentiated service. In support of this goal, we recently rolled out a new monthly subscription option for Target Circle 360, allowing guests to get the best of Target delivered same day for just $10.99 per month and only $4.99 per month for students.

Rick: This was on full display in our second quarter results. As Brian mentioned, the team was committed to returning to growth this year, and they did just that in Q2, with comp growth of 2% driven entirely by traffic. Also of note, every one of our core categories saw traffic growth in the quarter.

Corey Tarlowe: Our final question comes from Corey Tarlowe with Jefferies.

Speaker Change: As Brian mentioned the team was committed to returning to growth this year and they did just that in Q2 with comp growth of 2% driven entirely by traffic also of note every one of our core categories, our traffic growth in the quarter.

Unknown Executive: You may go ahead.

Rick Gomez: Sales from target circle 360 grew in the low teens this quarter, adding to our confidence that we have a long runway ahead of us to drive awareness and adoption of this differentiated service.

Rick Gomez: In support of this goal, we recently rolled out a new monthly subscription option for target circle 360, allowing guests to get the best of target delivered same day for just $10.99 per month and only $4.99 per month for students.

Rick: Sales from Target Circle 360 grew in the low teens this quarter, adding to our confidence that we have a long runway ahead of us to drive awareness and adoption of this differentiated service.

Rick: Sales from Target Circle 360 grew in the low teens this quarter, adding to our confidence, that we have a long runway ahead of us to drive awareness and adoption of this differentiated service.

Corey Tarlowe: Good morning, and thank you so much for taking my questions.

Speaker Change: Sales from target Circle 360 grew in the low teens this quarter, adding to our confidence that we have a long runway ahead of us to drive awareness and adoption of this differentiated service and support of this goal. We recently rolled out a new monthly subscription option for target circle 360, allowing guests to get the best of target delivered same day.

Corey Tarlowe: I was wondering if you'd talk a, little bit about your expectations for longer-term mix of food and beverage over time.

Rick: In support of this goal, we recently rolled out a new monthly subscription option for Target Circle 360, allowing guests to get the best of Target delivered same day for just $10.99 per month and only $4.99 per month for students.

Rick: In support of this goal, we recently rolled out a new monthly subscription option for, Target Circle 360, allowing guests to get the best of Target delivered same day for just $10.99 per month and only $4.99 per month for students.

Speaker Change: <unk> for just 10 99 per month, and only 499 per month for students.

Rick Gomez: Within our assortment in Q2, we saw notable areas of strength in both discretionary and frequency categories.

Rick Gomez: Within our assortment in Q2, we saw notable areas of strength in both discretionary and frequency categories. As Brian highlighted, discretionary trends have been improving for a full year now and combine discretionary comps were down only slightly in Q2. This momentum was most evident in our apparel assortment, which delivered low single-digit comp growth, driven by newness and combination with strong everyday value, both in stores and online. Comps were led by a performance category in the low double digits, as guests loved our latest designs and unbeatable prices in our all-emotion brand.

Rick: Within our assortment in Q2, we saw notable areas of strength in both discretionary and frequency categories. As Brian highlighted, discretionary trends have been improving for a full year now, and combined discretionary comps were down only slightly in Q2.

Rick: Within our assortment in Q2, we saw notable areas of strength in both discretionary and, frequency categories. As Brian highlighted, discretionary trends have been improving for a full year now, and, combined discretionary comps were down only slightly in Q2.

Corey Tarlowe: That's a category where you've continued to grow over the last several years, specifically since the pandemic, especially as you've widened the assortment and the number of items that you've carried in that category.

Speaker Change: Within our assortment in Q2, we saw notable areas of strength in both discretionary and frequency categories as Brian highlighted discretionary trends have been improving for a full year now and combined discretionary comps were down only slightly in Q2.

Rick Gomez: As Brian highlighted, discretionary trends have been improving for a full year now and combine discretionary comps were down only slightly in Q2. This momentum was most evident in our apparel assortment, which delivered low single-digit comp growth, driven by newness and combination with strong everyday value, both in stores and online.

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

Brian: Corey, I'm happy to start.

Brian: I'm going to turn it over to Rick, who obviously was leading our food and beverage business.

Brian: We think we have significant, opportunity for growth in that space, led by the unique combination, again, of great national brand partnerships and some really strong owned brands that have connected with the consumer.

Brian: So we think we're still in the early days of building out our food business, but Rick, you've got so much experience in the space.

Rick: This momentum was most evident in our apparel assortment, which delivered low single-digit comp growth driven by newness in combination with strong everyday value, both in stores and online.

Rick: This momentum was most evident in our apparel assortment, which delivered low single-digit, comp growth driven by newness in combination with strong everyday value, both in stores and online.

Rick: Why don't you share some of your thoughts?

Brian: This momentum was most evident in our apparel assortment, which delivered low single digit comp growth driven by newness in combination with strong everyday value both in stores and online.

Rick: I'd be happy to offer a little color commentary on the food and beverage business. As Brian said, we believe there is continued runway for the business to deliver growth, driven by a few things.

Rick: The first is continued emphasis on affordability. As we talked about, the 5,000 price reductions across everyday items was incredibly well-received.

Rick: We'll continue to lean into value on our food and beverage business, not just through everyday pricing, but also through personalized promotions on Circle, as well as with our own brand portfolio, which offers incredible value.

Rick Gomez: Comps were led by a performance category in the low double digits, as guests loved our latest designs and unbeatable prices in our all-emotion brand.

Rick: Comps were led by a performance category in the low double digits, as guests loved our latest designs and unbeatable prices in our all-in-motion brand.

Rick: Comps were led by our performance category in the low double digits, as guests loved, our latest designs and unbeatable prices in our all-in-motion brand.

Rick: The second thing that will continue to lean in to drive growth for food and beverage will be, newness.

Brian: Comps were led by our performance category and the low double digits as guests loved our latest designs and unbeatable prices in our all in motion brand women's apparel saw growth in the low to mid single digits with particular strength in our young contemporary owned brand Wild fable and our recent relaunch of our intimates and sleepwear brand.

Rick: Women's Apparel saw growth in the low to mid-single digits, with particular strength in our young contemporary-owned brand, Wild Fable. And a recent relaunch of our intimate and sleepwear brand, Oddin, has seen a strong guest reaction out of the gate, offering high-quality and comfortable items at compelling price points, like $15 bras and $20 pajamas.

Rick Gomez: Women's apparel saw growth in the low to mid-single digits, with particular strength in our young contemporary brand Wild Fable.

Rick Gomez: Women's apparel saw growth in the low to mid-single digits, with particular strength in our young contemporary brand Wild Fable. In our recent relaunch of our Intiments and Sleepwear brand, Auden, has seen a strong guest reaction out of the gate, offering high quality and comfortable items at compelling price points, like $15 bras and $20 pajama sets.

Rick: Our brand's apparel saw growth in the low to mid single digits, with particular strength, in our young contemporary owned brand, Wild Fable. And a recent relaunch of our intimates and sleepwear brand, Oddin, has seen a strong, guest reaction out of the gate, offering high quality and comfortable items at compelling price points, like $15 bras and $20 pajama sets.

Rick Gomez: In our recent relaunch of our Intiments and Sleepwear brand, Auden, has seen a strong guest reaction out of the gate, offering high quality and comfortable items at compelling price points, like $15 bras and $20 pajama sets.

Rick Gomez: In our recent relaunch of our Intimates and Sleepwear brand, Auden, has seen a strong guest reaction out of the gate, offering high quality and comfortable items at compelling price points, like $15 bras and $20 pajama sets.

Brian: Aten has seen a strong guest reaction out of the gate offering high quality and comfortable items at compelling price points.

Brian: $15 bras and $20 per Jamba sets. These results demonstrate the broad based improvements that we're seeing in apparel a trend we are eager to build on in the coming quarters and years.

Rick Gomez: These results demonstrate the broad-based improvements that we're seeing in apparel, a trend we are eager to build on in the coming quarters and years.

Rick: These results demonstrate the broad-based improvements that we're seeing in apparel, a trend we are eager to build on in the coming quarters and years.

Rick Gomez: While our home and hardline trends remain softer than apparel, we've also seen meaningful trend improvement over the last year.

Rick Gomez: While our home and hardline trends remain softer than apparel, we've also seen meaningful trend improvement over the last year. In home, Q2 comps accelerated by more than 7 percentage points compared with the first quarter, and early results in the back-to-school season are right on plan. Within home, kitchen continues to stand out, based in part on our recent launch of Figment, our high-performance kitchenwear brand. Within hardlines, while sales and electronics are still under pressure, we've been leaning into other categories with stronger demand, driving a comp trend improvement of around 5 percentage points versus Q1, driven by newness in the category.

Rick: While our home and hardline trends remain softer than apparel, we've also seen meaningful trend improvement over the last year.

Rick: While our home and hardline trends remain softer than apparel, we've also seen meaningful, trend improvement over the last year.

Brian: While our home and hard line trends remain softer than apparel. We've also seen meaningful trend improvement over the last year and home Q2 comps accelerated by more than seven percentage points compared with the first quarter and early results in the back to school season are right on plan within home kitchen continues to stand out.

Rick: In home, Q2 comps accelerated by more than 7 percentage points compared with the first quarter, and early results in the back-to-school season are right on plan.

Rick Gomez: In home, Q2 comps accelerated by more than 7 percentage points compared with the first quarter, and early results in the back-to-school season are right on plan.

Rick: In home, Q2 comps accelerated by more than seven percentage points compared with the, first quarter, and early results in the back-to-school season are right on plan.

Rick: Within Home, Kitchen continues to stand out, based in part on our recent launch of Figment, our high-performance kitchenware brand.

Rick Gomez: Within home, kitchen continues to stand out, based in part on our recent launch of Figment, our high-performance kitchenwear brand.

Rick: Within home, Kitchen continues to stand out, based in part on our recent launch of Figment, our high-performance kitchenware brand.

Brian: Based in part on our recent launch of Figment, our high performance kitchen, where brand.

Rick Gomez: Within hardlines, while sales and electronics are still under pressure, we've been leaning into other categories with stronger demand, driving a comp trend improvement of around 5 percentage points versus Q1, driven by newness in the category.

Rick: Within Hardlines, while sales and electronics are still under pressure, we've been leaning into other categories with stronger demand, driving a comp trend improvement of around five percentage points versus Q1, driven by newness in the category.

Rick: Within hardlines, while sales and electronics are still under pressure, we've been leaning, into other categories with stronger demand, driving a comp trend improvement of around five percentage points versus Q1, driven by newness in the category.

Brian: Within hard lines, while sales in electronics are still under pressure, we've been leaning into other categories with stronger demand driving our comp trend improvement of around five percentage points versus Q1, driven by newness in the category.

Rick Gomez: Key growth areas include our affordable outdoor offerings in many markets, like $1 pool noodles and $10 coolers.

Rick Gomez: Key growth areas include our affordable outdoor offerings in many markets, like $1 pool noodles and $10 coolers. Recently, we launched more than 1,000 new items in toys, including over 100 new items in our own brand GiggleScape, which now includes preschool toys, games, puzzles, and an expansion into plush. And in case there was any question of the love for our brand with young shoppers, some of the fastest growing sales and toys are from target-themed items, including plush bullseye dogs, kid-sized target checkout lanes, target branded polypocket toys, target branded, viscer-priced little people, and so much more.

Rick Gomez: Key growth areas include our affordable outdoor offerings in many markets, like $1 pool noodles and $10 coolers. Recently, we launched more than 1,000 new items in toys, including over 100 new items in our own brand, GiggleScape, which now includes preschool toys, games, puzzles, and an expansion into plush. And in case there was any question of the love for our brand with young shoppers, some of the fastest growing sales and toys are from target-themed items, including plush Bullseye dogs, kid-sized Target checkout lanes, Target branded Polly Pocket toys, Target branded, viscer-priced Little People, and so much more.

Rick: Key growth areas include our affordable outdoor offerings in many markets, like $1 pool noodles and $10 coolers.

Rick: Key growth areas include our affordable outdoor offerings in many markets, like $1 pool noodles, and $10 coolers.

Brian: Key growth areas include our affordable outdoor offerings in many markets like $1 pool noodles and $10 coolers.

Rick: Recently, we launched more than 1,000 new items and toys, including over 100 new items, in our own brand, Gigglescape, which now includes preschool toys, games, puzzles, and an expansion into plush.

Rick Gomez: Recently, we launched more than 1,000 new items in toys, including over 100 new items in our own brand GiggleScape, which now includes preschool toys, games, puzzles, and an expansion into plush.

Rick: Recently, we launched more than 1,000 new items and toys, including over 100 new items in our own brand, Gigglescape, which now includes preschool toys, games, puzzles, and an expansion into plush.

Brian: Recently, we launched more than a 1000, new items and toys, including over 100, new items in our own brand Giggle escape, which now includes preschool toys games puzzles and an expansion into plush.

Rick Gomez: And in case there was any question of the love for our brand with young shoppers, some of the fastest growing sales and toys are from target-themed items, including plush bullseye dogs, kid-sized target checkout lanes, target branded polypocket toys, target branded, viscer-priced little people, and so much more.

Rick: And in case there was any question of the love for our brand with young shoppers, some of the fastest growing sales and toys are from Target themed items, including plush bullseye dogs, kid sized Target checkout. Target-branded Polly Pocket Toys, Target-branded Fisher-Price Little People, and so much more.

Rick: And in case there was any question of the love for our brand with young shoppers, some, of the fastest-growing sales in toys are from Target-themed items, including plush bullseye dogs, kid-sized Target checkout lanes, Target-branded Polly Pocket toys, Target-branded Fisher Price little people, and so much more.

Speaker Change: And in case, there was any question of the love for our brand with young shoppers some of the fastest growing sales and toys are from target themed items, including plush bullseye dogs Kid sized target checkout lanes target branded Polly pocket toys target branded Fisher price little people and so much more.

Brian: More.

Rick Gomez: Beauty continues to gain meaningful market share with comp growth in the high single digits in Q2, driven by a balanced combination of new offerings, celebrity brands, and seasonal relevance. This has been the summer of suncare, with guests looking for familiar, affordable options like up-and-up sunscreen, as well as newer trending brands such as Vacation.

Rick Gomez: Beauty continues to gain meaningful market share with comp growth in the high single digits in Q2, driven by a balanced combination of new offerings, celebrity brands, and seasonal relevance. This has been the summer of suncare, with guests looking for familiar, affordable options like Up & Up sunscreen, as well as newer trending brands such as Vacation.

Rick: Beauty continues to gain meaningful market share with comp growth in the high single digits in Q2, driven by a balanced combination of new offerings, celebrity brands, and seasonal relevance.

Rick: Beauty continues to gain meaningful market share with comp growth in the high single, digits in Q2, driven by a balanced combination of new offerings, celebrity brands, and seasonal relevance.

Brian: Beauty continues to gain meaningful market share with comp growth in the high single digits in Q2, driven by a balanced combination of new offerings celebrity brands and seasonal relevance. This has been a summer of Sun care with guests looking for familiar of affordable options like up in up sunscreen as well as newer trending brands such as.

Rick Gomez: This has been the summer of suncare, with guests looking for familiar, affordable options like up-and-up sunscreen, as well as newer trending brands such as Vacation.

Rick: This has been the summer of sun care, with guests looking for familiar, affordable options like Up and Up sunscreen, as well as newer, trending brands such as Vacation.

Rick: This has been the summer of sun care, with guests looking for familiar, affordable options, like Up and Up sunscreen, as well as newer, trending brands such as Vacation.

Rick: Minis have also been a major growth driver, with travel on the rise and consumers looking, for a little bit of affordable indulgence for at-home-to.

Brian: Asian Minis have also been a major growth driver with travel on the rise and consumers looking for a little bit of affordable indulgence for at home too.

Rick: Minis have also been a major growth driver, with travel on the rise and consumers looking for a little bit of affordable indulgence for at-home teens.

Rick: In food, comp sales growth in the low single digits was led by seasonal moments with hundreds of new items across snacking, grilling, and entertaining, with exclusive to Target items like Bubbly's Melted Ice Pop flavor, which quickly grew to be the highest selling item in its category. We help guests celebrate summer with fun new flavors and items.

Rick: In food, comp sales growth in the low single digits was led by seasonal moments, with hundreds, of new items across snacking, grilling, and entertaining, with exclusive-to-Target items like Bubbly's Melted Ice Pop flavor, which quickly grew to be the highest-selling item in its category.

Brian: In food comp sales growth in the low single digits was led by seasonal moments with hundreds of new items across snacking, grilling and entertaining with exclusive to target items like bubbly melted ice pop flavor, which quickly grew to be the highest selling item in its category. We help guests celebrate summer with fund new flavors and items.

Unknown Executive: Ciccarelli, John Mulligan, John Mulligan, John Mulligan, Drbul, Robert Ciccarelli, John Mulligan, John Mulligan, Last.

Rick Gomez: Ciccarelli, John Mulligan, John Mulligan, John Mulligan, Drbul, Robert Ciccarelli, John Mulligan, John Mulligan, Last. In our women's categories, we're leaning into our fall fashion assortment, which includes wardrobe options anchored in head to toe on trend neutrals, and showcasing the disruptive value of core items for just $15. And new this year we are showing out for the game day in a big way with mix and match apparel items in your favorite college team colors to show some school spirit in style.

Rick Gomez: Ciccarelli, John Mulligan, John Mulligan, John Mulligan, Drbul, Robert Ciccarelli, John Mulligan, Last. In our women's categories, we're leaning into our fall fashion assortment, which includes wardrobe options anchored in head to toe on-trend neutrals, and showcasing the disruptive value of core items for just $15. And new this year we are showing out for the game day in a big way with mix and match apparel items in your favorite college team colors to show some school spirit in style. Beyond fall fashion, we know consumers are eager for their apple and pumpkin spice favorites. So we're excited to bring back these fall flavors while introducing some new and trending ones as well.

Rick: We helped guests celebrate summer with fun new flavors and items.

Brian: Yes.

Rick: In addition to seasonal moments, we've also pushed ourselves to rethink assortment strategies that have been tried and true for years. For example, we transitioned our candy aisles, leading into some of the most popular trends like better for you options, including lower sugar treats and wellness candy.

Rick: In addition to seasonal moments, we've also pushed ourselves to rethink assortment strategies, that have been tried and true for years. For example, we transitioned our candy aisles, leading into some of the most popular trends, like better-for-you options, including lower-sugar treats and wellness candies.

Brian: In addition to seasonal moments, we've also pushed ourselves to rethink assortment strategies that have been tried and true for years. For example, we transitioned our candy aisles, leading into some of the most popular trends like better for you options, including lower sugar treats and wellness candies wireless category was already growing these changes raise the.

Rick: While this category was already growing, these changes raised the bar, accelerating comp growth into the double digits.

Rick: While this category was already growing, these changes raised the bar, accelerating comp, growth into the double digits.

Speaker Change: <unk> accelerating comp growth into the double digits.

Rick: In essentials, which also grew in the low single digits overall, sales growth was largely driven by strength in our health category, where protein drinks, powders, and meal supplements are gaining momentum.

Rick: In essentials, which also grew in the low single digits overall, sales growth was largely, driven by strength in our health category, where protein drinks, powders, and meal supplements are gaining momentum.

Speaker Change: In Essentials, which also grew in the low single digit overall sales growth was largely driven by strength in our health category, where protein drinks powders and meal supplements are gaining momentum. Additionally, baby care and essentials continued to do well.

Rick: Additionally, baby care and essentials continue to do well.

Rick: Across categories, our own brands grew faster than the total enterprise, showcasing the, relevance, quality, and value we provide to consumers. In fact, because of our industry-leading design and sourcing capabilities, we are better positioned, to remove unnecessary steps in the process, which allows us to reduce costs and increase speed to market.

Speaker Change: Across categories, our own brands grew faster than the total enterprise showcasing the relevance quality and value we provide to consumers in fact, because of our industry, leading design and sourcing capabilities. We are better positioned to remove unnecessary steps in the process, which allows us to reduce costs and increase speed to market.

Rick: Across categories, our own brands grew faster than the total enterprise, showcasing the relevance, quality, and value we provide to consumers. In fact, because of our industry-leading design and sourcing capabilities, we are better positioned to remove unnecessary steps in the process, which allows us to reduce costs and increase speed to market.

Rick: Throughout the second quarter, Target Circle members took advantage of enticing promotions, particularly during our latest Target Circle Week. In fact, this year's Target Circle Weeks have generated the highest digital traffic of the year so far.

Speaker Change: Throughout the second quarter target Circle members took advantage of enticing promotions, particularly during our latest target circle week. In fact, this year's target circle weeks have generated the highest digital traffic of the year so far.

Rick: As Brian mentioned, we added more than 2 million new Target Circle members in the second quarter, while also adding hundreds of thousands of Target Circle cardholders and Target Circle 360 members. Because of the invaluable insights we gained through Target Circle, we were able to offer four times more personalized offers as compared to a year ago.

As Brian mentioned, we added more than 2 million new target circle members in the second quarter, while also adding hundreds of thousands of target circle cardholders and target circle III 60 members.

Rick: Because of the invaluable insights we gained through Target Circle, we were able to offer, four times more personalized offers as compared to a year ago.

Brian: Because of the invaluable insights we gain through target circle, we were able to offer four times more personalized offers as compared to a year ago.

Rick: And of course, those same insights fuel our Roundell Media Network, which, as Brian mentioned, continues to benefit our business in multiple ways.

Rick: And of course, those same insights fuel our Roundel Media Network, which, as Brian mentioned, continues to benefit our business in multiple ways.

Brian: And of course, those same insights fuel around Dell media network, which as Brian mentioned continues to benefit our business in multiple ways.

Rick: While it's hard to believe that summer is already coming to an end, our focus is quickly turning to fall. This, of course, begins with a continuation of our back-to-school and college seasons, which reach their peak in the front half of Q3. More than 70% of our guests shop us during this time frame, and we have plenty in store for them to start the school year off with success and style.

Rick: While it's hard to believe that summer is already coming to an end, our focus is quickly, turning to fall. This, of course, begins with a continuation of our back-to-school and college seasons, which reach their peak in the front half of Q3. More than 70 percent of our guests shop us during this time frame, and we have plenty, in store for them to start the school year off with success and style.

Speaker Change: While it's hard to believe that summer is already coming to an end. Our focus is quickly turning to fall. This of course begins with a continuation of our back to school and college seasons, which reached their peak in the front half of Q3 more.

Speaker Change: More than 70% of our guests shop us during this timeframe and we have plenty in store for them to start the school year off with success and style.

Rick: Knowing affordability is top of mind for consumers. In many markets this year, we're offering 20 of the most popular school supply items that together are priced under $20, including items like mando-llama crayons for just $0.25, notebooks for $0.50, and $5 backpacks.

Rick: Knowing affordability is top of mind for consumers, in many markets this year, we're offering, 20 of the most popular school supply items that, together, are priced under $20, including items like Mondo Llama crayons for just $0.25, notebooks for $0.50, and $5 backpacks.

Speaker Change: Knowing affordability is top of mind for consumers in many markets. This year, we're offering 20 of the most popular school supply items that together are priced under $20, including items like Mondo Lama crayons, which is 25.

Speaker Change: Notebooks for 50, and $5 backpacks for a college bound gas, we're offering a 20% discount to get their dorm room stocked styled and ready for studying.

Rick: For our college-bound guests, we're offering a 20% discount to get their dorm room stocked, styled, and ready for study.

Rick: For our college-bound guests, we're offering a 20 percent discount to get their dorm room, stocked, styled, and ready for studying.

Rick: And as we do every year, we're acknowledging the true classroom heroes, our, with a special appreciation event offering an additional 20% off must-have supplies.

Rick: And as we do every year, we're acknowledging the true classroom heroes, our teachers, with, a special appreciation event offering an additional 20 percent off must-have supplies.

Speaker Change: And as we do every year, we're acknowledging the true classroom heroes, our teachers with a special appreciation event offering an additional 20% off must have supplies.

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

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

Speaker Change: As the fall season continues we will be introducing more and more newness across our assortment to celebrate all things autumn and our performance category, we're offering new assortments from all emotion, including our first ever women's legging destination with new fabrications and a range of colors sizes and silhouettes to make all bodies look and feel.

Rick: In our performance category, we're offering new assortments from all in motion, including our first ever women's legging destination with new fabrications and a range of colors, sizes and silhouettes to make all bodies look and feel their best.

Rick: In our performance category, we're offering new assortments from All In Motion, including, our first-ever women's legging destination, with new fabrications in a range of colors, sizes, and silhouettes to make all bodies look and feel their best.

Rick: In our women's categories, we're leaning into our fall fashion assortment, which includes, wardrobe options anchored in head-to-toe, on-trend neutrals, and showcasing the disruptive value of core items for just $15.

Speaker Change: Their best.

Rick Gomez: In our women's categories, we're leaning into our fall fashion assortment, which includes wardrobe options anchored in head to toe on trend neutrals, and showcasing the disruptive value of core items for just $15.

Rick: In our women's categories, we're leaning into our fall fashion assortment, which includes wardrobe options, anchored and head to toe on trend, and showcasing the disruptive value of core items for just $15.

Speaker Change: And our women's categories were leaning into our fall fashion assortment, which includes wardrobe options anchored and head to toe on trend neutrals and showcasing the disruptive value of core items for just $15 and new this year, we are showing up for the game day in a big way with mix and match apparel items in your favorite College team color.

Rick Gomez: And new this year we are showing out for the game day in a big way with mix and match apparel items in your favorite college team colors to show some school spirit in style.

Rick: And new this year, we are showing up for the game day in a big way with mix and match apparel items in your favorite college team colors to show some school spirit in style.

Rick: And new this year, we are showing out for the game day in a big way, with mix-and-match, apparel items in your favorite college team colors, to show some school spirit in style.

Speaker Change: To show some school spirit in style.

Rick Gomez: Beyond fall fashion, we know consumers are eager for their apple and pumpkin spice favorites. So we're excited to bring back these fall flavors while introducing some new and trending ones as well. Our fall food assortment will offer more than 150 new own brand items and more than 500 new national brand items ranging from pumpkin donut holes and jack-a-lanored sandwich cookies to pecan pie ice cream and good and gathered turkey stuffing flavored potato chips. From sweet to savory, guests will find all their favorites and be inspired by what will surely become some new favorites too.

Rick: Beyond fall fashion, we know consumers are eager for their apple and pumpkin spice favorites. So we're excited to bring back these fall flavors while introducing some new and trending ones as well.

Rick: Beyond fall fashion, we know consumers are eager for their apple and pumpkin spice favorites, so we're excited to bring back these fall flavors while introducing some new and trendy ones as well.

Rick: Just going into the fall season right now, we have a ton of new products coming, over 150 new owned brand products, over 500 new national brand products, leveraging those flavors that, everybody loves for the fall. I'm talking about pumpkin spice, apple, pecan pie.

Speaker Change: Beyond fall fashion, we know consumers are eager for their Apple and pumpkin Spice favorites. So we're excited to bring back these fall flavors, while introducing some new and trending ones as well.

Rick Gomez: Our fall food assortment will offer more than 150 new own brand items and more than 500 new national brand items ranging from pumpkin donut holes and jack-a-lanored sandwich cookies to pecan pie ice cream and good and gathered turkey stuffing flavored potato chips. From sweet to savory, guests will find all their favorites and be inspired by what will surely become some new favorites too.

Rick Gomez: Our fall food assortment will offer more than 150 new own brand items and more than 500 new national brand items ranging from pumpkin donut holes and jack-a-lantern sandwich cookies to pecan pie ice cream and Good & Gathered turkey stuffing flavored potato chips. From sweet to savory, guests will find all their favorites and be inspired by what will surely become some new favorites, too.

Rick: Our fall food assortment will offer more than 150 new own brand items and more than 500 new national. Ranging from pumpkin donut holes and jack-o-lantern sandwich cookies to pecan pie ice cream and good and gather turkey stuffing flavored potatoes. From sweet to savory, guests will find all their favorites and be inspired by what will surely become some new favorites too.

Rick: Our fall food assortment will offer more than 150 new own brand items and more than 500, new national brand items, ranging from pumpkin donut holes and jack-o'-lantern sandwich cookies to pecan pie ice cream and good and gather turkey stuffing flavored potato chips.

Speaker Change: Our fall food assortment will offer more than 150, new own brand items and more than 500, new national brand items, ranging from pumpkin doughnut holes and jack-o'-lantern sandwich cookies to pecan pie ice cream and good and gather Turkey stuffing flavored potato chips from sweet to savory guests will find all their favorites and be inspired by what will surely be.

Rick: From sweet to savory, guests will find all their favorites and be inspired by what will, surely become some new favorites too.

Speaker Change: <unk>, some new favorites too.

Rick Gomez: And while Halloween may seem far away, our consumer research in early season sales suggests there's a lot of excitement around this year's celebrations.

Rick Gomez: And while Halloween may seem far away, our consumer research in early season sales suggests there's a lot of excitement around this year's celebrations. Last year, social media was ablaze with videos of our eight-foot tall Halloween pumpkin ghoul Lewis. So we had to bring him back this season, along with several new friends, all with their own sassy personalities and catchphrases. We're bringing that own brand love to our costume assortment too. Of course, we're standing tall for all the biggest characters of the season, but we're also seeing an outsized response to our target brand of costumes.

Rick Gomez: And while Halloween may seem far away, our consumer research in early season sales suggests there's a lot of excitement around this year's celebrations. Last year, social media was ablaze with videos of our eight-foot tall Halloween pumpkin ghoul, Lewis. So we had to bring him back this season, along with several new friends, all with their own sassy personalities and catchphrases. We're bringing that own brand love to our costume assortment too. Of course, we're standing tall for all the biggest characters of the season, but we're also seeing an outsized response to our target brand of costumes.

Rick: And while Halloween may seem far away, our consumer research and early season sales suggest there's a lot of excitement around this year's celebration.

Rick: And while Halloween may seem far away, our consumer research and early season sales suggest, there's a lot of excitement around this year's celebrations. Last year, social media was ablaze with videos of our 8-foot-tall Halloween pumpkin ghoul, Louis. So we had to bring him back this season, along with several new friends, all with their own, sassy personalities and catchphrases.

Speaker Change: And while Halloween Macy's faraway, our consumer research and early season sales suggest there is a lot of excitement around this year's celebrations last.

Rick Gomez: Last year, social media was ablaze with videos of our eight-foot tall Halloween pumpkin ghoul Lewis. So we had to bring him back this season, along with several new friends, all with their own sassy personalities and catchphrases.

Rick: Last year, social media was ablaze with videos of our 8-foot-tall Halloween pumpkin ghoul, Louis. So we had to bring him back this season, along with several new friends, all with their own sassy personalities and catchphrases.

Speaker Change: Last year, social media was ablaze with videos of our eight foot tall Halloween Pumpkin GUL Lewis. So we had to bring them back this season, along with several new friends all with their own SaaS personalities and Catchphrases, we're bringing that own brand love to our costume assortment to of course, we are standing tall for all the biggest characters.

Rick Gomez: We're bringing that own brand love to our costume assortment too.

Rick: We're bringing that own brand love to our costume assortment, too.

Rick: We're bringing that own brand love to our costume assortment too.

Rick: Of course, we're standing tall for all the biggest characters of the season, but we're also seeing an outsized response to our target.

Rick Gomez: Of course, we're standing tall for all the biggest characters of the season, but we're also seeing an outsized response to our target brand of costumes.

Rick: Of course, we're standing tall for all the biggest characters of the season, but we're, also seeing an outsized response to our Target-branded costumes.

Speaker Change: The season, but we're also seeing an outsized response to our target branded costumes and with 75% of the Halloween assortment new this year. We are confident guests will see target as the Halloween destination for the season.

Rick: And with 75% of the Halloween assortment new this year, we are confident guests will see Target as the Halloween destination for the.

Rick Gomez: And with 75% of the Halloween assortment new this year, we are confident guests will see target as the Halloween destination for the season.

Rick Gomez: And with 75% of the Halloween assortment new this year, we are confident guests will see target as the Halloween destination for the season. As it turns out, which has come out for more than Halloween, one of the most anticipated films of the year, Universal Pictures Wicked hits theaters this fall, and our assortment will leave guests spellbound with a collection of licensed products that range from toys to apparel to housewares. We have big plans in store, including exclusive items to target, and we'll have more exciting details to share very soon.

Rick Gomez: And with 75% of the Halloween assortment new this year, we are confident guests will see Target as the Halloween destination for the season.

Rick: And with 75% of the Halloween assortment new this year, we are confident guests will see, Target as the Halloween destination for the season.

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

Rick Gomez: As it turns out, which has come out for more than Halloween, one of the most anticipated films of the year, Universal Pictures' Wicked hits theaters this fall, and our assortment will leave guests spellbound with a collection of licensed products that range from toys to apparel to housewares. We have big plans in store, including exclusive items to target, and we'll have more exciting details to share very soon.

Rick: As it turns out, Witches come out for more than Halloween. One of the most anticipated films of the year, Universal Pictures' Wicked, hits theaters this fall.

Rick: As it turns out, Witches come out for more than Halloween.

Speaker Change: As it turns out which has come out for more than Halloween one of the most anticipated films of the year Universal Pictures Wicked hits theaters. This fall and our assortment will leave guests spell bound with a collection of licensed products that range from toys to apparel to housewares, we have big plans in store, including exclude.

Rick: One of the most anticipated films of the year, Universal Pictures' Wicked hits theaters, this fall, and our assortment will leave guests spellbound with a collection of licensed products that range from toys to apparel to housewares.

Rick: And our assortment will leave guests spellbound with a collection of licensed products that range from toys to apparel to house decor.

Rick Gomez: We have big plans in store, including exclusive items to target, and we'll have more exciting details to share very soon.

Rick: We have big plans in store, including exclusive items to Target, and we'll have more exciting details to share very soon.

Rick: We have big plans in store, including exclusive items to Target, and we'll have more exciting, details to share very soon.

Speaker Change: <unk> items that target and we'll have more exciting details to share very soon.

Rick Gomez: And of course, we don't have to wait for a changing of the season to change up our assortment.

Rick Gomez: And of course, we don't have to wait for a changing of the season to change up our assortment. In beauty after years of meaningful investments in cosmetics and skincare offerings, we're investing in all things hair care. New from L'Oreal is the biggest innovation in at-home hair coloring in years, color sonic. This launch is off to a great start and we see big things ahead for this brand. And more recently, on top of our exciting launch of Jennifer Aniston's Lolo V Hair Care line, we launched a new partnership with Celebrity Blake Lively for her exclusive to target line, Blake Brown Hair Care, which quickly became our biggest hair care launch on record. On launch day alone, Blake Brown had the five best selling hair care items at target.

Rick Gomez: And of course, we don't have to wait for a changing of the season to change up our assortment. In beauty, after years of meaningful investments in cosmetics and skincare offerings, we're investing in all things hair care. New from L'Oreal is the biggest innovation in at-home hair coloring in years: Color Sonic. This launch is off to a great start, and we see big things ahead for this brand. And more recently, on top of our exciting launch of Jennifer Aniston's Lolo V Hair Care line, we launched a new partnership with celebrity Blake Lively for her exclusive to Target line, Blake Brown Hair Care, which quickly became our biggest hair care launch on record.

Rick: And of course, we don't have to wait for a changing of the season to change up our assortment, in beauty after years of meaningful investments in cosmetics and skin care.

Rick: And of course, we don't have to wait for a changing of the season to change up our assortment.

Speaker Change: And of course, we don't have to wait for a changing of the season to change up our assortment.

Rick Gomez: In beauty after years of meaningful investments in cosmetics and skincare offerings, we're investing in all things hair care.

Rick: In beauty, after years of meaningful investments in cosmetics and skincare offerings, we're, investing in all things haircare.

Speaker Change: And beauty after years of meaningful investments in cosmetics and skincare offerings, we're investing in all things hair care new from L'oreal is the biggest innovation in at home hair coloring and years color Sonic.

Rick: We're investing in all things hair.

Rick Gomez: New from L'Oreal is the biggest innovation in at-home hair coloring in years, color sonic.

Rick: New from L'Oreal is the biggest innovation in at-home hair coloring in years.

Rick: New from L'Oreal is the biggest innovation in at-home hair coloring in years, ColorSonic.

Rick Gomez: This launch is off to a great start and we see big things ahead for this brand.

Rick: This launch is off to a great start and we see big things ahead for this.

Rick: This launch is off to a great start, and we see big things ahead for this brand.

Speaker Change: This launch is off to a great start and we see big things ahead for this brand.

Rick Gomez: And more recently, on top of our exciting launch of Jennifer Aniston's Lolo V Hair Care line, we launched a new partnership with Celebrity Blake Lively for her exclusive to target line, Blake Brown Hair Care, which quickly became our biggest hair care launch on record. On launch day alone, Blake Brown had the five best selling hair care items at target.

Rick: And more recently, on top of our exciting launch of Jennifer Aniston's Lola V hair care line, we launched a new partnership with celebrity Blake Lively for her exclusive to Target line, Blake Brown hair care, which quickly became our biggest hair care launch on record.

Rick: And more recently, on top of our exciting launch of Jennifer Aniston's Lola V Haircare, line, we launched a new partnership with celebrity Blake Lively for her exclusive-to-Target line, Blake Brown Haircare, which quickly became our biggest haircare launch on record. On launch day alone, Blake Brown had the five best-selling haircare items at Target.

Speaker Change: More recently on top of our exciting launch of Jennifer Aniston Lola V hair care line, we launched a new partnership with celebrity Blake lively for her exclusive to target line Blake Brown hair care, which quickly became our biggest hair care launch on record.

Rick Gomez: On launch day alone, Blake Brown had the five best-selling hair care items at Target.

Rick: On launch day alone, Blake Brown had the five best-selling hair care items, Before I turn the call over to Michael, I want to express my gratitude to the entire Target team.

Speaker Change: On launch day alone Blake Brown had five best selling hair care items at target.

Rick Gomez: Before I turn the call over to Michael, I want to express my gratitude to the entire target team. The past several years have been anything but routine, and this team has handled every change in turn with grace and a commitment to serving the communities in which we operate.

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

Rick: Before I turn the call over to Michael, I want to express my gratitude to the entire, Target team. The past several years have been anything but routine, and this team has handled every, change and turn with grace and a commitment to serving the communities in which we operate.

Speaker Change: Before I turn the call over to Michael I want to express my gratitude to the entire target team.

Rick: The past several years have been anything but routine, and this team has handled every change and turn with grace and a commitment to serving the communities in which we operate.

Michael: The past several years have been anything but routine and this team has handled every change in turn with Grace and our commitment to serving the communities in which we operate thank.

Rick: Thank you, Team Target, for all that you do for our guests and for each other.

Rick Gomez: Thank you, team target, for all that you do, for our guests and for each other.

Rick: Thank you, Team Target, for all that you do for our guests and for each other.

Michael: Thank you team target for all that you do for our guests and for each other with that I'll turn the call over to Michael.

Rick: With that, I'll turn the call over to my.

Michael Fiddelke: With that, I'll turn the call over to Michael.

Michael Fiddelke: With that, I'll turn the call over to Michael. Thanks, Rick.

Michael: With that, I'll turn the call over to Michael.

Michael: Thanks, Rick.

Michael Fiddelke: Thanks, Rick.

Michael: Thanks, Rick.

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

Michael Fiddelke: I'd like to join Brian and welcome you to your first earnings call.

Michael Fiddelke: I'd like to join Brian and welcome you to your first earnings call. I'm excited about all of the long-term growth opportunities we have in front of us, as we work together to deliver more for our guests, for our team, and for our- as Brian mentioned, I'm temporarily wearing two hats right now as I continue in the CFO role while preparing to fully move into the COO role. And while I'm looking forward to the day when I'm only wearing the COO hat, I'm privileged to be surrounded by exceptionally talented leaders and teams that are operating with a guest-first long-term focus that's fuelling our results.

Michael Fiddelke: I'd like to join Brian and welcome you to your first earnings call. I'm excited about all of the long-term growth opportunities we have in front of us, as we work together to deliver more for our guests, for our team, and for our—as Brian mentioned, I'm temporarily wearing two hats right now as I continue in the CFO role while preparing to fully move into the COO role. And while I'm looking forward to the day when I'm only wearing the COO hat, I'm privileged to be surrounded by exceptionally talented leaders and teams that are operating with a guest-first, long-term focus that's fuelling our results.

Michael: I'd like to join Brian in welcoming you to your first earnings call.

Michael: I'm excited about all of the long-term growth opportunities we have in front of us as we, work together to deliver more for our guests, for our team, and for our show.

Rick: That will continue to fuel growth.

Michael Fiddelke: I'm excited about all of the long-term growth opportunities we have in front of us, as we work together to deliver more for our guests, for our team, and for our- as Brian mentioned, I'm temporarily wearing two hats right now as I continue in the CFO role while preparing to fully move into the COO role.

Rick: The last opportunity to continue to drive growth on our food and beverage business is around ease and convenience. Consumers have a lot on their plate, and they're looking for simple solutions.

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

Rick: We're very excited about the continued growth that we're seeing on both drive up as well as same-day delivery, which is achieving double-digit growth in Q2.

Michael: As Brian mentioned, I'm temporarily wearing two hats right now as I continue in the CFO, role while preparing to fully move into the COO role. And while I'm looking forward to the day when I'm only wearing the COO hat, I'm privileged, to be surrounded by exceptionally talented leaders and teams that are operating with a guest-first, long-term focus that's fueling our results.

Rick: We continue to see runway on that going forward.

Unknown Executive: Operator, that concludes our second quarter conference call.

Michael: As Brian mentioned, I'm temporarily wearing two hats right now as I continue in the CFO role while preparing to fully move into the COO role.

Unknown Executive: Appreciate everyone joining us, and we look forward to talking to you again soon.

Michael: As Bryan mentioned I'm temporarily wearing two hats right now as I continue on the CFO role, while preparing to fully move into the overall.

Michael Fiddelke: And while I'm looking forward to the day when I'm only wearing the COO hat, I'm privileged to be surrounded by exceptionally talented leaders and teams that are operating with a guest-first long-term focus that's fuelling our results.

Michael: And while I'm looking forward to the day when I'm only wearing the COO hat, I'm privileged to be surrounded by exceptionally talented leaders and teams that are operating with a guest first long term focus that's fueling our results.

And while Im looking forward to the day when I'm only wearing the CFO hat I'm privileged to be surrounded by exceptionally talented leaders and teams that are operating with our guests first long term focus that's fueling our results.

Michael Fiddelke: Every day, I see their commitment to carrying, growing, and winning together, whether I'm walking a store, a distribution center, or the halls in our headquarters.

Michael Fiddelke: Every day, I see their commitment to carrying, growing, and winning together, whether I'm walking a store, a distribution center, or the halls in our headquarters. There's no doubt in my mind that our team members are the number-one reason that Target is such a special place to work. As we've been highlighting for some time, the operations team is focused on reinforcing retail fundamentals, following an extended period of unprecedented volatility that began more than four years ago. While this effort encompasses many processes and metrics, nothing is more important than staying in stock and being reliable for our guests.

Michael: Every day, I see their commitment to caring, growing, and winning together, whether I'm walking a store, a distribution center, or the halls in our headquarters.

Michael: Every day, I see their commitment to caring, growing, and winning together, whether I'm, walking a store, a distribution center, or the halls in our headquarters.

Michael: Every day I see their commitment to carrying growing and winning together, whether im walking a store a distribution center or the halls and our headquarters there is no doubt in my mind that our team members are the number one reason that target is such a special place to work.

Michael Fiddelke: There's no doubt in my mind that our team members are the number-one reason that target is such a special place to work.

Michael: There's no doubt in my mind that our team members are the number one reason that Target is such a special place.

Michael: There's no doubt in my mind that our team members are the number one reason that Target, is such a special place to work.

Michael Fiddelke: As we've been highlighting for some time, the operations team is focused on reinforcing retail fundamentals, following an extended period of unprecedented volatility that began more than four years ago. While this effort encompasses many processes and metrics, nothing is more important than staying in stock and being reliable for our guests. And while our in-stock measures have been improving rapidly for some time now, we're going to continue our work to improve them even more.

Michael: As we've been highlighting for some time, the operations team is focused on reinforcing retail fundamentals, following an extended period of unprecedented volatility that began more than four years ago. While this effort encompasses many processes and metrics, nothing is more important than staying in stock and being reliable for our, And while our in-stock measures have been improving rapidly for some time now, we're going to continue our work to improve them even more. In the second quarter, total out-of-stocks were more than 500 basis points lower than a year ago.

Michael: As we've been highlighting for some time, the operations team is focused on reinforcing, retail fundamentals following an extended period of unprecedented volatility that began more than four years ago. While this effort encompasses many processes and metrics, nothing is more important than, staying in stock and being reliable for our guests. And while our in-stock measures have been improving rapidly for some time now, we're, going to continue our work to improve them even more.

Speaker Change: As we've been highlighting for some time the operations team is focused on reinforcing retail fundamentals. Following an extended period of unprecedented volatility that began more than four years ago.

Speaker Change: While this effort encompasses many processes and metrics nothing is more important than staying in stock and being reliable for our guests.

Michael Fiddelke: And while our in-stock measures have been improving rapidly for some time now, we're going to continue our work to improve them even more. In the second quarter, total out-of-stocks were more than 500 basis points lower than a year ago. Also important, out-of-stocks on our top items in Q2, the ones with the highest unit velocity, were more than 50% lower than total out-of-stocks and also better than a year ago. Notably, these out-of-stock measures would have been even more favorable if our perishable food distribution facility in Denton, Texas, had not sustained major damage from a severe storm in late May, something I'll return to later in my remarks.

Speaker Change: And while our in stock measures had been improving rapidly for some time now we're going to continue our work to improve them even more.

Michael Fiddelke: In the second quarter, total out-of-stocks were more than 500 basis points lower than a year ago. Also important, out-of-stocks on our top items in Q2, the ones with the highest unit velocity, were more than 50% lower than total out-of-stocks, and also better than a year ago. Notably, these out-of-stock measures would have been even more favorable if our perishable food distribution facility in Denton, Texas had not sustained major damage from a severe storm in late May, something I'll return to later in my remarks.

Michael: In the second quarter, total out-of-stocks were more than 500 basis points lower than, a year ago. Also important, out-of-stocks on our top items in Q2, the ones with the highest unit velocity, were more than 50% lower than total out-of-stocks and also better than a year ago. Notably, these out-of-stock measures would have been even more favorable if our perishable, food distribution facility in Denton, Texas had not sustained major damage from a severe storm in late May, something I'll return to later in my remarks.

Speaker Change: In the second quarter total out of stocks were more than 500 basis points lower than a year ago.

Michael: Also important, out-of-stocks on our top items in Q&A.

Speaker Change: Also important out of stocks on our top items in Q2, the ones with the highest unit velocity, where more than 50% lower than total out of stocks and also better than a year ago.

Michael: The ones with the highest unit veloci- were more than 50% lower than total out-of- and also better than a year ago.

Michael: Notably, these out-of-stock measures would have been even more favorable if our perishable food distribution facility in Denton, Texas, had not sustained major damage from a severe storm in late, Something I'll return to later in my remarks.

Speaker Change: Notably these out of stock measures would have been even more favorable if our perishable food distribution facility in Denton, Texas had not sustained major damage from a severe storm in late May something I'll return to later in my remarks.

Michael Fiddelke: It's also notable that our total inventory investment at the end of Q2 was slightly lower than a year ago, meaning that the out-of-stock improvements we've been seeing are the result of operational improvements, not from simply flooding our network with more inventory. Of course, we're always focused on maintaining the right amount of inventory to deliver on our reliability goals, and we're already growing our inventory and categories where demand is strong. But overall, our business has been able to sustain stronger inventory turns than we've seen historically, something you'd expect to happen, given the gains and sales per store we've seen over the last five years.

Michael Fiddelke: It's also notable that our total inventory investment at the end of Q2 was slightly lower than a year ago, meaning that the out-of-stock improvements we've been seeing are the result of operational improvements, not from simply flooding our network with more inventory. Of course, we're always focused on maintaining the right amount of inventory to deliver on our reliability goals, and we're already growing our inventory and categories where demand is strong. But overall, our business has been able to sustain stronger inventory turns than we've seen historically, something you'd expect to happen given the gains and sales per store we've seen over the last five years.

Michael: It's also notable that our total inventory investment at the end of Q2 was slightly lower than year, meaning that the out-of-stock improvements we've been seeing are the result of operational not from simply flooding our network with more invid.

Michael: It's also notable that our total inventory investment at the end of Q2 was slightly lower, than a year ago, meaning that the out-of-stock improvements we've been seeing are the result of operational improvements, not from simply flooding our network with more inventory.

Speaker Change: It's also notable that our total inventory investment at the end of Q2 was slightly lower than a year ago, meaning that the out of stock improvements. We've been seeing are the result of operational improvements not from simply flooding our network with more inventory.

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

Michael: Of course, we're always focused on maintaining the right amount of inventory to deliver on our reliability goals. And we're already growing our inventory in categories where demand is strong.

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

Speaker Change: Of course, we're always focused on maintaining the right amount of inventory to deliver on our reliability calls and we're already growing our inventory and categories where demand is strong.

Michael: But overall, our business has been able to sustain stronger inventory turns than we've seen historically, something you'd expect to happen given the gains in sales per store we've seen over the last five years.

Speaker Change: But overall, our business has been able to sustain stronger inventory turns than we've seen historically something you'd expect to happen given the gains in sales per store, we've seen over the last five years.

Michael Fiddelke: Another area focused for our team is the store-shopping experience, most notably in the front-end at checkout. With the recent changes we've made to streamline self-checkout, while ensuring we maintain adequate staffing at our full-service lanes, we're seeing notably faster checkout times in our self-service lanes. In addition, with more people using our full-service lanes, our team has been engaging with nearly 15% more guests at checkout compared with last year. And with all of these changes, we've seen a continued substantial improvement in our net promoter scores regarding the purchase experience, with scores related to wait times and interactions at checkout the strongest we've seen in six years.

Michael: Another area of focus for our team is the store shopping experience, most notably in the front end at check. With the recent changes we've made to streamline self-checkout, while ensuring we maintain adequate staffing at our full-service, we're seeing notably faster checkout times in our self-service lane.

Michael: Another area of focus for our team is the store shopping experience, most notably in, the front end at checkout. With the recent changes we've made to streamline self-checkout, while ensuring we maintain, adequate staffing at our full-service lanes, we're seeing notably faster checkout times in our self-service lanes.

Speaker Change: Another area of focus for our team as the store shopping experience most notably in the front end at checkout.

Michael Fiddelke: In addition, with more people using our full-service lanes, our team has been engaging with nearly 15% more guests at checkout compared with last year.

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

Michael: In addition, with more people using our full service lanes, our team has been engaging with nearly 15% more guests at checkout compared with last year.

Michael: In addition, with more people using our full-service lanes, our team has been engaging with nearly, 15% more guests at checkout compared with last year. And with all of these changes, we've seen a continued, substantial improvement in our, net promoter scores regarding the purchase experience, with scores related to wait times and interactions at checkout the strongest we've seen in six years.

Speaker Change: In addition, with more people using our full service lines. Our team has been engaging with nearly 15% more guests at checkout compared with last year.

Michael Fiddelke: And with all of these changes, we've seen a continued substantial improvement in our net promoter scores regarding the purchase experience, with scores related to wait times and interactions at checkout the strongest we've seen in six years.

Michael: And with all of these changes, we've seen a continued substantial improvement in our net promoter scores regarding the purchase, with scores related to wait times and interactions at checkout, the strongest we've seen in six, We're also making investments in technology to make it easier for our team members to serve our guests.

Speaker Change: And with all of these changes we have seen a continued substantial improvement in our net promoter scores regarding the purchase experience with scores related to wait times and interactions at checkout. The strongest we've seen in six years.

Michael Fiddelke: We're also making investments in technology to make it easier for our team members to serve our guests. Earlier this year, we integrated Gen AI into the handheld devices in our stores, providing our team with rapid access to best practice documentation, and the ability to quickly receive straightforward responses to common questions like how do I sign a guest up for a target circle card, and how do I restart the cash register in the event of a power outage. Since the full chain rollout of this new tool, our team members have leveraged the technology more than 50,000 times, getting answers in a highly efficient average chat time of less than one minute.

Michael Fiddelke: We're also making investments in technology to make it easier for our team members to serve our guests. Earlier this year, we integrated Gen AI into the handheld devices in our stores, providing our team with rapid access to best practice documentation and the ability to quickly receive straightforward responses to common questions like how do I sign a guest up for a Target Circle card, and how do I restart the cash register in the event of a power outage. Since the full chain rollout of this new tool, our team members have leveraged the technology more than 50,000 times, getting answers in a highly efficient average chat time of less than one minute.

Michael: We're also making investments in technology to make it easier for our team members to, serve our guests.

We're also making investments in technology to make it easier for our team members to serve our guests earlier. This year, we integrated <unk> into the handheld devices in our stores, providing our team with rapid access to best practice documentation and the ability to quickly receive straightforward responses to common questions like how do I sign a guest upfront target circle card.

Michael: Earlier this year, we integrated Gen AI into the handheld devices in our, Providing our team with rapid access to best practice documentation and the ability to quickly receive straightforward responses to common questions like, how do I sign a guest up for a target circle card? And how do I restart the cash register in the event of a power outage? Since the full chain rollout of this new tool, our team members have leveraged the technology more than 50,000 times, getting answers in a highly efficient average chat time of less than one minute.

Michael: Earlier this year, we integrated Gen AI into the handheld devices in our stores, providing, our team with rapid access to best practice documentation, and the ability to quickly receive straightforward responses to common questions like, how do I sign a guest up for a Target CircleCard?

Michael: And how do I restart the cash register in the event of a power outage?

Speaker Change: And how do I restart the cash register in the event of a power outage.

Michael Fiddelke: Since the full chain rollout of this new tool, our team members have leveraged the technology more than 50,000 times, getting answers in a highly efficient average chat time of less than one minute. We'll continue to refine this tool over time, based on feedback from our team, but many are already telling us that it's enhanced their everyday work experience, making it easier and faster for them to help our guests. In addition, leaders in our stores are telling us they expect this new tool will be particularly helpful as we bring on new permanent and seasonal team members in advance of this year's holiday season, helping them to become more productive more quickly than in the past. Of course, while well documented, efficient and repeatable processes are critical to maintaining quality and a large operation. It's just as important to help our team to stay nimble and able to react to unforeseen events.

Michael: Since the full chain rollout of this new tool, our team members have leveraged the technology, more than 50,000 times, getting answers in a highly efficient average chat time of less than one minute. We'll continue to refine this tool over time, based on feedback from our team, but many are already telling us that it's enhanced their everyday work experience, making it easier and faster for them to help our guests. In addition, leaders in our stores are telling us they expect this new tool will be particularly helpful as we bring on new permanent and seasonal team members in advance of this year's holiday season, helping them to become more productive, more quickly than in the past.

Speaker Change: The full chain rollout of this new tool our team members have leveraged the technology more than 50000 times, giving answers in a highly efficient average chat time of less than one minute.

Michael Fiddelke: We'll continue to refine this tool over time, based on feedback from our team, but many are already telling us that it's enhanced their everyday work experience, making it easier and faster for them to help our guests. In addition, leaders in our stores are telling us they expect this new tool will be particularly helpful as we bring on new permanent and seasonal team members in advance of this year's holiday season, helping them to become more productive more quickly than in the past.

Michael: We'll continue to refine this tool over time based on feedback from our team, but many are already telling us that it's enhanced their everyday working, making it easier and faster for them to help our guests. In addition, leaders in our stores are telling us they expect this new tool will be particularly helpful as we bring on new permanent and seasonal team members in advance of this year's holidays.

Speaker Change: We will continue to refine this tool over time based on feedback from our team, but many are already telling us that it has enhanced their everyday work experience, making it easier and faster for them to help our guests.

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

Michael: Helping them to become more productive, more quickly than in the past.

Michael Fiddelke: Of course, while well documented, efficient and repeatable processes are critical to maintaining quality and a large operation.

Michael: Of course, while well-documented, efficient and repeatable processes are critical to maintaining quality in a large operation, it's just as important to help our team to stay nimble and able to react to unforeseen events, and our team had to deal with several weather-related challenges in the South. As I mentioned earlier, our Denton, Texas perishable food distribution center sustained significant physical damage from a storm in late May, resulting in a prolonged site closure and significant product loss at that location.

Speaker Change: Of course, while well documented efficient and repeatable processes are critical to maintaining quality and a large operation. It's just as important to help our team to stay nimble and able to react to unforeseen events.

Michael Fiddelke: It's just as important to help our team to stay nimble and able to react to unforeseen events.

Michael Fiddelke: It's just as important to help our team to stay nimble and able to react to unforeseen events. And our team had to deal with several weather-related challenges in the second quarter. As I mentioned earlier, our Denton, Texas, Parishable Food Distribution Center sustained significant physical damage from a storm in late May, resulting in a prolonged site closure and significant product loss at that location. Following the storm, the team reacted quickly to minimize the impact, temporarily re-aligning perishable food replenishment for 220 locations with other distribution nodes, while our construction and distribution teams rushed to get the facility repaired and operational before the end of the quarter.

Michael: And, our team had to deal with several weather-related challenges in the second quarter. As I mentioned earlier, our Denton, Texas, Perishable Food Distribution Center sustained significant physical damage from a storm in late May, resulting in a prolonged site closure and significant product loss at that location. Following the storm, the team reacted quickly to minimize the impact, temporarily realigning perishable food replenishment for 220 locations with other distribution nodes, while our construction and distribution teams rushed to get the facility repaired and operational before the end of the quarter.

Michael Fiddelke: And our team had to deal with several weather-related challenges in the second quarter. As I mentioned earlier, our Denton Texas Parishable Food Distribution Center sustained significant physical damage from a storm in late May, resulting in a prolonged site closure and significant product loss at that location. Following the storm, the team reacted quickly to minimize the impact, temporarily re-aligning perishable food replenishment for 220 locations with other distribution nodes, while our construction and distribution teams rushed to get the facility repaired and operational before the end of the quarter.

Speaker Change: And our team had to deal with several weather related challenges in the second quarter.

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

Michael: Following the storm, the team reacted quickly to minimize the impact, temporarily realigning perishable food replenishment for 220 locations with other distribution nodes, while our construction and distribution teams rushed to get the facility repaired and operational before the end of the storm.

Following the storm the team reacted quickly to minimize the impact temporarily realigning perishable food replenishment for 220 locations with other distribution nodes, while our construction and distribution teams rushed to get the facility repaired and operational before the end of the quarter.

Michael: Later in the quarter, in early July, Hurricane Beryl hit landfall in southern Texas, and our team responded quickly to help their neighbors and affected communities. When power was lost in multiple locations, our team successfully kept stores open using generators, providing food, supplies, and a safe place for community members to take shelter and charge their electronic devices. Our team helped to organize and deliver donations of critical supplies to their neighbors while helping to clear debris from nearby roads and homes.

Michael Fiddelke: Later in the quarter, in early July, Hurricane Barrel hit landfall in southern Texas, and our team responded quickly to help their neighbors and affected communities. When power was lost in multiple locations, our team successfully kept stores open using generators, providing food, supplies, and a safe place for community members to take shelter and charge their electronic devices. Our team helped to organize and deliver donations of critical supplies to their neighbors while helping to clear debris from nearby roads and homes.

Michael: Later in the quarter, in early July, Hurricane Beryl hit landfall in southern Texas, and our team responded quickly to help their neighbors in affected communities. When power was lost in multiple locations, our team successfully kept stores open using generators, providing food, supplies, and a safe place for community members to take shelter and charge their electronic devices. Our team helps to organize and deliver donations of critical supplies to their neighbors while helping to clear debris from nearby roads and homes. And as always, our team members took care of each, from cooking meals for displaced colleagues to making sure everyone had access to emergency supplies.

Speaker Change: Later in the quarter and early July Hurricane barrel hit landfall in southern Texas, and our team responded quickly to help their neighbors in affected communities.

Speaker Change: When power was lost in multiple locations. Our teams successfully kept stores open using generators, providing food supplies and a safe place for community members to take shelter and charged their electronic devices.

Speaker Change: Our team helped to organize and deliver donations of critical suppliers to their neighbors, while helping to clear debris from nearby roads in homes.

Michael: And, as always, our team members took care of each other, from cooking meals for displaced colleagues to making sure everyone had access to emergency supplies and shelter. To support these heroic efforts in the field, we maintain a robust infrastructure, supported by a core team at our headquarters, that's ready to provide communications and support when disasters happen. As part of these preparations, we reserve and preposition thousands of pallets of critical supplies throughout our distribution network, which can be quickly deployed to affected areas when events occur.

Michael Fiddelke: And, as always, our team members took care of each other, from cooking meals for displaced colleagues to making sure everyone had access to emergency supplies and shelter. To support these heroic efforts in the field, we maintain a robust infrastructure, supported by a core team at our headquarters that's ready to provide communications and support when disasters happen. As part of these preparations, we reserve and preposition thousands of pallets of critical supplies throughout our distribution network, which can be quickly deployed to affected areas when events occur.

Speaker Change: And as always our team members took care of each other from cooking meals for displaced colleagues to making sure everyone had access to emergency supplies and shelter.

Michael Fiddelke: We also maintain a command center at our headquarters that's equipped to monitor weather and other conditions in the areas where we operate, helping our field teams to prepare and react quickly to minimize the impact with adverse events affect our communities, colleagues, and our business.

Michael Fiddelke: To support these heroic efforts in the field, we maintain a robust infrastructure, supported by a core team at our headquarters that's ready to provide communications and support when disasters happen. As part of these preparations, we reserve and preposition thousands of pallets of critical supplies throughout our distribution network, which can be quickly deployed to affected areas when events occur. We also maintain a command center at our headquarters that's equipped to monitor weather and other conditions in the areas where we operate, helping our field teams to prepare and react quickly to minimize the impact with adverse events affect our communities, colleagues, and our business.

Michael: To support these heroic efforts in the field, we maintain a robust. Supported by a core team at our headquarters that's ready to provide communications and support when disasters, As part of these preparations, we reserve and pre-position thousands of pallets of critical supplies throughout our distribution network, which can be quickly deployed to affected areas when events occur.

Speaker Change: To support these heroic efforts in the field, we maintain a robust infrastructure supported by our core team at our headquarters that's ready to provide communications and support when disasters happen.

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

Michael: We also maintain a command center at our headquarters that's equipped to monitor weather and other conditions in the areas where we operate, helping our field teams to prepare and react quickly to minimize the impact when adverse events affect our communities, colleagues, and our, And, of course, we're proud to continue offering financial support in affected communities, having already made proactive donations of $2.5 million so far this year in support of our domestic and global disaster, Following Hurricane Beryl, our donations helped the American Red Cross stand up more than 10 evacuation centers.

Speaker Change: We also maintain a command center at our headquarters that is equipped to monitor weather and other conditions in the areas, where we operate helping our field teams to prepare and react quickly to minimize the impact with adverse events affect our communities colleagues in our business.

Michael: And, of course, we're proud to continue offering financial support in affected communities, having already made proactive donations of $2.5 million so far this year in support of our domestic and global disaster relief partners.

Michael Fiddelke: And, of course, we're proud to continue offering financial support in affected communities, having already made proactive donations of $2.5 million so far this year in support of our domestic and global disaster relief partners. Following Hurricane barrel, our donations helped the American Red Cross stand up more than 10 evacuation centers in Houston. We also supported Team Rubicon as they worked to clear fall entries, helped homeowners navigate FEMA applications for disaster assistance, aided the footprint project in providing solar generators to power homes and medical machines, and provided food, medicine, and other critical supplies to the hardest hit neighborhoods.

Michael Fiddelke: And, of course, we're proud to continue offering financial support in affected communities, having already made proactive donations of $2.5 million so far this year in support of our domestic and global disaster relief partners. Following Hurricane Barrel, our donations helped the American Red Cross stand up more than 10 evacuation centers in Houston. We also supported Team Rubicon as they worked to clear fall entries, helped homeowners navigate FEMA applications for disaster assistance, aided the Footprint Project in providing solar generators to power homes and medical machines, and provided food, medicine, and other critical supplies to the hardest hit neighborhoods.

Speaker Change: And of course, we're proud to continue offering financial support in affected communities, having already made proactive donations of $2 $5 million. So far this year in support of our domestic and global disaster relief partners.

Michael: Following Hurricane Beryl, our donations helped the American Red Cross stand up more than 10 evacuation centers in Houston.

Michael Fiddelke: Following Hurricane barrel, our donations helped the American Red Cross stand up more than 10 evacuation centers in Houston.

Speaker Change: Following hurricane barrel, our donations helped the American Red Cross stand up more than 10 evacuation centers in Houston.

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

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

Michael: We also supported Team Rubicon, as they worked to clear fallen trees, helped homeowners navigate FEMA applications for disastrous, aided the Footprint Project in providing solar generators to power homes and medical machines, and provided food, medicine and other critical supplies to the hardest So much of our target forward sustainability strategy is dedicated to working across the business to address community needs and drive meaningful and positive, Through Target's philanthropy and volunteerism, and by integrating business assets to meet the needs of our community.

Speaker Change: We also supported team Rubicon as they worked to clear fallen trees helped homeowners navigate FEMA applications for disastrous systems aided the footprint project and providing solar generators to power homes and medical machines and provided food medicine and other critical supplies to the hardest hit neighborhoods.

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

Michael Fiddelke: So much of our target forward sustainability strategy is dedicated to working across the business to address community needs and drive meaningful and positive impact. Through targets for philanthropy and volunteerism, and by integrating business assets to meet the needs of our communities, we aim to be present in ways that help all families.

Speaker Change: So much of our target forward sustainability strategy is dedicated to working across the business to address community needs and drive meaningful and positive impact.

Speaker Change: Through targets from Anthropy, and volunteerism and by integrating business assets to meet the needs of our communities. We aimed to be present in ways that help all families thrive knowing the guests and communities. We serve are critical to the success of our business.

Michael: We aim to be present in ways that help all families.

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

Michael Fiddelke: Drive, Knowing the guests and communities we serve are critical to the success of our business.

Michael: Knowing the guests and communities we serve are critical to the success of our, So I want to pause and thank our entire team for their tireless both every day and especially during times of, You serve as the face of the company in all of the communities where we live and work.

Michael: You serve as the face of the company and all of the communities where we live and work, and you're the biggest reason consumers love our brand.

Michael: I'm proud to work with you and grateful for everything you do to support our business, our communities, and your fellow team members.

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

Michael Fiddelke: So I want to pause and thank our entire team for their tireless efforts, both every day and especially during times of need. You serve as the face of the company and all of the communities where we live and work, and you're the biggest reason consumers love our brand. I'm proud to work with you and grateful for everything you do to support our business, our communities, and your fellow team members.

Speaker Change: I want to pause and thank our entire team for their tireless efforts, both every day and especially during times of need you serve as the face of the company and all of the communities, where we live and work and you are the biggest reason consumers love our brand I am proud to work with you and grateful for everything you do to support our business our communities.

Michael Fiddelke: You serve as the face of the company and all of the communities where we live and work, and you're the biggest reason consumers love our brand.

Michael: And you're the biggest reason consumers love our.

Michael Fiddelke: I'm proud to work with you and grateful for everything you do to support our business, our communities, and your fellow team members.

Michael: I'm proud to work with you and grateful for everything you do to support our business, our communities, and your fellow, So now I want to pivot and provide a quick update on our sortation center, which continues to benefit our business in multiple, A critical aspect of this strategy is faster delivery, as local orders processed through a sortation, arrived more than a day faster than our network.

Speaker Change: And your fellow team members.

Michael: So now I want to pivot and provide a quick update on our sortation center strategy, which continues to benefit our business in multiple ways. A critical aspect of the strategy is faster delivery speeds, as local orders processed through a sortation center arrive more than a day faster than our network average. But notably, that increase in speed doesn't require more dollars, as our unit delivery costs from a sort center are about 20% lower than our network average.

Michael Fiddelke: So now, I want to pivot and provide a quick update on our Sortation Center strategy, which continues to benefit our business in multiple ways. A critical aspect of the strategy is faster delivery speeds, as local orders process through a Sortation Center arrive more than a day faster than our network average. But notably, that increase in speed doesn't require more dollars, as our unit delivery costs from a Sort Center are about 20% lower than our network average.

Michael: But notably, that increase in speed doesn't require more dollars, as our unit delivery costs from a sort center are about 20% lower than our network costs. On top of that direct benefit, opening a sortation center in a market frees up processing space in the stores it serves, while delivering labor savings in those locations.

Speaker Change: So now I want to pivot and provide a quick update on our Sortation Center strategy, which continues to benefit our business in multiple ways.

Speaker Change: A critical aspect of the strategy is faster delivery speeds as local orders process through a sortation center arrive more than a day faster than our network average.

Michael: On top of that direct benefit, opening a sortation center in a market frees up processing space in the stores it serves, while delivering labor savings in those locations as well.

Speaker Change: But notably that increase in speed doesn't require more dollars as our unit delivery costs from our sort center are about 20% lower than our network average.

Michael Fiddelke: On top of that direct benefit, opening a Sortation Center in a market frees up processing space and the stores it serves while delivering labor savings in those locations as well. With all of these benefits, you can see why we're excited to continue expanding the reach of this capability.

Speaker Change: On top of that direct benefit opening of Sortation center in a market freeze up processing space in the stores. It serves while delivering labor savings in those locations as well.

Michael: With all of these benefits, you can see why we're excited to continue expanding the reach of this capability.

Michael Fiddelke: With all of these benefits, you can see why we're excited to continue expanding the reach of this capability. And just this month, we're opening our 11th Sort Center in the Detroit market, where it's expected to serve more than 3 million consumers. By 2028, this facility is expected to process up to 60,000 packages daily while operating in a smaller-than-average footprint. And, beyond growth in the number of these facilities, our existing Sort Centers continue to ramp up their capacity and refine new ways to integrate them into our broader network. For example, our recently open flow center in Chicago will be feeding the Detroit Sortation Center, increasing the number of packages eligible for next state delivery in that market.

Michael: With all of these benefits, you can see why we're excited to continue expanding the reach of this capability.

Speaker Change: With all of these benefits you can see why we're excited to continue expanding the reach of this capability and just this month, we're opening our 11th sort center in the Detroit market, where it is expected to serve more than 3 million consumers.

Michael: And just this month, we're opening our 11th SORT Center in the Detroit market, where it's expected to serve more than 3 million consumers.

Michael Fiddelke: And just this month, we're opening our 11th Sort Center in the Detroit market where it's expected to serve more than 3 million consumers. By 2028, this facility is expected to process up to 60,000 packages daily while operating in a smaller than average footprint. And, beyond growth in the number of these facilities, our existing Sort Centers continue to ramp up their capacity and refining new ways to integrate them into our broader network.

Michael: By 2028, this facility is expected to process up to 60,000 packages daily while operating in a smaller than average, And beyond growth in the number of these facilities, our existing source centers continue to ramp up their capacity, and we're finding new ways to integrate them into our broader network.

Speaker Change: By 2028. This facility is expected to process up to 60000 packages daily while operating in a smaller than average footprint.

Michael: And just this month, we're opening our 11th sort center in the Detroit market, where it's expected to serve more than 3 million consumers. By 2028, this facility is expected to process up to 60,000 packages daily, while operating in a smaller than average footprint.

Michael: And beyond growth in the number of these facilities, our existing sort centers continue to ramp up their capacity, and we're finding new ways to integrate them into our broader network. For example, our recently opened flow center in Chicago will be feeding the Detroit sortation center, increasing the number of packages eligible for next day delivery in that market. Altogether this year, our sortation centers have processed 19% more packages than a year ago.

Michael Fiddelke: And, beyond growth in the number of these facilities, our existing Sort Centers continue to ramp up their capacity and refining new ways to integrate them into our broader network. For example, our recently open flow center in Chicago will be feeding the Detroit Sortation Center, increasing the number of packages eligible for next state delivery in that market. Altogether this year, our Sortation Centers have processed 19% more packages than a year ago.

Speaker Change: And beyond growth in the number of these facilities are existing sort centers continue to ramp up their capacity and we're finding new ways to integrate them into our broader network for.

Michael Fiddelke: For example, our recently open flow center in Chicago will be feeding the Detroit Sortation Center, increasing the number of packages eligible for next state delivery in that market. Altogether this year, our Sortation Centers have processed 19% more packages than a year ago.

Michael: For example, our recently opened flow center in Chicago will be feeding the Detroit sortation.

For example, our recently opened flow center in Chicago will be feeding that Detroit Sortation center, increasing the number of packages eligible for next day delivery in that market.

Michael: Increasing the number of packages eligible for next day delivery in that, Altogether this year, our sortation centers have processed 19% more packages than a year ago.

Michael Fiddelke: Altogether, this year, our Sortation Centers have processed 19% more packages than a year ago.

Speaker Change: Altogether this year, our sortation centers are processed 19% more packages than a year ago.

Michael: So now, I want to turn to our second quarter financial results. As Brian highlighted earlier, the 2% increase in our Q2 comp sales was driven entirely by traffic. This traffic increase was partially offset by a decline in average ticket, which included a decrease in our average selling price when compared with a year ago.

Michael Fiddelke: So now, I want to turn to our second quarter financial results. As Brian highlighted earlier, the 2% increase in our Q2 comp sales was driven entirely by traffic. This traffic increase was partially offset by a decline in average ticket, which included a decrease in our average selling price when compared with a year ago. As Brian mentioned, our guests continue to shop around seasonal moments, leading to strength around the Memorial Day holiday, as well as the 4th of July, and our most recent target circle week later in the quarter.

Michael: So now, I want to turn to our second quarter financial report. As Brian highlighted earlier, the 2% increase in our Q2 comp sales was driven entirely by, This traffic increase was partially offset by a decline in average which included a decrease in our average selling price when compared with a year ago.

Speaker Change: So now I want to turn to our second quarter financial results as Brian highlighted earlier, the 2% increase in our Q2 comp sales was driven entirely by traffic. This.

Speaker Change: This traffic increase was partially offset by a decline in average ticket, which included a decrease in our average selling price when compared with a year ago.

Michael: As Brian mentioned, our guests continue to shop around seasonal moments, leading to strength around the Memorial Day holiday, as well as the 4th of July, and our most recent target circle week later in the quarter. Within the quarter, comp sales were strongest in June and July, and trends were very similar between those two months on a reported basis.

Michael Fiddelke: As Brian mentioned, our guests continue to shop around seasonal moments, leading to strength around the Memorial Day holiday, as well as the 4th of July, and our most recent target circle week later in the quarter. Within the quarter, comp sales were strongest in June and July. And trends were very similar between those two months on a reported basis.

Michael: As Brian mentioned, our guests continue to shop around seasonal moments, leading to strength around the Memorial Day holiday, as well as the 4th of July, and our most recent Target Circle week later in the, Within the quarter, comp sales were strongest in June and July, and trends were very similar between those two months on a reported basis.

Speaker Change: As Brian mentioned, our guests continue to shop around seasonal moments, leading to strength around the memorial day holiday as well as the fourth of July and our most recent target circle week later in the quarter.

Michael Fiddelke: Most importantly, traffic grew in all three months of the quarter.

Michael Fiddelke: Within the quarter, comp sales were strongest in June and July. And trends were very similar between those two months on a reported basis. Most importantly, traffic grew in all three months of the quarter. Beyond our comp sales, second quarter total revenue growth of 2.7%, reflected the benefit from sales and momature stores, and double digit growth in other revenue driven primarily by strong growth in our Roundell ad business. Our second quarter gross margin rate of 28.9% was about 190 basis points higher than a year ago.

Brian: Within the quarter comp sales were strongest in June and July and trends were very similar between those two months on a reported basis most.

Michael Fiddelke: And trends were very similar between those two months on a reported basis. Most importantly, traffic grew in all three months of the quarter. Beyond our comp sales, second quarter total revenue growth of 2.7% reflected the benefit from sales and momature stores, and double digit growth in other revenue driven primarily by strong growth in our Roundell ad business. Our second quarter gross margin rate of 28.9% was about 190 basis points higher than a year ago. About 90 basis points of this improvement was driven by our merchandising strategies, which included the ongoing benefit of our efficiency work.

Michael: Most importantly, traffic grew in all three months of the quarter.

Michael: Most importantly, traffic grew in all three months of, Beyond our comp sales, second quarter total revenue growth of 2.7% reflected the benefit from sales in non-mature and Double-Digit Growth and Other Revenue, driven primarily by strong growth in our Roundel Admin.

Brian: Most importantly traffic grew in all three months of the quarter.

Michael: Beyond our comp sales, second quarter total revenue growth of 2.7% reflected the benefit from sales in non-mature stores, and double-digit growth in other revenue driven primarily by strong growth in our Roundel ad business.

Michael Fiddelke: Beyond our comp sales, second quarter total revenue growth of 2.7%, reflected the benefit from sales and momature stores, and double digit growth in other revenue driven primarily by strong growth in our Roundell ad business. Our second quarter gross margin rate of 28.9% was about 190 basis points higher than a year ago. About 90 basis points of this improvement was driven by our merchandising strategies, which included the ongoing benefit of our efficiency work.

Speaker Change: Beyond our comp sales second quarter total revenue growth of two 7% reflected the benefit from sales of non mature stores and double digit growth in other revenue driven primarily by strong growth in our round del Ad business.

Michael: Our second quarter gross margin rate of 28.9% was about 190 basis points higher than a year ago. About 90 basis points of this improvement was driven by our merchandising strategies, which included the ongoing benefit of our efficiency work. We also saw about 40 basis points of benefit from category sales mix, which was largely offset by cost pressures from digital fulfillment and supply chain. Finally, our gross margin rate reflected about 90 basis points of benefit from lower inventory shrink, compared with a 20 basis point benefit in the first quarter. While our guidance assumed that the year-over-year benefit from shrink would increase this quarter, we've seen better-than-expected results in our most recent store inventory counts, resulting in a bigger-than-expected financial benefit in Q2.

Michael Fiddelke: We also saw about 40 basis points of benefit from category sales mix, which was largely offset by cost pressures from digital fulfillment and supply chain. Finally, our gross margin rate reflected about 90 basis points of benefit from lower inventory shrink, compared with the 20 basis point benefit in the first quarter. While our guidance assumes that the year-over-year benefit from shrink would increase this quarter, we've seen better than expected results in our most recent store inventory counts, resulting in a bigger than expected financial benefit in Q2.

Speaker Change: Our second quarter gross margin rate of 28, 9% was about 190 basis points higher than a year ago.

Michael Fiddelke: About 90 basis points of this improvement was driven by our merchandising strategies, which included the ongoing benefit of our efficiency work. We also saw about 40 basis points of benefit from category sales mix, which was largely offset by cost pressures from digital fulfillment and supply chain. Finally, our gross margin rate reflected about 90 basis points of benefit from lower inventory shrink, compared with the 20 basis point benefit in the first quarter.

Speaker Change: 90 basis points of this improvement was driven by our merchandising strategies, which included the ongoing benefit of our efficiency work.

Michael Fiddelke: We also saw about 40 basis points of benefit from category sales mix, which was largely offset by cost pressures from digital fulfillment and supply chain. Finally, our gross margin rate reflected about 90 basis points of benefit from lower inventory shrink, compared with the 20 basis point benefit in the first quarter. While our guidance assumes that the year-over-year benefit from shrink would increase this quarter, we've seen better-than-expected results in our most recent store inventory counts, resulting in a bigger-than-expected financial benefit in Q2. Based on these updated counts, we're now expecting our Q3 gross margin rate will also benefit from lower shrink costs, but expect the magnitude of that benefit will be less than half of what we just experienced in the second quarter.

Speaker Change: We also saw about 40 basis points of benefit from category sales mix, which was largely offset by cost pressures from digital fulfillment and supply chain.

Speaker Change: Finally, our gross margin rate reflected about 90 basis points of benefit from lower inventory shrink compared with a 20 basis point benefit in the first quarter.

Michael Fiddelke: While our guidance assumes that the year-over-year benefit from shrink would increase this quarter, we've seen better than expected results in our most recent store inventory counts, resulting in a bigger than expected financial benefit in Q2. Based on these updated counts, we're now expecting our Q3 gross margin rate will also benefit from lower shrink costs, but expect the magnitude of that benefit will be less than half of what we just experienced in the second quarter.

Michael: While our guidance assumes that the year-over-year benefit from SHRNC would increase, We've seen better than expected results in our most recent store inventory. Resulting in a bigger than expected financial benefit in Q2.

Speaker Change: While our guidance assumes that the year over year benefit from shrink would increase this quarter, we've seen better than expected results in our most recent store inventory counts, resulting in a bigger than expected financial benefit in Q2.

Michael: Based on these updated counts, we're now expecting our Q3 gross margin rate will also benefit from lower shrink costs, but expect the magnitude of that benefit will be less than half of what we just experienced in the second quarter.

Michael Fiddelke: Based on these updated counts, we're now expecting our Q3 gross margin rate will also benefit from lower shrink costs, but expect the magnitude of that benefit will be less than half of what we just experienced in the second quarter.

Speaker Change: Based on these updated counts, we're now expecting our Q3 gross margin rate will also benefit from lower shrink costs, but expect the magnitude of that benefit will be less than half of what we just experienced in the second quarter.

Michael: And for Q4, given the financial benefit we were already seeing a year ago, we're expecting shrink costs will be approximately flat to last year. While it's encouraging to see this progress, we'll continue our work to move shrink rates down to more sustainable levels in the years ahead, given the steep increase in shrink that our business has absorbed over the last five years.

Michael Fiddelke: And for Q4, given the financial benefit, we were already seeing a year ago, we're expecting shrink costs will be approximately flat to last year.

Michael Fiddelke: And for Q4, given the financial benefit, we were already seeing a year ago, we're expecting shrink costs will be approximately flat to last year. While it's encouraging to see this progress, we'll continue our work to move shrink rates down to more sustainable levels in the years ahead, given the steep increase in shrink that our business has absorbed over the last five years. Our second quarter SGA expense rate of 21.2% was about 30 basis points higher than a year ago.

Michael: And for Q4, given the financial benefit we were already seeing a year ago, we're expecting shrink costs will be approximately flat to last year.

Speaker Change: And for Q4, given the financial benefit we were already seeing a year ago, we're expecting shrink costs will be approximately flat to last year.

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

Michael: While it's encouraging to see this progress, we'll continue our work to move shrink rates down to more sustainable levels in the years, given the steep increase in shrink that our business has absorbed over the last, Our second quarter SG&A expense rate of 21.2% was about 30 basis points higher than a year ago.

Speaker Change: While it is encouraging to see this progress will continue our work to move shrink rates down to more sustainable levels in the years ahead, given the steep increase in shrink that our business is absorbed over the last five years.

Michael: Our second-quarter SG&A expense rate of 21.2% was about 30 basis points higher than a year ago. This increase reflected cost increases in multiple parts of our business, along with continued investments in our team, which were partially offset by lower remodel expenses, savings from our efficiency work, and continued disciplined cost management throughout the enterprise.

Michael Fiddelke: Our second quarter SGA expense rate of 21.2% was about 30 basis points higher than a year ago. This increase reflected cost increases in multiple parts of our business, along with continued investments in our team, which were partially offset by lower remodel expenses, savings from our efficiency work, and continued discipline in cost management throughout the enterprise. Overall, our Q2 operating margin rate of 6.4% was about 160 basis points higher than last year, as we continue to build back our profitability from the significant headwinds we've encountered over the last couple of years. Regarding our inventory, we continue to feel good about our position.

Speaker Change: Our second quarter SG&A expense rate of 21, 2% was about 30 basis points higher than a year ago.

Michael Fiddelke: This increase reflected cost increases in multiple parts of our business, along with continued investments in our team, which were partially offset by lower remodel expenses, savings from our efficiency work, and continued discipline cost management throughout the enterprise. Overall, our Q2 operating margin rate of 6.4% was about 160 basis points higher than last year, as we continue to build back our profitability from the significant headwinds we've encountered over the last couple of years.

Michael: This increase reflected cost increases in multiple parts of our, along with continued investments in our team, which were partially offset by lower remodel expenses, savings from our efficiency work, and continued disciplined cost management throughout the, Overall, our Q2 operating margin rate of 6.4% was about 160 basis points higher than last year, as we continue to build back our profitability from the significant headwinds we've encountered over the last.

Speaker Change: This increase reflected cost increases in multiple parts of our business along with continued investments in our team, which were partially offset by lower remodel expenses savings from our efficiency work and continued disciplined cost management throughout the enterprise.

Michael: Overall, our Q2 operating margin rate of 6.4% was about 160 basis points higher than last year, as we continue to build back our profitability from the significant headwinds we've encountered over the last couple of years.

Michael Fiddelke: Overall, our Q2 operating margin rate of 6.4% was about 160 basis points higher than last year, as we continue to build back our profitability from the significant headwinds we've encountered over the last couple of years.

Speaker Change: Overall, our Q2 operating margin rate of six 4% was about 160 basis points higher than last year as we continue to build back our profitability from the significant headwinds we have encountered over the last couple of years.

Michael: Regarding our inventory, we continue to feel good about our position. As I mentioned earlier, Q2 ending inventory on the balance sheet was slightly lower than a year ago.

Michael Fiddelke: Regarding our inventory, we continue to feel good about our position. As I mentioned earlier, Q2 ending inventory on the balance sheet was slightly lower than a year ago.

Michael Fiddelke: Regarding our inventory, we continue to feel good about our position. As I mentioned earlier, Q2 ending inventory on the balance sheet was slightly lower than a year ago. However, given all of the volatility we've experienced since the pandemic began, one year comparisons can be hard to interpret. As such, we still find it useful to compare relative growth rates back to 2019. And, if you perform that comparison for the second quarter, you'll see that both our sales and ending inventory have grown about 38% over those five years, reinforcing our view that were positioned appropriately as we enter the back half of the year.

Michael: Regarding our inventory, we continue to feel good about our, As I mentioned earlier, Q2 ending inventory on the balance sheet was slightly lower than a year ago. However, given all of the volatility we've experienced since the pandemic began, one-year comparisons can be hard to interpret.

Speaker Change: Regarding our inventory we continue to feel good about our position as I mentioned earlier Q2, ending inventory on the balance sheet was slightly lower than a year ago How's.

Michael Fiddelke: As I mentioned earlier, Q2 ending inventory on the balance sheet was slightly lower than a year ago. However, given all of the volatility we've experienced since the pandemic began, one-year comparisons can be hard to interpret. As such, we still find it useful to compare relative growth rates back to 2019. And, if you perform that comparison for the second quarter, you'll see that both our sales and ending inventory have grown about 38% over those five years, reinforcing our view that we're positioned appropriately as we enter the back half of the year.

Michael: However, given all of the volatility we've experienced since the pandemic began, one-year comparisons can be hard to interpret. As such, we still find it useful to compare relative growth rates back to 2019. And if you perform that comparison for the second quarter, you'll see that both our sales and ending inventory have grown about 38% over those five years, reinforcing our view that we're positioned appropriately as we enter the back half of the year.

Michael Fiddelke: However, given all of the volatility we've experienced since the pandemic began, one year comparisons can be hard to interpret. As such, we still find it useful to compare relative growth rates back to 2019.

Speaker Change: However, given all of the volatility we've experienced since the pandemic began one year comparisons can be hard to interpret as.

Michael Fiddelke: And, if you perform that comparison for the second quarter, you'll see that both our sales and ending inventory have grown about 38% over those five years, reinforcing our view that were positioned appropriately as we enter the back half of the year.

Michael: As such, we still find it useful to compare relative growth rates back to 2019. And if you perform that comparison for the second quarter, you'll see that both our sales and ending inventory have grown about 38% over those five years, reinforcing our view that we're positioned appropriately as we enter the back.

Speaker Change: As such we still find it useful to compare relative growth rates back to 2019.

Speaker Change: And if you perform that comparison for the second quarter Youll see that both our sales and ending inventory have grown about 38% over those five years reinforcing our view that we're positioned appropriately as we enter the back half of the year.

Michael Fiddelke: Now I'd like to turn to capital deployment and briefly reiterate our longstanding priorities. First, we look to fully invest in our business and projects that meet our strategic and financial criteria. Next, we look to support the dividend and build on our more than 50 year record of increasing the annual dividend. And finally, we look to return any excess cash that's available after these first two uses by engaging in sharey purchases over time within the limits of our middle-A credit ratings.

Michael Fiddelke: Now I'd like to turn to capital deployment and briefly reiterate our longstanding priorities. First, we look to fully invest in our business and projects that meet our strategic and financial criteria. Next, we look to support the dividend and build on our more than 50-year record of increasing the annual dividend. And finally, we look to return any excess cash that's available after these first two uses by engaging in share purchases over time within the limits of our middle-A credit ratings. Regarding the first priority, we've allocated $1.3 billion to capital expenditures through the first half of the year and continue to expect full-year capex in the $3.4 billion range.

Michael: Now I'd like to turn to capital deployment and briefly reiterate our longstanding priorities. First, we look to fully invest in our business and projects that meet our strategic and financial criteria. Next, we look to support the dividend and build on our more than 50-year record of increasing the annual dividend.

Michael: Now I'd like to turn to capital deployment and briefly reiterate our longstanding priority. First, we look to fully invest in our business and projects that meet our strategic and financial criteria.

Speaker Change: Now I'd like to turn to capital deployment and briefly reiterate our longstanding priorities.

Michael: And finally, we look to return any excess cash that's available after these first two uses by engaging in share repurchases over time, within the limits of our middle-A credit ratings.

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

Michael Fiddelke: Next, we look to support the dividend and build on our more than 50 year record of increasing the annual dividend.

Michael: Next, we look to support the dividend and build on our more than 50 year record of increasing the annual, And finally, we look to return any excess cash that's available after these first two uses by engaging in share repurchases over time within the limits of our Middle A credit.

Speaker Change: Next we look to support the dividend and build on our more than 50 year record of increasing the annual dividend.

Michael Fiddelke: And finally, we look to return any excess cash that's available after these first two uses by engaging in sharey purchases over time within the limits of our middle-A credit ratings.

Speaker Change: And finally, we look to return any excess cash that's available. After these first two uses by engaging in share repurchases over time within the limits of our middle a credit ratings.

Michael: Regarding the first priority, we've allocated $1.3 billion to capital expenditures through the first half of the year and continue to expect full-year CapEx in the $3 to $4 billion range.

Michael Fiddelke: Regarding the first priority, we've allocated $1.3 billion to capital expenditures through the first half of the year and continue to expect full-year capex in the $3.4 billion range. Regarding the second priority, we returned $509 million to shareholders in the form of dividends in Q2, representing growth of about $10 million over last year. And finally, we returned to sharey purchases in the second quarter, allocating $155 million to retire 1.1 million shares of our stock.

Michael: Regarding the first priority, we've allocated $1.3 billion to capital expenditures through the first half of the year and continue to expect full year CapEx in the $3 to $4 billion, Regarding the second priority, we returned $509 million to shareholders in the form of dividends in Q2, representing growth of about $10 million over last year. And finally, we return to share repurchases in the, allocating $155 million to retire 1.1 million shares. Given the work of our team to strengthen our balance sheet over the last 18 months, and the simultaneous improvements we've seen in our profitability and cash flow, we were happy to get back to repurchasing.

Speaker Change: Regarding the first priority, we've allocated $1 $3 billion to capital expenditures through the first half of the year and continue to expect full year capex in the $3 billion to $4 billion range.

Michael: Regarding the second priority, we returned $509 million to shareholders in the form of dividends in Q2, representing growth of about $10 million over last year. And finally, we returned to share repurchases in the second quarter, allocating $155 million to retire 1.1 million shares of our stock. Given the work of our team to strengthen our balance sheet over the last 18 months and the simultaneous improvements we've seen in our profitability and cash flow, we were happy to get back to repurchases this quarter.

Michael Fiddelke: Regarding the second priority, we returned $509 million to shareholders in the form of dividends in Q2, representing growth of about $10 million over last year. And finally, we returned to share buybacks in the second quarter, allocating $155 million to retire 1.1 million shares of our stock. Given the work of our team to strengthen our balance sheet over the last 18 months and the simultaneous improvements we've seen in our profitability and cash flow, we were happy to get back to repurchases this quarter. We expect to have continued repurchase capacity in the back half of 2024 and in the years ahead.

Speaker Change: Guarding our second priority, we returned $509 million to shareholders in the form of dividends in Q2, representing growth of about $10 million over last year.

Speaker Change: And finally, we returned to share repurchases in the second quarter allocating $155 million to retire $1 1 million shares of our stock.

Michael Fiddelke: Given the work of our team to strengthen our balance sheet over the last 18 months and the simultaneous improvements we've seen in our profitability and cash flow, we were happy to get back to repurchases this quarter.

Speaker Change: Given the work of our team to strengthen our balance sheet over the last 18 months and the simultaneous improvements we've seen in our profitability and cash flow, we were happy to get back to repurchases. This quarter. We expect to have continued repurchase capacity in the back half of 2024 and in the years ahead.

Michael: We expect to have continued repurchase capacity in the back half of 2024 and in the years ahead.

Michael Fiddelke: We expect to have continued repurchase capacity in the back half of 2024 and in the years ahead.

Michael: We expect to have continued repurchase capacity in the back half of 2024 and in the years, So now, I want to end my commentary on the quarter by covering our after-tax return on investment, which is an important measure of the quality of both our financial results and our capital investment. Through the 12 months ending in the second quarter, our after-tax ROIC of 16.6% was nearly 3 percentage points higher than a year ago.

Michael: So now, I want to end my commentary on the quarter by covering our after-tax return on invested capital, which is an important measure of the quality of both our financial results and our capital investments. Through the 12 months ending in the second quarter, our after-tax ROIC of 16.6% was nearly 3 percentage points higher than a year ago.

Michael Fiddelke: So now, I want to end my commentary on the quarter by covering our aftertax return on invested capital, which is an important measure of the quality of both our financial results and our capitalists. Investments. Through the 12 months ending in the second quarter, our aftertax ROIC of 16.6% was nearly 3 percentage points higher than a year ago.

Michael Fiddelke: So now, I want to end my commentary on the quarter by covering our after-tax return on invested capital, which is an important measure of the quality of both our financial results and our capitalists. Investments. Through the 12 months ending in the second quarter, our aftertax ROIC of 16.6% was nearly 3 percentage points higher than a year ago. While this is already a very strong aftertax return, our long term financial plans and vision continued growth of this metric into the high teams over time.

Speaker Change: So now I want to end my commentary on the quarter by covering our after tax return on invested capital, which is an important measure of the quality of both our financial results and our capital investments.

Michael: While this is already a very strong after-tax return, our long-term financial plans envision continued growth of this metric into the high teens over time.

Michael Fiddelke: While this is already a very strong aftertax return, our long term financial plans and vision continued growth of this metric into the high teams over time.

Speaker Change: Through the 12 months ending in the second quarter. Our after tax ROIC of 16, 6% was nearly three percentage points higher than a year ago. While this is already a very strong after tax return our long term financial plans envision continued growth of this metric into the high teens over time.

Michael: Well, this is already a very strong aftertax.

Michael: Our long-term financial plans envision continued growth.

Michael: Into the High Teens.

Michael: Now I'd like to turn to our expectations for the third quarter and the full year. And while our performance has exceeded our expectations so far this year, and our view of the consumer remains largely the same, the range of possibilities and the macroeconomic backdrop in consumer data and in our business remains unusually high.

Michael Fiddelke: Now I'd like to turn to our expectations for the third quarter in the full year. And while our performance has exceeded our expectations so far this year, and our view of the consumer remains largely the same, the range of possibilities and the macroeconomic backdrop and consumer data and in our business remains unusually high. Against that backdrop, our experience over the last several years has shown us that a prudent outlook while maintaining the team's agility is the best way to position our business.

Michael Fiddelke: Now I'd like to turn to our expectations for the third quarter in the full year. And while our performance has exceeded our expectations so far this year, and our view of the consumer remains largely the same, the range of possibilities and the macroeconomic backdrop and consumer data and in our business remains unusually high. Against that backdrop, our experience over the last several years has shown us that a prudent outlook, while maintaining the team's agility, is the best way to position our business. As such, we've taken a measured approach to our forward-looking guidance, and our team remains ready to respond if the pace of our business turns out to be stronger.

Michael: Now I'd like to turn to our expectations for the third quarter in the full year. And while our performance has exceeded our expectations so far, and our view of the consumer remains largely the same, the range of possibilities and the macroeconomic backdrop in consumer data and in our business remains unusually high.

Speaker Change: Now I'd like to turn to our expectations for the third quarter and the full year.

Speaker Change: And while our performance has exceeded our expectations. So far this year and our view of the consumer remains largely the same the range of possibilities and the macroeconomic backdrop and consumer data and in our business remains unusually high.

Michael: Against that backdrop, our experience over the last several years has shown us that a prudent outlook while maintaining the team's agility is the best way to position our business. As such, we've taken a measured approach to our forward-looking guidance, and our team remains ready to respond if the pace of our business turns out to be stronger. With these considerations as context, we're planning for third-quarter comparable sales growth in the 0 to 2% range, and gap in adjusted EPS of $2.10 to $2.40.

Michael Fiddelke: Against that backdrop, our experience over the last several years has shown us that a prudent outlook while maintaining the team's agility is the best way to position our business. As such, we've taken a measured approach to our forward looking guidance and our team remains ready to respond if the pace of our business turns out to be stronger. With these considerations of context, we're planning for third quarter comparable sales growth in the 0 to 2% range, and gap and adjusted EPS of $2.10 to $2.40.

Michael: Against that backdrop, our experience over the last several years has shown us that a prudent outlook while maintaining the team's agility is the best way to position our, As such, we've taken a measured approach to our forward-looking guidance, and our team remains ready to respond if the pace of our business turns out to be strong. With these considerations of context, we're planning for third quarter comparable sales growth in the 0 to 2% range, and Gap in Adjusted EPS of $2.10 to $2.40.

Speaker Change: Against that backdrop, our experience over the last several years has shown us that our prudent outlook, while maintaining the team's agility is the best way to position our business.

Michael Fiddelke: As such, we've taken a measured approach to our forward looking guidance and our team remains ready to respond if the pace of our business turns out to be stronger. With these considerations of context, we're planning for third quarter comparable sales growth in the 0 to 2% range, and gap and adjusted EPS of $2.10 to $2.40. And while our full year comp guidance range remains the same at 0 to 2% growth, and the breadth of possibilities remains quite wide.

Speaker Change: As such we have taken a measured approach to our forward looking guidance and our team remains ready to respond if the pace of our business turns out to be stronger.

Michael Fiddelke: With these considerations of context, we're planning for third quarter comparable sales growth in the 0 to 2% range, and gap and adjusted EPS of $2.10 to $2.40. And while our full year comp guidance range remains the same at 0 to 2% growth, the breadth of possibilities remains quite wide. Our baseline plan for the fall season would put us in the lower half of that range for the full year. However, in light of the strong financial performance, our business has already delivered in the first half of the year, we've raised our full year gap and adjusted EPS range to $9.00 to $9.70 compared with our prior range of $8.60 to $9.60.

With these considerations as context, we're planning for third quarter comparable sales growth in the zero to 2% range and GAAP and adjusted EPS of $2 10 to $2 40.

Michael Fiddelke: And while our full year comp guidance range remains the same at 0 to 2% growth, and the breadth of possibilities remains quite wide. Our baseline plan for the fall season would put us in the lower half of that range for the full year. However, in light of the strong financial performance, our business has already delivered in the first half of the year, we've raised our full year gap and adjusted EPS range to $9.00 to $9.70 compared with our prior range of $8.60 to $9.60.

Michael: And, while our full year comp guidance range remains the same at 0-2% growth, and the breadth of possibilities remains quite wide, our baseline plan for the fall season would put us in the lower half of that range. However, in light of the strong financial performance our business has already delivered in the first half of the year, we've raised our full year gap and adjusted EPS range to $9.00 to $9.00 and, compared with our prior range of $8.60 to $9.00.

Speaker Change: And while our full year comp guidance range remains the same at zero to 2% growth and the breadth of possibilities remains quite wide our baseline plan for the fall season would put us in the lower half of that range for the full year.

Michael Fiddelke: Our baseline plan for the fall season would put us in the lower half of that range for the full year. However, in light of the strong financial performance, our business has already delivered in the first half of the year, we've raised our full year gap and adjusted EPS range to $9.00 to $9.70 compared with our prior range of $8.60 to $9.60.

Michael: And while our full-year comp guidance range remains the same at 0 to 2% growth, and the breadth of possibilities remains quite wide, our baseline plan for the fall season would put us in the lower half of that range for the full year. However, in light of the strong financial performance our business has already delivered in the first half of the year, we've raised our full-year gap in adjusted EPS range to $9 to $9.70, compared with our prior range of $8.60 to $9.60.

Speaker Change: However in light of the strong financial performance our business has already delivered in the first half of the year, we've raised our full year GAAP and adjusted EPS range to $9 to $9 70.

Speaker Change: Compared with our prior range of $8 60 to $9 60.

Michael: At our financial community meeting earlier this year, we provided insight into our financial aspirations over the next 10 years. At their core, those aspirations are based on two basic assumptions, healthy growth on the top line and reaching the appropriate level of profitability on the bottom line.

Brian Cornell: At our financial community meeting earlier this year, we provided insight into our financial aspirations over the next 10 years. At their core, those aspirations are based on two basic assumptions, healthy growth on the top line and reaching the appropriate level of profitability on the bottom line. In the second quarter, in an environment where consumers are focused on value and making tough trade-offs in their spending decisions, our team delivered newness, value and reliability to our guests, resulting in top line growth beyond our baseline expectations, and even faster growth in guest traffic.

Michael Fiddelke: At our financial community meeting earlier this year, we provided insight into our financial aspirations over the next 10 years. At their core, those aspirations are based on two basic assumptions: healthy growth on the top line and reaching the appropriate level of profitability on the bottom line. In the second quarter, in an environment where consumers are focused on value and making tough trade-offs in their spending decisions, our team delivered newness, value, and reliability to our guests, resulting in top line growth beyond our baseline expectations, and even faster growth in guest traffic. And importantly, even in a challenging environment, we also expanded our Q2 operating margin rate.

Michael: At our financial community meeting earlier this year, we provided insight into our financial aspirations over the next, At their core, those aspirations are based on two basic, Healthy growth on the top line and reaching the appropriate level of profitability on the bottom, in the second quarter in an environment where consumers are focused on value and making tough tradeoffs in their spending decisions.

Speaker Change: At our financial community meeting earlier this year, we provided insight into our financial aspirations over the next 10 years.

Speaker Change: At their core those aspirations are based on two basic assumptions healthy growth on the topline and reaching the appropriate level of profitability on the bottom line and.

Michael: In the second quarter, in an environment where consumers are focused on value and making tough tradeoffs in their spending decisions, our team delivered newness, value, and reliability to our guests, resulting in top-line growth beyond our baseline expectations and even faster growth in guest traffic.

Michael Fiddelke: In the second quarter, in an environment where consumers are focused on value and making tough trade-offs in their spending decisions, our team delivered newness, value and reliability to our guests, resulting in top line growth beyond our baseline expectations, and even faster growth in guest traffic.

Brian Cornell: And importantly, even in a challenging environment, we also expanded our Q2 operating margin rate. We are really proud of these results, which reflect the hard work and dedication of our outstanding team. At the same time, this quarter was only the first step on a much longer journey, and we have a lot more work ahead of us. More specifically, with 2019 as a baseline, the second quarter was the first time in a while in which our EPS grew faster than the top line, with total revenue growth of 38% over that five-year period and EPS growth of more than 41%.

Speaker Change: In the second quarter in an environment, where consumers are focused on value and making tough tradeoffs in their spending decisions our team delivered newness value and reliability to our guests, resulting in top line growth beyond our baseline expectations and even faster growth in guest traffic.

Michael: Our team delivered newness, value, and reliability to our, Resulting in top-line growth beyond our baseline expectations and even faster growth in, And, importantly, even in a challenging environment, we also expanded our Q2 operating model.

Michael: And, importantly, even in a challenging environment, we also expanded our Q2 operating margin rate.

Michael Fiddelke: And importantly, even in a challenging environment, we also expanded our Q2 operating margin rate.

Speaker Change: And importantly, even in a challenging environment. We also expanded our Q2 operating margin rate. We are really proud of these results, which reflect the hard work and dedication of our outstanding team.

Michael Fiddelke: We are really proud of these results, which reflect the hard work and dedication of our outstanding team.

Michael Fiddelke: We are really proud of these results, which reflect the hard work and dedication of our outstanding team. At the same time, this quarter was only the first step on a much longer journey, and we have a lot more work ahead of us. More specifically, with 2019 as a baseline, the second quarter was the first time in a while in which our EPS grew faster than the top line, with total revenue growth of 38% over that five-year period and EPS growth of more than 41%. Our guidance for the remainder of the year implies further expansion of both of those metrics.

Michael: We are really proud of these results, which reflect the hard work and dedication of our outstanding, At the same time, this quarter was only the first step on a much longer journey, and we have a lot more work ahead. More specifically, with 2019 as a baseline, the second quarter was the first time in a while in which our EPS grew faster than the top line, with total revenue growth of 38% over that five-year period and EPS growth of more than 41%.

Michael Fiddelke: At the same time, this quarter was only the first step on a much longer journey, and we have a lot more work ahead of us. More specifically, with 2019 as a baseline, the second quarter was the first time in a while in which our EPS grew faster than the top line, with total revenue growth of 38% over that five-year period and EPS growth of more than 41%.

Speaker Change: At the same time this quarter was only the first step on a much longer journey and we have a lot more work ahead of us.

Speaker Change: More specifically with 2019 as a baseline the second quarter was the first time in a while in which our EPS grew faster than the top line with total revenue growth of 38% over that five year period, and EPS growth of more than 41%.

Michael Fiddelke: Our guidance for the remainder of the year implies further expansion of both of those metrics. And based on our growth initiatives, ongoing efficiency work and continued opportunity to reduce the impact of inventory shrink, we expect to see additional progress in the years ahead. We have a clear vision of how we're going to get there, and the right team in place to make it happen.

Brian Cornell: Our guidance for the remainder of the year implies further expansion of both of those metrics. And based on our growth initiatives, ongoing efficiency work and continued opportunity to reduce the impact of inventory shrink, we expect to see additional progress in the years ahead. We have a clear vision of how we're going to get there, and the right team in place to make it happen.

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

Speaker Change: Our guidance for the remainder of the year implies further expansion of both of those metrics.

Michael Fiddelke: And based on our growth initiatives, ongoing efficiency work, and continued opportunity to reduce the impact of inventory shrink, we expect to see additional progress in the years ahead. We have a clear vision of how we're going to get there, and the right team in place to make it happen.

Speaker Change: And based on our growth initiatives ongoing efficiency work and continued opportunity to reduce the impact of inventory shrink we expect to see additional progress in the years ahead, we have a clear vision of how we're going to get there and the right team in place to make it happen.

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

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

Brian Cornell: With that, I'll turn the call back over to Brian. Thanks, Michael.

Michael: And with that, I'll turn the call back over, Thanks, Michael.

Speaker Change: With that I'll turn the call back over to Brian.

Michael: We are really proud of these results, which reflect the hard work and dedication of our outstanding team.

Brian Cornell: Thanks, Michael.

Brian: Before we turn to your questions, I want to spend a minute on a concept we've touched on before, which is the way we uniquely leverage the power of and in our business.

Brian: Thanks, Michael before we turn to your questions I want to spend a minute on our concept we've touched on before which is the way we uniquely leveraged the power of and in our business.

Brian Cornell: Before we turn your questions, I want to spend a minute on a concept we've touched on before, which is the way we uniquely leverage the power of and in our business.

Brian Cornell: Before we turn your questions, I want to spend a minute on a concept we've touched on before, which is the way we uniquely leverage the power of and in our business. The reason target is so unique, and why we've developed such a special bond with consumers is because we offer something different than everyone else in the market. Place. We offer great prices, convenience, compelling promotions, and a great shopping experience. Our nearly 2,000 stores are accessible to the vast majority of the US population, and we have a comprehensive suite of fast and convenient digital fulfillment options.

Brian Cornell: Before we turn your questions, I want to spend a minute on a concept we've touched on before, which is the way we uniquely leverage the power of and in our business. The reason Target is so unique, and why we've developed such a special bond with consumers, is because we offer something different than everyone else in the market. Place. We offer great prices, convenience, compelling promotions, and a great shopping experience. Our nearly 2,000 stores are accessible to the vast majority of the U.S. population, and we have a comprehensive suite of fast and convenient digital fulfillment options.

Brian Cornell: The reason target is so unique, and why we've developed such a special bond with consumers is because we offer something different than everyone else in the market.

Brian: The reason Target is so unique and why we've developed such a special bond with consumers is because we offer something different than everyone else in the market.

Speaker Change: The recent target is so unique and why we developed such a special bond with consumers is because we offer something different than everyone else in the marketplace.

Brian Cornell: Place.

Brian Cornell: We offer great prices, convenience, compelling promotions, and a great shopping experience. Our nearly 2,000 stores are accessible to the vast majority of the US population, and we have a comprehensive suite of fast and convenient digital fulfillment options.

Brian: We offer great prices, convenience, compelling promotions, and a great shopping experience.

Speaker Change: We offer great prices convenience compelling promotions and a great shopping experience.

Brian: Our nearly 2000 stores are accessible to the vast majority of the U.S. population. And we have a comprehensive suite of fast and convenient digital fulfillment options, for a destination in discretionary categories like apparel, home and hardline, in frequency categories, like essentials and food and beverage, and in beauty, which perfectly straddles both.

Our nearly 2000 stores are accessible to the vast majority of the U S population and we have a comprehensive suite of fast and convenient digital fulfillment options.

Brian Cornell: For a destination in discretionary categories, like apparel, home, and hard lines, in frequency categories, like essential and food and beverage, and in beauty, which perfectly strannels both. We offer a broad range of items, serve as a convenient one-stop shop, and we're well known for curating our merchandise assortment. We are a style leader, we're known for celebrating seasonal moments, and we offer reliability on everyday wants and needs. When we're at our best, we achieve a proper balance between all of those aspects or go-to-market strategy, and the second quarter was a textbook example of target being target.

Brian Cornell: For a destination in discretionary categories, like apparel, home, and hard lines, in frequency categories, like essential and food and beverage, and in beauty, which perfectly straddles both. We offer a broad range of items, serve as a convenient one-stop shop, and we're well known for curating our merchandise assortment. We are a style leader; we're known for celebrating seasonal moments, and we offer reliability on everyday wants and needs. When we're at our best, we achieve a proper balance between all of those aspects or go-to-market strategy, and the second quarter was a textbook example of Target being Target.

Speaker Change: We're a destination in discretionary categories like apparel home and hard lines and frequency categories, like essentials, and food and beverage and in beauty, which perfectly Reynolds both.

Brian: We offer a broad range of items, serve as a convenient one-stop shop, and we're well known for curating our merchandise assortment.

Speaker Change: We offer a broad range of items serve as a convenient one stop shop, and we're well known procuring our merchandize assortment.

Brian Cornell: We are a style leader, we're known for celebrating seasonal moments, and we offer reliability on everyday wants and needs.

Brian: We are a style leader.

Speaker Change: We are a style leader, we're known for celebrating seasonal moments and we offer reliability on everyday wants and needs.

Brian Cornell: When we're at our best, we achieve a proper balance between all of those aspects or go-to-market strategy, and the second quarter was a textbook example of target being target.

Speaker Change: When we're at our best we achieve a proper balance between all of those aspects or go to market strategy.

Brian: We're known for celebrating seasonal moments.

Speaker Change: And the second quarter was a textbook example of target being target.

Michael: At the same time, this quarter was only the first step on a much longer journey, and we have a lot more work ahead of us. More specifically, with 2019 as a baseline, the second quarter was the first time in a while in which our EPS grew faster than the top line, with total revenue growth of 38% over that five-year period and EPS growth of more than 41%.

Brian Cornell: I'm incredibly proud of our team for delivering better than expected results, and in a environment where consumers are facing multiple challenges. Knowing there's more work to be done, our team is on their front foot, and ready to deliver more for our guests in the third quarter and beyond. Our team's positive energy is contagious, and I look forward to working with them as they continue to move target forward in the quarters and years ahead.

Brian Cornell: I'm incredibly proud of our team for delivering better-than-expected results, and in an environment where consumers are facing multiple challenges. Knowing there's more work to be done, our team is on their front foot and ready to deliver more for our guests in the third quarter and beyond. Our team's positive energy is contagious, and I look forward to working with them as they continue to move target forward in the quarters and years ahead.

Brian: And we offer reliability on everyday wants and needs.

Speaker Change: I'm incredibly proud of our team for delivering better than expected results in an environment, where consumers are facing multiple challenges.

Michael: Our guidance for the remainder of the year implies further expansion of both of those metrics.

Brian: When we're at our best, we achieve a proper balance between all of those aspects or go to market strategy.

Unknown Executive: So with that, we'll move to Q&A.

Brian: And the second quarter was a textbook example of Target being Target.

Speaker Change: Knowing there is more work to be done our team is on their front foot and ready to deliver more for our guests in the third quarter and beyond.

Brian: I'm incredibly proud of our team for delivering better than expected results in an environment where consumers are facing multiple challenges. Knowing there's more work to be done, our team is on their front foot and ready to deliver more for our guests in the third quarter and beyond.

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

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

Michael: And, based on our growth initiatives, ongoing efficiency work, and continued opportunity to reduce the impact of inventory shrink, we expect to see additional progress in the years ahead.

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

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

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

Unknown Executive: So with that, we'll move to Q&A.

Speaker Change: So with that we'll move to Q&A.

Unknown Executive: Rick, Michael and I will be happy to take your questions.

Speaker Change: Michael and I will be happy to take your questions.

Unknown Executive: Thank you.

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

Unknown Executive: Thank you.

Speaker Change: Thank you we will now begin the question and answer session to ask a question. Please press star followed by one to withdraw your request press Star two.

Unknown Executive: We will now begin the question and answer session.

Unknown Executive: We will now begin the question and answer session. To ask a question, please press star followed by one. To withdraw your request, press star two.

Unknown Executive: To ask a question, please press star followed by one.

Brian: Thanks, Michael.

Unknown Executive: To withdraw your request, press star two.

Katharine McShane: Our first question comes from Kate McChain with Goldman Sachs.

Kate McChain: Our first question comes from Kate McChain with Goldman Sachs. You may go ahead. Thanks for taking our question. You mentioned that you haven't seen a notable change in the consumer versus what you've seen year to date. Can you help us understand or reconcile your ability to get to the high end of the guidance range for quarter two, maintain the guidance range for Q3, but also flag that you are likely to get to the lower end for the same store sales guidance range for the year.

Unknown Executive: We will now begin the question and answer session.

Brian: Before we turn to your questions, I want to spend a minute on a concept we've touched on before, which is the way we uniquely leverage the power of AND in our business.

Speaker Change: Our first question comes from Kate Mcshane with Goldman Sachs. You May go ahead.

Brian: The reason Target is so unique and why we've developed such a special bond with consumers is because we offer something different than everyone else in the marketplace.

Unknown Executive: To ask a question, please press star followed by one.

Katharine McShane: You may go ahead.

Katharine McShane: Thanks for taking our question.

Brian: Place.

Unknown Executive: To withdraw your request, press star two.

Kate Mcshane: Good morning, Thanks for taking our question.

Brian: We offer great prices, convenience, compelling promotions, and a great shopping, experience. Our nearly 2,000 stores are accessible to the vast majority of the U.S. population, and we have a comprehensive suite of fast and convenient digital fulfillment options.

Katharine McShane: You mentioned that you haven't seen a notable change in the consumer versus what you've seen year to date.

Kate Mcshane: Our first question comes from Kate McShane with Goldman Sachs.

Speaker Change: You mentioned that you haven't seen a notable change in the consumer versus what you've seen year to date can you help us understand or reconcile your ability to get to the high end of the guidance range for quarter to maintain the guidance range for Q3, but also flag that you are likely to get to the lower end for the same store sales guidance.

Brian: For a destination in discretionary categories, like apparel, home, and hard lines, in frequency, categories, like essentials, and food and beverage, and in beauty, which perfectly straddles both.

Brian: We offer a broad range of items, serve as a convenient one-stop shop, and we're well known for curating our merchandise assortment.

Michael Fiddelke: Can you help us understand or reconcile your ability to get to the high end of the guidance range for quarter two, maintain the guidance range for Q3, but also flag that you are likely to get to the lower end for the same store sales guidance range for the year.

Speaker Change: For the year.

Michael Fiddelke: Thanks for the question, Kate.

Kate McChain: Thanks for the question, Kate. I think the headline is the start of your question. We see a consumer that's largely consistent with how we would have described the consumer over the last couple of quarters. A consumer that's been resilient overall in their spending and in spite of significant inflation over the last couple of years. A consumer that's choiceful, and so our combination of getting newness and value right in the second quarter led to the performance that was at the top end of our expectations.

Michael Fiddelke: Thanks for the question, Kate. I think the headline is the start of your question. We see a consumer that's largely consistent with how we would have described the consumer over the last couple of quarters. A consumer that's been resilient overall in their spending, and in spite of significant inflation over the last couple of years. A consumer that's choiceful, and so our combination of getting newness and value right in the second quarter led to the performance that was at the top end of our expectations. As you look at the balance of the year, we've got more of the year in front of us than is behind us, and we think it's proven to take a measured view against the kind of consumer behaviors.

Kate Mcshane: You may go ahead.

Brian: We are a style leader.

Speaker Change: Thanks for the question Kate.

Michael Fiddelke: I think the headline is the start of your question.

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

Michael Fiddelke: We see a consumer that's largely consistent with how we would have described the consumer over the last couple of quarters. A consumer that's been resilient overall in their spending and in spite of significant inflation over the last couple of years. A consumer that's choiceful, and so our combination of getting newness and value right in the second quarter led to the performance that was at the top end of our expectations.

Speaker Change: Thats choice full and so our combination of getting newness and value right in the second quarter led the performance that was at the top end of our expectations.

Michael Fiddelke: As you look at the balance of the year, we've got more of the year in front of us than is behind us, and we think it's proven to take a measured view against the kind of consumer behaviors.

Kate McChain: As you look at the balance of the year, we've got more of the year in front of us than is behind us, and we think it's proven to take a measured view against the kind of consumer behaviors. We'll be watching over the balance of the year, but importantly, that guidance is still centered on growth. We expect to continue to grow in Q3. We expect to have a growth story for the year, and you can see us playing often, appropriately, against that goal, but being measured in our outlook, we think that's the right way to position the business.

Speaker Change: Look at the balance of the year and we've got more of a year in front of us than is behind us and we think it's prudent to take a measured view.

Brian: Thanks for taking our question.

Speaker Change: The kind of consumer behaviors will be watching over the balance of the year, but importantly that guidance is still centered on growth. We expect to continue to grow in Q3, we expect to have a growth story for the year and you can see us playing offense appropriately against that goal, but being measured in our outlook, we think thats the right way to position the business.

Michael Fiddelke: We'll be watching over the balance of the year, but importantly, that guidance is still centered on growth.

Brian Cornell: We'll be watching over the balance of the year, but importantly, that guidance is still centered on growth. We expect to continue to grow in Q3. We expect to have a growth story for the year, and you can see us playing often, appropriately, against that goal, but being measured in our outlook. We think that's the right way to position the business.

Michael Fiddelke: We expect to continue to grow in Q3.

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

Brian Cornell: Kate, just a build on Michael's comments.

Kate McChain: Kate, just a build on Michael's comments. I think in this environment where there is so much consumer uncertainty, we're taking the appropriate approach to guidance in the third quarter, but as you heard from Rick and from Michael, we're continuing to play the win, and we feel very good about how we're prepared for the big seasonal moments. Williams. We're in back to school right now and back to college. We're excited about Halloween.

Brian Cornell: Kate, just a build on Michael's comments.

Kate Mcshane: You mentioned that you haven't seen a notable change in the consumer versus what you've seen here to date.

Kate Mcshane: Kate just to build on Michael's comments I think in this environment, where there is so much consumer uncertainty, we're taking the appropriate approach to guidance in the third quarter, but as you heard from Rick and for Michael We're continuing to play to win and we feel very good about how we're prepared for the big seasonal moments.

Brian Cornell: I think in this environment where there is so much consumer uncertainty, we're taking the appropriate approach to guidance in the third quarter, but as you heard from Rick and from Michael, we're continuing to play the win, and we feel very good about how we're prepared for the big seasonal moments.

Brian Cornell: I think in this environment where there is so much consumer uncertainty, we're taking the appropriate approach to guidance in the third quarter. But as you heard from Rick and from Michael, we're continuing to play to win, and we feel very good about how we're prepared for the big seasonal moments. Williams. We're in back to school right now and back to college. We're excited about Halloween. And Rick and his team are planning for some unique moments during the holiday season. So I don't want anyone to be confused with what we think is the appropriate outlook for the third quarter, but the fact that we're going to continue to play offense.

Kate Mcshane: Can you help us understand or reconcile your ability to get to the high end of the guidance range for quarter two, maintain the guidance range for Q3, but also flag that you are likely to get to the lower end for the safe store sales guidance range for the year?

Michael: Thanks for the question, Kate.

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

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

Michael: And as we look at the balance of the year, we've got more of the year in front of us than is behind us. And we think it's prudent to take a measured view against the kind of consumer behaviors we'll be watching over the balance of the year.

Brian: We're known for celebrating seasonal moments, and we offer reliability on everyday wants and needs.

Unknown Executive: Williams.

Brian: When we're at our best, we achieve a proper balance between all of those aspects of our, go-to-market strategy, and the second quarter was a textbook example of Target being Target.

Speaker Change: We're in back to school right now and back to college, we are excited about Halloween and Rick and his team are planning for some unique moments during the holiday season. So I don't want anyone to be confused with what we think is the appropriate outlook for the third quarter, but the fact that we're going to continue to play offense, we're going to look to drive traffic into our stores to visit stores site and make sure we deliver great.

Unknown Executive: We're in back to school right now and back to college.

Unknown Executive: We're excited about Halloween. And Rick and his team are planning for some unique moments during the holiday season.

Kate McChain: And Rick and his team are planning for some unique moments during the holiday season. So I don't want anyone to be confused with what we think is the appropriate outlook for the third quarter, but the fact that we're going to continue to play offense. We're going to look to drive traffic into our stores and visit our site and make sure we deliver great value along with newness for our against throughout the season. Thank you.

Unknown Executive: So I don't want anyone to be confused with what we think is the appropriate outlook for the third quarter, but the fact that we're going to continue to play offense.

Michael: But importantly, that guidance is still centered on growth, we expect to continue to grow in Q3, we expect to have a growth story for the year.

Michael: And you can see us playing offense appropriately against that goal.

Brian: But being measured in our outlook, we think that's the right way to position the business.

Unknown Executive: We're going to look to drive traffic into our stores and visit our site and make sure we deliver great value along with newness for our against throughout the season.

Brian Cornell: We're going to look to drive traffic into our stores and visit our site and make sure we deliver great value along with newness for our against throughout the season.

Speaker Change: Value along with newness for our guests throughout the season.

Unknown Executive: Thank you.

Brian: Okay, just to build on Michael's comments.

Speaker Change: Thank you.

Brian: I think in this environment where there is so much consumer uncertainty, we're taking the appropriate approach to guidance in the third quarter.

Speaker Change: Thank you. Our next question is from <unk> <unk> with Oppenheimer. You May go ahead, good morning, and thanks for taking my question also congrats on a nice quarter. So I just wanted to go back to the operating margin performance during the quarter. We saw a very strong deliveries during the quarter. How do you feel about the sustainability of the improvement and then over time getting back to that.

Rupesh Parikh: Our next question is from Rupesh Parikh with Oppenheimer.

Rupesh Parikh: Our next question is from Rupesh Parikh with Oppenheimer. You may go ahead. Good morning. Thanks for taking my question. I also congrats on a nice quarter. So I just wanted to go back to the operating margin before performance during the quarter. We still have very strong delivery during the quarter. How do you feel about the sustainability of the improvement and then, you know, over time, getting back to that 6% plus margins on annual basis?

Rupesh Parikh: Our next question is from Rupesh Parikh with Oppenheimer. You may go ahead. Good morning. Thanks for taking my question. I also congrats on a nice quarter.

Rupesh Parikh: You may go ahead.

Rupesh Parikh: Good morning.

Brian: But as you heard from Rick and from Michael, we're continuing to play to win.

Rupesh Parikh: Thanks for taking my question.

Rupesh Parikh: I also congrats on a nice quarter.

Rupesh Parikh: So I just wanted to go back to the operating margin before performance during the quarter.

Michael Fiddelke: So I just wanted to go back to the operating margin before performance during the quarter. We still have very strong delivery during the quarter. How do you feel about the sustainability of the improvement and then, you know, over time, getting back to that 6% plus margins on an annual basis?

Rupesh Parikh: We still have very strong delivery during the quarter.

Michael Fiddelke: How do you feel about the sustainability of the improvement and then, you know, over time, getting back to that 6% plus margins on annual basis?

Speaker Change: 6% plus margins on an annual basis.

Michael Fiddelke: Yeah.

Michael Fiddelke: Yeah. Thanks for the question, Rupesh. As we laid out at the start of the year, this year was going to be about progress to that better margin performance over time and two quarters in. I just can't take thanks the team enough for their work to put us solidly on the path of the improvement that we laid out for the year. If you unpacked the quarter, I hit on some of this in my remarks, but it always starts with the top line. So to grow the top line at 2% comp to see a category like a peril.

Brian: And we feel very good about how we're prepared for the big seasonal moments.

Michael Fiddelke: Thanks for the question, Rupesh.

Rupesh Parikh: Yeah. Thanks for the question, Rupesh. As we laid out at the start of the year, this year was going to be about progress to that better margin performance over time and two quarters in. I just can't take thanks the team enough for their work to put us solidly on the path of the improvement that we laid out for the year. If you unpacked the quarter, I hit on some of this in my remarks, but it always starts with the top line.

Speaker Change: Yes, thanks for the question <unk>.

Michael Fiddelke: As we laid out at the start of the year, this year was going to be about progress to that better margin performance over time and two quarters in.

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

Brian: I'm incredibly proud of our team for delivering better than expected results, in an environment where consumers are facing multiple challenges.

Michael Fiddelke: I just can't take thanks the team enough for their work to put us solidly on the path of the improvement that we laid out for the year.

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

Speaker Change: If you unpack the quarter I'll hit on some of this in my remarks, but it always starts with the top line so to grow the top line at a 2% comp to see a category like apparel. So we like the margins in apparel to see that category return to growth helped us from a mix perspective.

Brian: Knowing there's more work to be done, our team is on their front foot and ready to deliver, more for our guests in the third quarter and beyond.

Michael Fiddelke: So to grow the top line at 2% comp to see a category like a peril.

Rupesh Parikh: So to grow the top line at 2% comp to see a category like a peril. So we like the margins in a peril to see that category return to growth helped us from a mixed perspective. Great work by the team. To continue to find efficiency within the business. And we expected a more promotional environment this year. We've certainly seen that so far, but you can see the strength on the margin line to do the teams really hard work to continue to squeeze efficiencies out of the business in ways big and small.

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

Michael Fiddelke: So we like the margins in a peril to see that category return to growth helped us from a mixed perspective.

Brian Cornell: So we like the margins in a peril to see that category return to growth helped us from a mixed perspective. Great work by the team. To continue to find efficiency within the business. And we expected a more promotional environment this year. We've certainly seen that so far, but you can see the strength on the margin line to do the team's really hard work to continue to squeeze efficiencies out of the business in ways big and small. And we're pleased with the progress we're making on shrink. Now, there's some noise quarter to quarter, but how that will come through.

Unknown Executive: So, with that, we'll move to Q&A.

Michael Fiddelke: Great work by the team.

Speaker Change: Great work by the team to continue to find efficiency within the business and we expected a more promotional environment. This year, we've certainly seen that so far but you can see the strength on the margin line due to the team's really hard work to continue to squeeze efficiencies out of the business in ways Big and small.

Unknown Executive: Rick, Michael, and I will be happy to take your questions.

Michael Fiddelke: To continue to find efficiency within the business.

Michael Fiddelke: And we expected a more promotional environment this year. We've certainly seen that so far, but you can see the strength on the margin line to do the teams really hard work to continue to squeeze efficiencies out of the business in ways big and small.

Unknown Executive: Thank you.

Michael Fiddelke: And we're pleased with the progress we're making on shrink.

Rupesh Parikh: And we're pleased with the progress we're making on shrink. Now, there's some noise quarter to quarter, but how that will come through. So tried to unpack some of those details in my prepare remarks. But the net punch line there is we're ahead of where we expected to be in terms of progress on shrink to. So all of that's adding up to an earnings result. We're certainly pleased with and are going forward to continue to continue that momentum in Q3 and Q4.

Speaker Change: And we're pleased with the progress we're making on shrink now theres, some noise quarter to quarter, but how that will come through so I tried to unpack some of those details in my prepared remarks.

Michael Fiddelke: Now, there's some noise quarter to quarter, but how that will come through.

Michael Fiddelke: So tried to unpack some of those details in my prepare remarks.

Brian Cornell: So tried to unpack some of those details in my prepare remarks. But the net punch line there is we're ahead of where we expected to be in terms of progress on shrink to. So all of that's adding up to an earnings result. We're certainly pleased with and are going forward to continue to continue that momentum in Q3 and Q4.

Michael Fiddelke: But the net punch line there is we're ahead of where we expected to be in terms of progress on shrink to.

Speaker Change: But the net punch line. There is we're ahead of where we expected to be in terms of progress on shrink too. So all of that's adding up to an earning as a result, we're certainly pleased with our work going forward will be continue that to continue that momentum in Q3, and Q4, especially I'll just amplify a couple of the comments that you've heard us make over the last few quarters it really.

Michael Fiddelke: So all of that's adding up to an earnings result.

Michael Fiddelke: We're certainly pleased with and are going forward to continue to continue that momentum in Q3 and Q4.

Michael Fiddelke: For patient, I just amplify a couple of the comments that you've heard us make over the last few quarters and really recognize the focus of teams placed on retail fundamentals.

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

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

Michael: Is the focus of the team has placed on retail fundamentals, Michael talk about the progress and reliability improving our in stocks rich talked about the improvement in value and the commitments, we've made to making sure we provide value to our guests.

Michael Fiddelke: Michael talked about the progress in reliability, improving our in stocks.

Unknown Executive: Great. Thank you.

Michael Fiddelke: Rick's talked about the improvement in value and the commitments we've made to making sure we provide value to our guests.

Unknown Executive: I'll pass it along. Thank you.

Michael Fiddelke: No matter where they're shopping and how they're shopping.

No matter, where they're shopping and how they're shopping and I think that focus on controlling the things. We can control is really helping us improve our operating margin performance, but the team has been very focused on retail fundamentals execution, each and every day, both from a physical standpoint, and a digital standpoint, and I think youre seeing the benefits of that pay off.

Michael Fiddelke: And I think that focus on controlling the things we can control is really helping us improve our operating market performance.

Michael Fiddelke: But the team has been very focused on retail fundamentals, execution each and every day, both from a physical standpoint and a digital standpoint.

Michael Fiddelke: And I think you're seeing the benefits of that payoff.

Brian Cornell: And I think you're seeing the benefits of that payoff.

Unknown Executive: Great.

Unknown Executive: Great. Thank you.

Unknown Executive: Thank you.

Unknown Executive: I'll pass it along.

Unknown Executive: I'll pass it along. Thank you.

Speaker Change: Great. Thank you I'll pass it along.

Unknown Executive: Thank you.

Christopher Horvers: Our next question is from Chris Horvers with JP Morgan.

Chris Horvers: Our next question is from Chris Horvers with JP Morgan. You may go ahead. Thanks. Good morning. My first question is can talk more specifically about what drove the strength and the merchant dice margin strategies in the second quarter. And what are you embedding in the back app in terms of sustainability? Yeah, thanks for the question, Chris. There's a lot that goes into that margin line on any quarter. And so the headlines are some we've touched on a little bit already.

Chris Horvers: Our next question is from Chris Horvers with JP Morgan.

Chris <unk>: Thank you. Our next question is from Chris <unk> with Jpmorgan you May go ahead.

Christopher Horvers: You may go ahead.

Michael Fiddelke: You may go ahead. Thanks. Good morning. My first question is can talk more specifically about what drove the strength and the merchant dice margin strategies in the second quarter. And what are you embedding in the back app in terms of sustainability? Yeah, thanks for the question, Chris.

Unknown Executive: We will now begin the question and answer session.

Christopher Horvers: Thanks.

Christopher Horvers: Good morning.

Chris <unk>: Thanks. Good morning. So my first question is can you talk more specifically about what drove the strength in our merchandise margin strategies in the second quarter and what are you embedding in the back half in terms of sustainability.

Christopher Horvers: My first question is can talk more specifically about what drove the strength and the merchant dice margin strategies in the second quarter.

Unknown Executive: To ask a question, please press star followed by 1. To withdraw your request, press star 2.

Michael Fiddelke: And what are you embedding in the back app in terms of sustainability?

Kate Mcshane: Our first question comes from Kate McShane with Goldman Sachs.

Michael Fiddelke: Yeah, thanks for the question, Chris.

Speaker Change: Yes. Thanks for the question, Chris There is a lot that goes into that margin line on any quarter and so the.

Michael Fiddelke: There's a lot that goes into that margin line on any quarter.

Michael Fiddelke: There's a lot that goes into that margin line on any quarter. And so the headlines are some we've touched on a little bit already. We've definitely seen a more promotional environment. But against that backdrop, the teams have worked hard to find efficiencies within the business. And that can show up in ways big and small to give a tangible example. And one of the things that we've continued to see progress with is the most expensive thing we do in fulfilling product is shipping a brown box. And we've seen significant improvement in the cost per unit of that activity.

Michael Fiddelke: And so the headlines are some we've touched on a little bit already.

Speaker Change: The headlines are some we've touched on a little bit already we've definitely seen a more promotional environment, but against that backdrop. The teams have worked hard to find efficiencies within the business.

Michael Fiddelke: We've definitely seen a more promotional environment. But against that backdrop, the teams have worked hard to find efficiencies within the business.

Chris Horvers: We've definitely seen a more promotional environment. But against that backdrop, the teams have worked hard to find efficiencies within the business. And that can show up in ways big and small to give a tangible example. And one of the things that we've continued to see progress with is the most expensive thing we do in fulfilling product is shipping a brown box. And we've seen significant improvement in the cost per unit of that activity.

Chris Horvers: It's teams have worked better align inventory with where we see demand. So we have to split shipments less frequently. And the core productivity within those processes big improvements in our stores team delivering that product more efficiently more efficiently as we pick and pack in the stores. And so that work adds up and the teams have been at it for multiple quarters now and we're seeing it pay off. I understood. And then on the top line, I was just curious how you forecast the business.

Michael Fiddelke: And that can show up in ways big and small to give a tangible example.

Speaker Change: That can show up in ways Big and small to give a tangible example of one of the things that we've continued to see progress with us the.

Michael Fiddelke: And one of the things that we've continued to see progress with is the most expensive thing we do in fulfilling product is shipping a brown box. And we've seen significant improvement in the cost per unit of that activity.

Speaker Change: The most expensive thing, we do and fulfilling product is shipping a brown box and we've seen significant improvement in the cost per unit of that activity as teams have worked to better align inventory with where we see demand. So we have to split shipments less frequently and the core productivity within those processes big improvements in.

Michael Fiddelke: It's teams have worked better align inventory with where we see demand. So we have to split shipments less frequently.

Michael Fiddelke: It's teams have worked better align inventory with where we see demand. So we have to split shipments less frequently. And the core productivity within those processes, big improvements in our stores team delivering that product more efficiently, more efficiently as we pick and pack in the stores.

Michael Fiddelke: And the core productivity within those processes big improvements in our stores team delivering that product more efficiently more efficiently as we pick and pack in the stores.

Michael Fiddelke: And so that work adds up and the teams have been at it for multiple quarters now and we're seeing it pay off.

Speaker Change: Our stores team delivering that product more efficiently more efficiently as we pick and pack in the stores and so that work adds up and the teams have been at it for multiple quarters now and we're seeing that pay off.

Michael Fiddelke: I understood.

Michael Fiddelke: And so that work adds up, and the teams have been at it for multiple quarters now, and we're seeing it pay off. I understood.

Speaker Change: Understood and then on the topline I was just curious how you forecast that business. Obviously, the consumer has been a lot more volatile a lot more event driven there seems like there was some pause in the back half July as you plan. The business do you look at seasonal revenues building off the second quarter are you looking at.

Michael Fiddelke: And then on the top line, I was just curious how you forecast the business.

Michael Fiddelke: And then on the top line, I was just curious how you forecast the business. Obviously, the consumer's been a lot more volatile, a lot more event-driven. There seems like there was some pause in the back after I, as you plan the business, do you look at seasonal revenues, you know, building off the second quarter? Are you looking at facts, are you looking at trends versus 2019? Just some insight there in terms of how you forecast the business.

Michael Fiddelke: Obviously, the consumer's been a lot more volatile, a lot more event-driven.

Chris Horvers: Obviously, the consumer's been a lot more volatile, a lot more event-driven. There seems like there was some pause in the back after I, as you plan the business, do you look at seasonal revenues, you know, building off the second quarter, are you looking at facts, are you looking at trends versus 2019, just some insight there in terms of how you forecast the business. Chris, I think you've covered many of the things we look at on an ongoing basis. And I think we factored all those different variables into our outlook for the period in the quarter. Thanks very much. Thanks, Chris.

Michael Fiddelke: There seems like there was some pause in the back after I, as you plan the business, do you look at seasonal revenues, you know, building off the second quarter, are you looking at facts, are you looking at trends versus 2019, just some insight there in terms of how you forecast the business.

Unknown Executive: Thank you.

Speaker Change: Facts are you looking at trends versus 2019, just some insight there in terms of how you forecast the business.

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

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

Michael Fiddelke: Thanks very much.

Unknown Executive: Thanks, Chris.

Unknown Executive: Thanks very much.

Speaker Change: Thanks very much.

Unknown Executive: Thank you.

Unknown Executive: Thanks, Chris.

Chris <unk>: Thanks, Chris.

Unknown Executive: Thank you.

Simeon Gutman: Our next question is from Simeon Gutman with Morgan Stanley.

Simeon Gutman: Our next question is from Simeon Gutman with Morgan Stanley. You may go ahead. Hi, good morning, everyone. I wanted to ask on near term question first. Sounds like comps, June and July were relatively steady. I don't know if you've talked about products for back to school curious about how the consumer is behaving and then connected to it. Any expectation when discretionary comps may inflict a positive. Simeon, as we sit here today, obviously we're in the heart of back to school season, kind of the early chapters of back to college.

Simeon Gutman: Our next question is from Simeon Gutman with Morgan Stanley. You may go ahead. Hi, good morning, everyone. I wanted to ask on near term question first. Sounds like comps, June and July were relatively steady. I don't know if you've talked about products for back to school. Curious about how the consumer is behaving and then connected to it. Any expectation when discretionary comps may inflict a positive.

Speaker Change: Thank you. Our next question is from Simeon Gutman with Morgan Stanley You May go ahead.

Unknown Executive: You may go ahead.

Simeon Gutman: You may go ahead.

Simeon Gutman: Hi, good morning, everyone.

Simeon Gutman: I wanted to ask on near term question first.

Kate Mcshane: Good morning.

Simeon Gutman: Sounds like comps, June and July were relatively steady.

Simeon Gutman: Sounds like comps June and July were relatively steady Ken I don't know if you talked about product for back to school curious about how the consumer is behaving and then connected to it.

Kate Mcshane: Thanks for taking our question.

Simeon Gutman: I don't know if you've talked about products for back to school curious about how the consumer is behaving and then connected to it.

Simeon Gutman: Any expectation when discretionary comps may inflict a positive.

Speaker Change: Any expectation when does discretionary comps may inflict positive.

Kate Mcshane: You mentioned that you haven't seen a notable, change in the consumer versus what you've seen here to date.

Brian: We're in back to school right now and back to college.

Brian Cornell: Simeon, as we sit here today, obviously we're in the heart of back to school season, kind of the early chapters of back to college.

Brian Cornell: Simeon, as we sit here today, obviously we're in the heart of back-to-school season, kind of the early chapters of back to college. And as Rick talked about excited about the upcoming Halloween season, I think as we sit here today, we feel well prepared for those big seasonal moments. And we'll continue to make sure we lean in with a great physical and digital experience.

Ken: Yes, I mean as we sit here today, obviously, we're in the heart of back to school season kind of the early chapters of back to college and as Rick talked about excited about the upcoming Halloween season, I think as we sit here today, we feel well prepared for those big seasonal moments and we will continue to make sure we lean in with a great physical and.

Michael: Thanks for the question, Kate.

Michael: I think the headline is at the start of your question.

Brian Cornell: And as Rick talked about excited about the upcoming Halloween season, I think as we sit here today, we feel well prepared for those big seasonal moments.

Simeon Gutman: And as Rick talked about excited about the upcoming Halloween season, I think as we sit here today, we feel well prepared for those big seasonal moments. And we'll continue to make sure we lean in with a great physical and digital experience. Maybe one follow up. Can I ask about the price investments, the 5,000 items that have been lowered? If one, I assume you're pleased with some of the elasticity. Does it make you think about price positioning broadly?

Brian: We're excited about Halloween. And Rick and his team are planning for some unique moments during the holiday season.

Brian Cornell: And we'll continue to make sure we lean in with a great physical and digital experience.

Digital experience.

Unknown Executive: Maybe one follow up.

Maybe one follow up can I ask about the price investments. The 5000 items that have been lowered if one I assume you're pleased with some of the elasticity does it make you think about price positioning broadly are there opportunities to enhance the price position and other places.

Simeon Gutman: Can I ask about the price investments, the 5,000 items that have been lowered?

Simeon Gutman: Can I ask about the price investments, the 5,000 items that have been lowered? If one, I assume you're pleased with some of the elasticity. Does it make you think about price positioning broadly? Are there opportunities to enhance the price position in other places?

Simeon Gutman: If one, I assume you're pleased with some of the elasticity.

Simeon Gutman: Does it make you think about price positioning broadly?

Simeon Gutman: Are there opportunities to enhance the price position in other places?

Michael: We see, a consumer that's largely consistent with how we would have described the consumer over the last couple of quarters, a consumer that's been resilient overall in their spending and flat in spite of significant inflation over the last couple of years, a consumer that's choiceful.

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

Simeon Gutman: Thanks.

Brian Cornell: Thanks.

Simeon Gutman: Are there opportunities to enhance the price position in other places? Thanks. Simeon, I think we sit here today. We feel really good about the way that consumers reacted to the price investments we've made on those 5,000 frequently purchased items, but it really goes beyond those investments. If you're a target circle member, you're getting personalized offers every time you shop. If you're using a target circle card, you have the opportunity for that 5% discount.

Brian Cornell: Simeon, I think we sit here today. We feel really good about the way that consumers reacted to the price investments we've made on those 5,000 frequently purchased items, but it really goes beyond those investments. If you're a Target Circle member, you're getting personalized offers every time you shop. If you're using a Target Circle card, you have the opportunity for that 5% discount. If you're taking advantage of the amazing value we provide through our own brands, that's just one more way to find value when you're shopping with Targets. So it's really a bundle of all those things that we do each and every day to strengthen the relationship we have with the guests and providing them with the value they're looking for in this economic environment.

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

Speaker Change: Yes, excuse me I think we sit here today, we feel really good about the way the consumers reacted to the price investments. We've made on those 5000 are frequently purchased items, but it really goes beyond those investments if youre right target circle remember youre getting a personalized offers every time you shop.

Brian Cornell: If you're a target circle member, you're getting personalized offers every time you shop.

Brian Cornell: If you're using a target circle card, you have the opportunity for that 5% discount.

Speaker Change: We're using our target circle card, yes, the opportunity for that 5% discount. If you were taking advantage of the amazing value we provide through our own brands. That's just one more way to find value when you're shopping with target. So it's really a bundle of all of those things that we do each and every day to strengthen the relationship we have the guests and provide them with the value of their look.

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

Simeon Gutman: If you're taking advantage of the amazing value we provide through our own brands, that's just one more way to find value when you're shopping with targets. So it's really a bundle of all those things that we do each and every day to strengthen the relationship we have with the guests and providing them with the value they're looking for in this economic environment. Thank you.

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

Brian: Thank you.

Speaker Change: For in this economic environment.

Simeon Gutman: Thank you.

Unknown Executive: Thank you.

Speaker Change: Thank you.

Unknown Executive: Thank you.

Speaker Change: Thank you.

Rupesh Parikh: Our next question is from Rupesh Parikh with Oppenheimer.

Robbie Owens: Our next question comes from Robbie Owens with Bank of America.

Robbie Owens: Our next question comes from Robbie Owens with Bank of America. You may go ahead. Hey, good morning in the outstanding quarter. I was hoping maybe from Brian or others, you could talk about the couple of things target circle penetration. It hasn't been going up. You know, is that expected to change in also same day delivery is still I guess target circle 360 as you call it is still not growing as fast as drive up.

Robbie Owens: Our next question comes from Robbie Owens with Bank of America. You may go ahead. Hey, good morning in the outstanding quarter.

Robbie <unk>: Thank you. Our next question comes from Robbie <unk> with Bank of America. You May go ahead.

Robbie Owens: You may go ahead.

Robbie Owens: Hey, good morning in the outstanding quarter.

Rupesh Parikh: You may go ahead.

Robbie: Hey, good morning.

Standing quarter.

Robbie Owens: I was hoping maybe from Brian or others, you could talk about the couple of things target circle penetration.

Michael Fiddelke: I was hoping maybe from Brian or others, you could talk about the couple of things Target Circle penetration. It hasn't been going up. You know, is that expected to change in also same day delivery is still I guess target circle 360 as you call it is still not growing as fast as drive up. Is that expected to change, and would changing these things up potentially be a sales driver, and then is there any margin implication from that on the offset?

Speaker Change: I was hoping.

Speaker Change: Maybe from Brian or or others, you could talk about.

Speaker Change: A couple of things target circle penetration.

Robbie Owens: It hasn't been going up.

Speaker Change: It hasn't been going up.

Robbie Owens: You know, is that expected to change in also same day delivery is still I guess target circle 360 as you call it is still not growing as fast as drive up.

Speaker Change: Is that expected to change and also same day delivery is still I guess target circle 360, as you call. It is still not growing as fast as drive up is that expected to change in wood changing these things are potentially be a sales driver and then is there any margin implications.

Michael Fiddelke: Is that expected to change and would changing these things up potentially be a sales driver and then is there any margin implication from that on the offset?

Speaker Change: <unk> from that on the on the offset.

Michael Fiddelke: Robbie, you've got three or four questions there.

Robbie Owens: Is that expected to change and would changing these things up potentially be a sales driver and then is there any margin implication from that on the offset? Robbie, you've got three or four questions there. I'm going to let Michael start and I'll pick it up from there. Yeah, importantly, Robbie, I'll kind of take your second point first. We're really pleased with our circle 360, same day delivery business. Both it and drive up grew in the low teams and so we've seen some acceleration in that business on the heels of our relauncher circle and so we're encouraged by that.

Michael Fiddelke: Robbie, you've got three or four questions there.

Speaker Change: Yes, Ravi you got three or four questions there.

Michael Fiddelke: I'm going to let Michael start and I'll pick it up from there.

Michael Fiddelke: I'm going to let Michael start, and I'll pick it up from there. Yeah, importantly, Robbie, I'll kind of take your second point first. We're really pleased with our Circle 360, same day delivery business. Both it and drive up grew in the low teams, and so we've seen some acceleration in that business on the heels of our relauncher circle, and so we're encouraged by that. And importantly, for both of those services, we've talked about this before, but I think it warrants a re-emphasis. The thing we see when people engage with drive up and with circle 360, same day delivery, is that they spend meaningfully more at Target and total, and their in-store shopping actually increases after they become users of those services.

Michael: But importantly, that guidance is still centered on growth.

Speaker Change: I'll start I'll pick it up from there, Yes, importantly, Ravi I'll take the second 0.1st we're really pleased with our circle 360, <unk> same day delivery business, both it and drive up grew in the low teens and.

Michael: We expect to continue to grow in Q3.

Michael Fiddelke: Yeah, importantly, Robbie, I'll kind of take your second point first.

Michael: We expect to have a growth story for the year. And you can see us playing offense appropriately against that goal, but being measured in our outlook.

Michael Fiddelke: We're really pleased with our circle 360, same day delivery business. Both it and drive up grew in the low teams and so we've seen some acceleration in that business on the heels of our relauncher circle and so we're encouraged by that.

Michael: We think that's the right way to position the business.

Speaker Change: So we've seen some acceleration in that business on the heels of our relaunch of circle and so we're encouraged by that and importantly for both of those services. We've talked about this before but I think it warrants a re emphasis.

Michael Fiddelke: And importantly, for both of those services, we've talked about this before, but I think it warrants a re-emphasis.

Robbie Owens: And importantly, for both of those services, we've talked about this before, but I think it warrants a re-emphasis. The thing we see when people engage with drive up and with circle 360, same day delivery as they spend meaningfully more at target and total and they're in store shopping actually increases after they come users of those services. And so we continue to watch that relationship closely and growth of those services means growth in our share of wallet with the consumers that use those services.

Michael Fiddelke: The thing we see when people engage with drive up and with circle 360, same day delivery as they spend meaningfully more at target and total and they're in store shopping actually increases after they come users of those services.

Speaker Change: We see when people engage with drive up and with Circle 360 same day delivery as they spend meaningfully more target in total and the in store shopping actually increases after the AECOM users of those services and so we continue to watch that relationship closely and growth of those services means of growth and our share of wallet with the consumers.

Brian: Kate, just to build on Michael's comments, I think in this environment where there is so much consumer uncertainty, we're taking the, appropriate approach to guidance in the third quarter.

Brian: But as you heard from Rick and from Michael, we're continuing to play to win.

Brian: And we feel very good about how we're prepared for the, big seasonal moments.

Brian: We're in back-to-school right now and back-to-college.

Brian: We're excited about, Halloween and Rick and his team are planning for some unique moments during the holiday season.

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

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

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

Speaker Change: Use those services.

Unknown Executive: Thank you.

Michael Fiddelke: Speaking to circle more specifically, and I believe your question was focused on circle card penetration.

Robbie Owens: Speaking to circle more specifically, and I believe your question was focused on circle card penetration. We see a lot of opportunity over time with the relauncher circle to bring some investment back to growing our card business. One of the things that that relauncher circle provides is it brings the core base circle program where guests can find incredible value through the personalized offers that they receive every day. With the circle card program where you can save an extra 5% if you're a circle card member, you know with the circle 360 program if you want the best of target brought to your doorstep.

Michael Fiddelke: Speaking to Circle more specifically, and I believe your question was focused on Circle card penetration. We see a lot of opportunity over time with the relauncher circle to bring some investment back to growing our card business. One of the things that that relauncher circle provides is it brings the core base circle program where guests can find incredible value through the personalized offers that they receive every day. With the Circle Card program where you can save an extra 5% if you're a Circle Card member, you know with the Circle 360 program if you want the best of Target brought to your doorstep.

Speaker Change: Speaking to circle more specifically and I believe your question was focused on circle card penetration.

Unknown Executive: Thank you.

Michael Fiddelke: We see a lot of opportunity over time with the relauncher circle to bring some investment back to growing our card business.

Speaker Change: We see a lot of opportunity over time with the relaunch of circle too so.

Speaker Change: Bring some investment back to growing our card business.

Michael Fiddelke: One of the things that that relauncher circle provides is it brings the core base circle program where guests can find incredible value through the personalized offers that they receive every day.

Speaker Change: One of the things that that relaunch of circle provides as it brings the core base circle program, where guests can find incredible value through the personalized offers that they receive everyday with the circle card program, where you can save an extra 5% if youre a circle card member.

Michael Fiddelke: With the circle card program where you can save an extra 5% if you're a circle card member, you know with the circle 360 program if you want the best of target brought to your doorstep.

The circle of 360 program. If you want the best of target brought to your doorstep and the integration of those programs. We think provides a good jumping off point over time to continue to reinvigorate the circle card business, but that's going to be a journey of quarters and years, probably just to clarify a couple of points from a base circle program standpoint, we did.

Michael Fiddelke: And you know the integration of those programs we think provides a good jumping off point over time to continue to reinvigorate the circle card business, but that's going to be a journey of quarters and years.

Robbie Owens: And you know the integration of those programs we think provides a good jumping off point over time to continue to reinvigorate the circle card business, but that's going to be a journey of quarters and years. Probably just to clarify a couple of points from a base circle program standpoint, we did note that while we start with a base of over 100 million members during the July circle week, we saw two million new members join the program.

Rick Gomez: And you know the integration of those programs we think provides a good jumping-off point over time to continue to reinvigorate the circle card business, but that's going to be a journey of quarters and years. Probably just to clarify a couple of points from a base circle program standpoint, we did note that while we start with a base of over 100 million members during the July circle week, we saw two million new members join the program. You talked about Drive Up and Target Circle. 360 Drive Up has been a very sticky service for us and just continues to grow.

Michael Fiddelke: Probably just to clarify a couple of points from a base circle program standpoint, we did note that while we start with a base of over 100 million members during the July circle week, we saw two million new members join the program.

Speaker Change: Note that while we start with a base of over 100 million members. During the July Circle week, we saw 2 million new members joined the program.

Michael Fiddelke: You talked about drive up and target circle 360 drive up has been a very sticky service for us and just continues to grow. And during the second quarter, we saw drive up grow over 14% and a nice acceleration in target circle 360 same day delivery of almost 14%.

Robbie Owens: You talked about drive up and target circle 360 drive up has been a very sticky service for us and just continues to grow. And during the second quarter, we saw drive up grow over 14% and a nice acceleration in target circle 360 same day delivery of almost 14%. So we see tremendous opportunity to continue to expand our target circle 360 program, but I'd really highlight drive up has been a stellar performance for us for many years now and just continues to grow.

Speaker Change: You talked about drive up and target circle, $3 60, and drive US there has been a very sticky service for us and just continues to grow and during the second quarter, we saw drive up ROE over 14% and a nice acceleration and target Circle 360 same day delivery of almost 14%. So we see tremendous.

Rick Gomez: And during the second quarter, we saw drive up grow over 14% and a nice acceleration in Target Circle 360 same day delivery of almost 14%. So we see tremendous opportunity to continue to expand our target circle 360 program, but I'd really highlight drive up has been a stellar performance for us for many years now and just continues to grow. It was a $2 billion business for us in the second quarter. And I think Michael year to date is almost $4 billion. So it's been a really important service that we know our guests appreciate. But to Michael's point, we know they're a drive-up user.

Michael Fiddelke: So we see tremendous opportunity to continue to expand our target circle 360 program, but I'd really highlight drive up has been a stellar performance for us for many years now and just continues to grow. It was a $2 billion business for us in the second quarter.

Speaker Change: Opportunity to continue to expand our target circle 360 program, but I would really highlight drive up has been a stellar performance for us for many years now and just continues to grow it was about $2 billion business for us in the second quarter and I think Michael year to date is almost $4 billion. So it's been a really important service that we.

Robbie Owens: It was a $2 billion business for us in the second quarter. And I think Michael year to date is almost $4 billion. So it's been a really important service that we know our guests appreciate. But to Michael's point, we know they're a drive up user. They're going to spend time in a target store and we really like that combination. Sounds great.

Michael Fiddelke: And I think Michael year to date is almost $4 billion.

Michael Fiddelke: So it's been a really important service that we know our guests appreciate.

Michael Fiddelke: But to Michael's point, we know they're a drive up user.

Speaker Change: Our guests appreciate but to Michael's point, we know drive up user theyre going to spend time at a target store and we really like that combination.

Michael Fiddelke: They're going to spend time in a target store and we really like that combination.

Rick Gomez: They're going to spend time in a Target store, and we really like that combination.

Robbie Owens: Sounds great.

Unknown Executive: Sounds great. Thanks, Brian.

Robbie Owens: Thanks Brian.

Brian Cornell: Thanks Brian. Thank you.

Michael: Sounds great. Thanks, Brian.

Rupesh Parikh: Our next question is from, Rupesh Parikh with Oppenheimer.

Robbie Owens: Thank you.

Ed Kelly: Thank you. Our next question is from Ed Kelly with Wells Fargo. You may go ahead. Yeah, hi. Good morning. I was hoping that you could provide a little bit more detail on discretionary comps, you know, still negative here. What do you think's happening with market share at this point? And then maybe can you talk a bit about, you know, when you think that category is in total, you know, may reflect positively.

Edward Kelly: Our next question is from Ed Kelly with Wells Fargo.

Ed Kelly: Our next question is from Ed Kelly with Wells Fargo. You may go ahead. Yeah, hi. Good morning. I was hoping that you could provide a little bit more detail on discretionary comps, you know, still negative here. What do you think's happening with market share at this point? And then maybe can you talk a bit about, you know, when you think that category is in total, you know, may reflect positively. Ed, I'm going to let Rick talk about some of the trends we're seeing in discretionary categories.

Speaker Change: Thank you. Our next question is from Ed Kelly with Wells Fargo. You May go ahead.

Edward Kelly: You may go ahead.

Unknown Executive: You may go ahead.

Edward Kelly: Yeah, hi.

Rupesh Parikh: Good morning.

Edward Kelly: Good morning.

Ed Kelly: Yes, hi, good morning.

Edward Kelly: I was hoping that you could provide a little bit more detail on discretionary comps, you know, still negative here.

Ed Kelly: I was hoping you could provide a little bit more detail on discretionary comps still negative here, what do you think's happening with market share at this point.

Edward Kelly: What do you think's happening with market share at this point?

Edward Kelly: And then maybe can you talk a bit about, you know, when you think that category is in total, you know, may reflect positively.

Speaker Change: And then maybe can you talk a bit about when you think that category in total.

Speaker Change: EMEA inflect positively.

Rick Gomez: Ed, I'm going to let Rick talk about some of the trends we're seeing in discretionary categories.

Rick Gomez: Ed, I'm going to let Rick talk about some of the trends we're seeing in discretionary categories. He talked about the strength and apparel and some of the subsets within apparel. But we're also seeing green shoots in other areas, and we certainly think that over time in categories like home, led by kitchen, as these purchase cycles become ones that need to be replaced. You're going to see some strength in those categories, but Rick, why don't you walk Ed through some of the trends we're seeing in discretionary categories? Sure, I'd be happy to give a little color commentary to the trends and what's driving those trends.

Speaker Change: Yes, I'm going to let Rick talk about some of the trends we're seeing in discretionary categories, you talked about the strength in apparel and some of the subsets within apparel, but we're also seeing green shoots in other areas and we certainly think that over time in categories like home led by kitchen as these purchase cycles become.

Rick Gomez: He talked about the strength and apparel and some of the subsets within apparel.

Ed Kelly: He talked about the strength and apparel and some of the subsets within apparel. But we're also seeing green shoots in other areas and we certainly think that over time in categories like home led by kitchen as these purchase cycles become ones that need to be replaced. You're going to see some strength in those categories, but Rick, why don't you walk Ed through some of the trends we're seeing in discretionary categories? Sure, I'd be happy to give a little color commentary to the trends and what's driving those trends.

Rick Gomez: But we're also seeing green shoots in other areas and we certainly think that over time in categories like home led by kitchen as these purchase cycles become ones that need to be replaced.

Speaker Change: Once that need to be replaced youre going to see some strength in those categories, but Rick why don't you walk through some of the trends we're seeing in discretionary categories.

Rick Gomez: You're going to see some strength in those categories, but Rick, why don't you walk Ed through some of the trends we're seeing in discretionary categories?

Rupesh Parikh: Thanks for taking my question.

Rick Gomez: Sure, I'd be happy to give a little color commentary to the trends and what's driving those trends.

Rupesh Parikh: Also, congrats on a nice quarter.

Rick: I'd be happy to give a little color commentary to the trends and what's driving those trends.

Rupesh Parikh: So I just want to go back to the operating margin performance during the quarter.

Rick Gomez: And what we're seeing in discretionary is when we offer on trend stylish product at a great price, the consumer response.

Ed Kelly: And what we're seeing in discretionary is when we offer on trend stylish product at a great price, the consumer response. And we're seeing that in apparel, apparel delivered a three comp. So real bright spots was all in motion, our performance brand with a team did a fantastic job on fabrication colors fit a $25 leggings with a fan favorite and really demonstrated the power of fashion combined with affordability. Beyond that beauty is also a standout.

Rick Gomez: And what we're seeing in discretionary is when we offer on-trend stylish product at a great price, the consumer response. And we're seeing that in apparel; apparel delivered a three comp. So real bright spots was all in motion, our performance brand with a team did a fantastic job on fabrication, colors, fit a $25 leggings with a fan favorite and really demonstrated the power of fashion combined with affordability. Beyond that, beauty is also a standout. We where we see news really resonating with the guest. I mentioned in my comments, but it's really exciting to see the success of Blake Lively's new hair care line, Blake Brown.

Rick: What we're seeing in discretionary is.

Rick: When we offer on trend stylish product at a great price the consumer responds and we're seeing that in apparel apparel delivered a three comp some real bright spots was all in motion our performance brand, where the team did a fantastic job on fabrication colors fit 20.

Rick Gomez: And we're seeing that in apparel, apparel delivered a three comp.

Michael: We saw a very strong delivery during the quarter.

Rick Gomez: So real bright spots was all in motion, our performance brand with a team did a fantastic job on fabrication colors fit a $25 leggings with a fan favorite and really demonstrated the power of fashion combined with affordability.

Rick: $25 leggings with a fan favorite and really demonstrated the power of fashion combined with affordability.

Rick Gomez: Beyond that beauty is also a standout.

Rick: Beyond that beauty is also a standout where we see.

Rick Gomez: We where we see news really resonating with the guest.

Ed Kelly: We where we see news really resonating with the guest. I mentioned in my comments, but it's really exciting to see the success of Blake Lively's new hair care line Blake Brown. We just launched it a few weeks ago and it is already the most successful hair care launch that we have ever had a target. And I think it's just another great example of the consumer is willing to buy when they find that right combination of on trend stylish products at an affordable price.

Speaker Change: <unk> really resonating with our guest I mentioned in my comments, but it's really exciting to see the success of Blake lively new hair care line Blake Brown, we just launched it a few weeks ago and it is already the most successful hair care launch that we have ever had a target and I think this is another great example of.

Rick Gomez: I mentioned in my comments, but it's really exciting to see the success of Blake Lively's new hair care line Blake Brown.

Rick Gomez: We just launched it a few weeks ago and it is already the most successful hair care launch that we have ever had a target.

Rick Gomez: We just launched it a few weeks ago, and it is already the most successful hair care launch that we have ever had at Target. And I think it's just another great example of the consumer is willing to buy when they find that right combination of on-trend stylish products at an affordable price. And even in other businesses, I use home as an example. Consumers want to freshen up their home. They want to freshen up their look, but they need to do it on the budget. So where we see growth is things like candles, decorative accessories, throw pillows.

Rick Gomez: And I think it's just another great example of the consumer is willing to buy when they find that right combination of on trend stylish products at an affordable price.

Speaker Change: The consumer is willing to buy when they find that right combination of on trend stylish products I don't know affordable price.

Rick Gomez: And even in other businesses, I use home as an example, consumers want to freshen up their home.

Ed Kelly: And even in other businesses, I use home as an example, consumers want to freshen up their home. They want to freshen up their look, but they need to do it on the budget. So where we see growth is things like candles, decorative accessories, throw pillows. We're seeing growth there because we're offering an inexpensive way to freshen up the look of your home. So again, it goes back to delivering stylish on trend product at a great price.

Speaker Change: And even in other businesses.

Speaker Change: Our used home as an example, consumers want to freshen up their home they want to freshen up their look but they need to do it on the budget, So where we see growth is things like candles decorative accessories throw pillows were.

Rick Gomez: They want to freshen up their look, but they need to do it on the budget. So where we see growth is things like candles, decorative accessories, throw pillows. We're seeing growth there because we're offering an inexpensive way to freshen up the look of your home.

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

Rick Gomez: We're seeing growth there because we're offering an inexpensive way to freshen up the look of your home. So again, it goes back to delivering stylish, on-trend product at a great price.

Speaker Change: We're seeing growth there because we are offering in.

An inexpensive way to freshen up the look of your home. So again, it goes back to delivering stylish and on trend product at a great price.

Rick Gomez: I'll give you one of my favorite examples from earlier this year.

Ed Kelly: I'll give you one of my favorite examples from earlier this year. And it's a collaboration we had with our partners that authentic brand. Leveraging the Prince Brand. And while that brand has been known for tenets around the years, we brought the Prince category and the Prince Brand into Pickleball with great new apparel, accessories and rackets. And we've created a destination and target for all things Pickleball. And we know families across the country are enjoying that sport if it's very nicely with our all family position.

Rick Gomez: I'll give you one of my favorite examples from earlier this year. And it's a collaboration we had with our partners that authentic brand. Leveraging the Prince brand. And while that brand has been known for tenets around the years, we brought the Prince category and the Prince brand into Pickleball with great new apparel, accessories, and rackets. And we've created a destination and target for all things pickleball. And we know families across the country are enjoying that sport if it's very nicely with our all family position. And it's just one more example of when targets target. When we bring great design that's on trend at a great value, we see the guests reacting really positively.

Speaker Change: Give me one of my favorite examples from earlier this year and it's a collaboration we had with our partners that authentic brands.

Rick Gomez: And it's a collaboration we had with our partners that authentic brand.

Rick Gomez: Leveraging the Prince Brand. And while that brand has been known for tenets around the years, we brought the Prince category and the Prince Brand into Pickleball with great new apparel, accessories and rackets.

Speaker Change: Leveraging the Prince brand and that brand has been known for tenants throughout the years.

Speaker Change: We brought the print category and the <unk> brand into Pickle ball with great new apparel accessories, and racket and we've created a destination a target for all things Pickle ball and we know families across the country are enjoying that sport it fits very nicely with our all family position and it's just one more.

Rick Gomez: And we've created a destination and target for all things Pickleball.

Rick Gomez: And we know families across the country are enjoying that sport if it's very nicely with our all family position.

Rick Gomez: And it's just one more example of when targets target.

Ed Kelly: And it's just one more example of when targets target. When we bring great design that's on trend at a great value, we see the guests reacting really positively. So you'll see Rick and the team continue to make sure that we're bringing that combination of design and on trend, great value, great newness into those categories to continue spark greater demand.

Speaker Change: Example of win targets target when we bring great design, that's on trend at a great value. We see the guests reacting really positively so youll see recognize team continue to make sure that we're bringing that combination of design and on trend great value great newness into those categories to continue.

Rick Gomez: When we bring great design that's on trend at a great value, we see the guests reacting really positively.

Brian Cornell: Operator, we have time for one final question today. Thank you.

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

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

Speaker Change: Park greater demand.

Unknown Executive: Operator, we have time for one final question today.

Rick Gomez: Operator, we have time for one final question today. Thank you. Our final question comes from Corey Tarlowe with Jeffries. You may go ahead. Good morning, and thank you so much for taking my questions. I was wondering if you talk a little bit about your expectations for longer-term mix of food and beverage over time. That's a category where you've continued to grow over the last several years, specifically since the pandemic, especially. As you've widened the assortment and the number of items that you've carried in that category. So we'd be really curious to hear your thoughts around the long-term trajectory for that business over time.

Speaker Change: Operator, we have time for one final question today.

Unknown Executive: Thank you.

Michael: How do you feel about the sustainability of the improvement and then, you know, over time getting back to that 6% plus margins on an annual basis?

Corey Tarlowe: Our final question comes from Corey Tarlowe with Jeffries.

Corey Tarlowe: Our final question comes from Corey Tarlowe with Jeffries. You may go ahead. Good morning, and thank you so much for taking my questions. I was wondering if you talk a little bit about your expectations for longer term mix of food and beverage over time. That's a category where you've continued to grow over the last several years specifically since the pandemic especially. As you've widened the assortment and the number of items that you've carried in that category.

Speaker Change: Thank you. Our final question comes from Cory <unk> with Jefferies. You May go ahead.

Corey Tarlowe: You may go ahead.

Corey Tarlowe: Good morning, and thank you so much for taking my questions.

Rupesh Parikh: Good morning.

Michael: Yeah, thanks for the question, Rupesh.

Cory: Good morning, and thank you so much for taking my questions. I was wondering if you could talk a little bit about what your expectations for longer term mix of food and beverage over time, that's a category, where you've continued to grow over the last several years, specifically since the pandemic, especially as you've widened the assortment and the number of <unk>.

Michael: As we laid out at the start of the year, this year was going to be about progress to that better margin performance over time.

Corey Tarlowe: I was wondering if you talk a little bit about your expectations for longer term mix of food and beverage over time.

Michael: And two quarters in, I just can't thank the team enough for their work to put us solidly on the path of the improvement that we laid out for the year.

Corey Tarlowe: That's a category where you've continued to grow over the last several years specifically since the pandemic especially. As you've widened the assortment and the number of items that you've carried in that category.

Speaker Change: Items that you've carried in that category. So would repeat really curious to hear your thoughts around the long term trajectory for that business over time.

Corey Tarlowe: So we'd be really curious to hear your thoughts around the long term trajectory for that business over time.

Corey Tarlowe: So we'd be really curious to hear your thoughts around the long term trajectory for that business over time. Corey, I'm happy to start. I'm going to turn it over to Rick who obviously was leading our food and beverage business. We think we have significant opportunity for growth in that space, led by the unique combination again of great national brand partnerships and some really strong own brands of connected with the consumer. So we think we're still in the early days of building out our food business, but we're keeping that so much experience in the space.

Rupesh Parikh: Thanks for taking my question.

Brian Cornell: Corey, I'm happy to start.

Brian Cornell: Corey, I'm happy to start. I'm going to turn it over to Rick, who obviously was leading our food and beverage business. We think we have significant opportunity for growth in that space, led by the unique combination again of great national brand partnerships and some really strong own brands of connected with the consumer. So we think we're still in the early days of building out our food business, but we're keeping that so much experience in the space. Why don't you share some of your thoughts?

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

Speaker Change: Alright, I'm happy to start and I'm going to turn it over to Rick who obviously it was leading our food and beverage business.

Michael: So to grow the top line at a 2% comp, to see a category like apparel, so we like the margins in apparel, to see that category return to growth helped us from a mixed perspective.

Rick Gomez: I'm going to turn it over to Rick who obviously was leading our food and beverage business.

Rupesh Parikh: Also, congrats on a nice quarter.

Rick Gomez: We think we have significant opportunity for growth in that space, led by the unique combination again of great national brand partnerships and some really strong own brands of connected with the consumer.

Michael: Great work by the team to continue to find efficiency within the business.

Michael: And we expected a more promotional environment this year. We've certainly seen that so far.

Speaker Change: We think we have significant opportunity for growth in that space led by the unique combination again, great natural brand partnerships and some really strong owned brands who have connected with the consumer. So we think we're still in the early days of building out our food business, but Rick you've got so much experience in the space wanted to secure some of your thoughts I'd be happy to offer a little.

Michael: But you can see the strength on the margin line due to the team's really hard work to continue to squeeze efficiencies out of the business in ways big and small.

Michael: And we're pleased with the progress we're making on shrink.

Rick Gomez: So we think we're still in the early days of building out our food business, but we're keeping that so much experience in the space.

Rick Gomez: Why don't you share some of your thoughts?

Corey Tarlowe: Why don't you share some of your thoughts? I'd be happy to offer a little color commentary on the food and beverage business. And as Brian said, we believe there is continued runway for the business to deliver growth driven by a few things. The first is continued emphasis on affordability. As we talked about the 5,000 price reductions across everyday items was incredibly well received. We'll continue to lean into value on our food and beverage business, not just through everyday pricing, but also through personalized promotions on circle as well as with our own brand portfolio which offers incredible value.

Rick Gomez: I'd be happy to offer a little color commentary on the food and beverage business.

Corey Tarlowe: The second thing that we'll continue to lean into drive growth of food and beverage will be newness. Just going into the fall season right now, we have a ton of new products coming over 150 new own brand products, over 500 new national brand products, leveraging those flavors that everybody loves for the fall. I'm talking about pumpkin spice, apple, pecan pie. That will continue to fuel growth. And then the last opportunity to continue to drive growth on our food and beverage business is around even convenience.

Rick Gomez: I'd be happy to offer a little color commentary on the food and beverage business. And as Brian said, we believe there is continued runway for the business to deliver growth driven by a few things. The first is continued emphasis on affordability. As we talked, the 5,000 price reductions across everyday items was incredibly well received. We'll continue to lean into value on our food and beverage business, not just through everyday pricing, but also through personalized promotions on Circle as well as with our own brand portfolio, which offers incredible value. The second thing that we'll continue to lean into drive growth of food and beverage will be newness.

Rick: Color commentary on our food and beverage business and as Brian said, we believe there is continued runway for the business to deliver growth driven by a few things. The first is continued emphasis on affordability.

Michael: Now, there's some noise quarter to quarter about how that will come through.

Rick Gomez: And as Brian said, we believe there is continued runway for the business to deliver growth driven by a few things.

Michael: So I tried to unpack some of those details in my prepared remarks.

Rupesh Parikh: So I just wanted to go back to the operating margin performance during the quarter.

Rupesh Parikh: We saw a very strong delivery during the quarter.

Michael: But the net punch line there is we're ahead of where we expected to be in terms of progress on shrink too.

Michael: How do you feel about the sustainability of the improvement and then, you know, over time getting back to that 6% plus margins on an annual basis?

Rupesh Parikh: Yeah, thanks for the question, Rupesh.

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

Michael: So all of that's adding up to an earnings result we're certainly pleased with.

Rick Gomez: The first is continued emphasis on affordability. As we talked about the 5,000 price reductions across everyday items was incredibly well received.

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

Michael: So to grow the top line at a 2% comp, to see a category like apparel, so we like the margins in apparel, to see, that category return to growth helped us from a mixed perspective.

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

Michael: Now there's some noise quarter to quarter about how that will come through, so I tried to unpack some of those details in my prepared remarks, but the net punch line there is we're ahead of where we expected to be in terms of progress on shrink too, and so all of that's adding up to an earnings result we're certainly pleased with, and our work going forward will be to continue that momentum in Q3 and Q4.

Michael: And our work going forward will be to continue that momentum in Q3 and Q4.

Brian: Rupesh, I just amplify a couple of the comments that you've heard us make over the last few quarters and really recognize the focus the team's placed on retail fundamentals.

Rick: As we talked about the 5000 price reductions across everyday items was incredibly well received we will continue to lean into value on our food and beverage business not just through everyday pricing, but also through personalized promotions on circle as well as with our own brand portfolio, which offers incredible value.

Brian: Michael talked about the progress in reliability, improving our end stocks.

Brian: Rick's talked about the improvement in value and the commitments we've made to making sure we provide value to our guests, no matter where they're shopping and how they're shopping.

Brian: And I think you're seeing the benefits of that payoff.

Michael: Rupesh, I just amplify a couple of the comments that you've heard us make over the last few quarters, and really recognize the focus the team's placed on retail fundamentals.

Brian: And I think that focus on controlling the things we can control is really helping us improve our operating margin performance.

Brian: Michael talked about the progress in reliability, improving our end stocks.

Brian: But the team has been very focused on retail fundamentals, execution each and every day, both from a physical standpoint and a digital standpoint.

Brian: Rick's talked about the improvement in value and the commitments we've made to making sure we provide value to our guests, no matter where they're shopping and how they're shopping, and I think that focus on controlling the things we can control is really helping us improve our operating margin performance, but the team has been very focused on retail fundamentals, execution each and every day, both from a physical standpoint and a digital standpoint, and I think you're seeing the benefits of that pay off.

Rupesh Parikh: Great, thank you.

Rick Gomez: We'll continue to lean into value on our food and beverage business, not just through everyday pricing, but also through personalized promotions on circle as well as with our own brand portfolio which offers incredible value.

Rupesh Parikh: Great, thank you.

Rupesh Parikh: I'll pass it along.

Unknown Executive: Thank you.

Chris Horvers: Our next question is from Chris Horvitz with JP Morgan.

Chris Horvers: Our next question is from Chris Horvers with J.P. Morgan.

Unknown Executive: You may go ahead.

Chris Horvers: You may go ahead.

Chris Horvers: Thanks.

Chris Horvers: Thanks, good morning.

Chris Horvers: Good morning.

Chris Horvers: My first question is, can you talk more specifically about what drove the strength and the merchandise margin strategies in the second quarter?

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

Chris Horvers: Yeah, thanks for the question, Chris.

Michael: There's a lot that goes into that margin line on any quarter, and so the headlines are some we've touched on a little bit already.

Michael: We've definitely seen a more promotional environment, but against that backdrop, the teams have worked hard to find efficiencies within the business, and, you know, that can show up in ways big and small.

Michael: To give a tangible example, you know, one of the things that we've continued to see progress with is the most expensive thing we do in fulfilling product is shipping a brown box, and we've seen significant improvement in the cost per unit of that activity as teams have worked to better align inventory with where we see demand, so we have to split shipments less frequently, and the core productivity within those processes, big improvements in our stores team delivering that product more efficiently as we pick and pack in the stores, and so that work adds up, and the teams have been at it for multiple quarters now, and we're seeing it pay off.

Chris Horvers: Understood.

Rick Gomez: The second thing that we'll continue to lean into drive growth of food and beverage will be newness.

Rick: The second thing that we will continue to lean in to drive growth for food and beverage will be newness.

Chris Horvers: And then on the top line, I was just curious how you forecast the business.

Chris Horvers: Obviously, the consumer has been a lot more volatile, a lot more event-driven.

Rick Gomez: Just going into the fall season right now, we have a ton of new products coming over 150 new own brand products, over 500 new national brand products, leveraging those flavors that everybody loves for the fall. I'm talking about pumpkin spice, apple, pecan pie.

Rick Gomez: Just going into the fall season right now, we have a ton of new products coming: over 150 new own brand products, over 500 new national brand products, leveraging those flavors that everybody loves for the fall. I'm talking about pumpkin spice, apple, pecan pie. That will continue to fuel growth. And then the last opportunity to continue to drive growth on our food and beverage business is around even convenience. Consumers have a lot on their plate, and they're looking for simple solutions. We're very excited about the continued growth that we're seeing on both drive up as well as same day delivery, which is achieving double digit growth in Q2, and we continue to see runway on that going forward.

Chris Horvers: And what are you embedding in the back half in terms of sustainability?

Chris Horvers: There seems, like there was some pause in the back half July.

Rick: Going into the fall season, right now we have a ton of new products coming over 150, new owned brand products over 500, new National brand products, leveraging those flavors that everybody loves for the fall Im talking about pumpkin Spice Apple Pecan pie that will continue to fuel growth and then the last <unk>.

Chris Horvers: As you plan the business, do you look at seasonal revenues, you know, building off the second quarter?

Chris Horvers: Are you looking at SPACs?

Michael: Yeah, thanks for the question, Chris.

Chris Horvers: Are you looking at trends versus 2019?

Michael: Um, there's a lot that goes into that margin line on any quarter.

Chris Horvers: Just some insight there in terms of how you, forecast the business.

Michael: And so the headlines are some we've touched on a little bit already, we've definitely seen a more promotional environment.

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

Michael: But against that backdrop, the teams have worked hard to find efficiencies within the business. And, you know, that can show up in ways big and small.

Chris Horvers: Thanks very much.

Michael: To give a tangible example, you know, one of the things that we continue to see progress with is, you know, the most expensive thing we do in fulfilling product is shipping a brown box. And we've seen significant improvement in the cost per unit of that activity as teams have worked to better align inventory with where we see demand.

Michael: So we have to split shipments less frequently.

Chris Horvers: And then on the top line, I was just curious how you forecast the business.

Michael: And the core productivity within those processes, big improvements in our stores team delivering that product more efficiently, more efficiently as we pick and pack in the stores.

Chris Horvers: Obviously, the consumer has been a lot more volatile, a lot more event driven, there seems like there was some pause in the back half July.

Michael: And so that work adds up.

Chris Horvers: Thanks, Chris.

Chris Horvers: As you plan the business, do you look at seasonal revenues, you know, building off the second quarter?

Michael: And the teams have been at it for multiple quarters now and we're seeing it pay off.

Unknown Executive: Thank you.

Chris Horvers: Are you looking at stacks?

Chris Horvers: Understood.

Simeon Gutman: Our next question is from Simeon, Gutman with Morgan Stanley.

Rick Gomez: That will continue to fuel growth.

Chris Horvers: Are you looking at trends versus 2019?

Unknown Executive: You may go ahead.

Chris Horvers: Just some insight there in terms of how you forecast the business.

Simeon Gutman: Hi, good morning, everyone.

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

Simeon Gutman: I wanted to ask on a near-term question first.

Chris Horvers: Thanks very much.

Simeon Gutman: Sounds like comps June and July were relatively steady.

Chris Horvers: Thanks, Chris.

Simeon Gutman: I don't know if you talked about product for back-to-school.

Chris Horvers: Thank you.

Simeon Gutman: Curious about how the, consumer is behaving.

Rick Gomez: And then the last opportunity to continue to drive growth on our food and beverage business is around even convenience.

Simeon Gutman: Our next question is from Simeon Gutman with Morgan Stanley.

Simeon Gutman: And then connected to it, any expectation when the discretionary comps may inflect a positive?

Simeon Gutman: You may go ahead.

Brian: Simeon, as we sit here today, obviously we're in the heart of back-to-school season, kind of the early chapters of back-to-college.

Simeon Gutman: Hi, good morning, everyone.

Rick: Opportunity to continue to drive growth at our food and beverage business is around ease and convenience.

Brian: And as Rick talked about, excited about the upcoming Halloween season.

Simeon Gutman: I wanted to ask on near term question first.

Brian: I think as we, sit here today, we feel well-prepared for those big seasonal moments.

Simeon Gutman: Sounds like comps June and July were relatively steady.

Brian: And we'll continue to make sure we lean in with a great physical and digital experience.

Simeon Gutman: I don't know if you've talked about product for back to school, curious about how the consumer is behaving, and then connected to it.

Simeon Gutman: Maybe one follow-up.

Simeon Gutman: Any expectation when the discretionary comps may inflect a positive, Simeon, as we sit here today, obviously we're in the heart of back-to-school season, kind of the early chapters of back-to-college, and as Rick talked about, excited about the upcoming Halloween season.

Rick Gomez: Consumers have a lot on their plate and they're looking for simple solutions and we're very excited about the continued growth that we're seeing on both drive up as well as same day delivery which is achieving double digit growth in Q2 and we continue to see runway on that going forward.

Corey Tarlowe: Consumers have a lot on their plate and they're looking for simple solutions and we're very excited about the continued growth that we're seeing on both drive up as well as same day delivery which is achieving double digit growth in Q2 and we continue to see runway on that going forward.

Simeon Gutman: Can I ask about the price investments, the 5,000 items that have been, lowered?

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

Rick: <unk> R.

Simeon Gutman: One, I assume you're pleased with some of the elasticity.

Simeon Gutman: Maybe one follow-up.

Simeon Gutman: Does it make you think about price positioning broadly?

Simeon Gutman: Can I ask about the price investments, the 5,000 items that have been lowered?

Simeon Gutman: Are there opportunities to enhance the price position in other places?

Speaker Change: We have a lot on their plate and they are looking for simple solutions and we're very excited about the continued growth that we're seeing on both drive up as well as same day delivery, which is achieving double digit growth in Q2, and we continue to see runway on that going forward.

Michael: We're really pleased with our Circle 360 same-day delivery business. Both it and Drive Up grew in the low teens and so we've seen some acceleration in that business on the heels of our relaunch of Circle and so we're encouraged by that.

Simeon Gutman: If one, I assume you're pleased with some of the elasticity.

Brian: Simeon, I think when we sit here today, we feel really good about the way the consumers reacted to the price investments we've made on those 5,000 frequently purchased items. But it really goes beyond those investments.

Michael: And importantly, for both of those services, we've talked about this before, but I think it warrants a re-emphasis, the thing we see when people engage with DriveUp and with Circle 360 same-day delivery is they spend meaningfully more at Target in total, and their in-store shopping actually increases after they become users of those services.

Michael: And importantly, for both of those services, we've talked about this before but I think it warrants a re-emphasis, the thing we see when people engage with Drive Up and with Circle 360 same-day delivery is they spend meaningfully more at Target in total and their in-store shopping actually increases after they become users of those services.

Simeon Gutman: Does it make you think about price positioning broadly?

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

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

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

Simeon Gutman: Are there opportunities to enhance the price position in other places?

Brian: If you're using a Target Circle card, you have the opportunity for that 5% discount.

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

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

Simeon Gutman: Simeon, I think we sit here today, we feel really good about the way the consumers reacted to the price investments we've made on those 5,000 frequently purchased items.

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

Michael: And one of the things that that relaunch of Circle provides is it brings the core base Circle program where guests can find incredible value through the personalized offers that they receive every day, with the Circle card program where you can save an extra 5% if you're a Circle card member, with the Circle 360 program if you want the best of Target brought to your doorstep.

Michael: And one of the things that that relaunch of Circle provides is it brings the core base Circle program where guests can find incredible value through the personalized, offers that they receive every day with the Circle card program where you can save an extra 5% if you're a Circle card member, you know, with the Circle 360 program if you want the best of Target brought to your doorstep.

Brian: But it really goes beyond those investments.

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

Michael: And the integration of those programs, we think, provides a good jumping-off point over time to continue to reinvigorate the Circle card business, but that's going to be a journey of quarters and years.

Michael: And you, know, the integration of those programs we think provides a good jumping-off point over time to continue to reinvigorate the Circle card business but that's going to be a journey of quarters and years.

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

Unknown Executive: Operator, we have time for one final question today.

Simeon Gutman: Thank you.

Brian: Robby, just to clarify a couple of points, from a base Circle program standpoint, we did note that while we start with a base of over 100 million members, during the July Circle week, we saw 2 million new members join the program.

Brian: Robbie, just to clarify a couple of points.

Brian: If you're using a Target Circle card, you have the opportunity for that 5% discount.

Unknown Executive: Thank you.

Simeon Gutman: Thank you.

Brian: You talked about DriveUp and Target Circle 360.

Brian: From a base Circle program standpoint, we did note that when we start with a base of over a hundred million members during the July Circle week, we saw two million new members join the program.

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

Corey Tarlowe: Our final question comes from Corey Tarlowe with Jefferies.

Unknown Executive: Thank you.

Brian: DriveUp has been a very sticky service for us and just continues to grow. And during the second quarter, we saw DriveUp grow over 14%, and a nice acceleration in Target Circle 360 same-day delivery of almost 14%. So we see tremendous opportunity to continue to expand our Target Circle 360 program, but I'd really highlight... DriveUp has been a stellar performance for us for many years now, and just continues to grow.

Brian: You talked, about Drive Up and Target Circle 360.

Corey Tarlowe: You may go ahead.

Robert Ohmes: Our next question comes from Robbie, Ohms with Bank of America.

Brian: It was a $2 billion business for us in the second quarter. And I think, Michael, year-to-date, it's almost $4 billion.

Brian: Drive Up has been a very sticky service for us and just continues to grow. And during the second quarter we saw Drive Up grow over 14% and a nice acceleration in Target Circle 360 same-day delivery of almost 14%.

Simeon Gutman: Thank you.

Corey Tarlowe: Good morning and thank you so much for taking my questions.

Rick: And we continue to see runway on that going forward.

Unknown Executive: You may go ahead.

Brian: So it's been a really important service that we know our guests appreciate.

Brian: So we see tremendous opportunity to continue to expand our Target Circle 360 program.

Unknown Executive: Thank you.

Corey Tarlowe: I was wondering if you'd talk a little bit about your expectations for longer term mix of food and beverage over time.

Robert Ohmes: Hey, good morning and outstanding.

Brian: But to Michael's point, we know they're a DriveUp user. They're going to spend time in a Target store. And we really like that combination.

Brian: But I'd really highlight Drive Up has been a stellar performance for us for many years now and just continues to grow. It was a two billion dollar business for us in the second quarter and I think, Michael, year-to-date it's almost four billion dollars.

Unknown Executive: Thank you.

Robert Ohmes: Cool hair.

Robbie Ohmes: Sounds great.

Brian: So it's been a really important service that we know our guests appreciate.

Robbie Ohmes: Our next question comes from Robbie Ohmes with Bank of America.

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

Robert Ohmes: I was hoping maybe from Brian or others, you could talk about a couple of things.

Robbie Ohmes: Thanks, Brian.

Brian: But to Michael's point, we know they're a Drive Up user, they're going to spend time in a Target store and we really like that combination.

Robbie Ohmes: You may go ahead.

Brian: Corey, I'm happy to start.

Unknown Executive: Operator, that concludes our second quarter conference call.

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

Unknown Executive: Operator, that concludes our second quarter conference call. Appreciate everyone joining us, and we look forward to talking again soon.

Robert Ohmes: Target, Circle penetration, it hasn't been going up.

Robbie Ohmes: Thank you.

Robert Ohmes: Sounds great.

Robbie Ohmes: Hey, good morning, and outstanding.

Brian: I'm going to turn it over to Rick, who obviously was leading our food and beverage business.

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

Robert Ohmes: Is that expected to change?

Ed Kelly: Our next question is from Ed Kelly with Wells Fargo.

Robert Ohmes: Thanks, Brian.

Robbie Ohmes: Cool hair.

Brian: We think we have significant opportunity for growth in that space, led by the unique combination, again, of great national brand partnerships and some really strong own brands that have connected with the consumer.

Robert Ohmes: And also, same day delivery is still, I guess, Target Circle 360, as you call it, is still not growing as fast as drive up.

Ed Kelly: You may go ahead.

Robert Ohmes: Thank you.

Robbie Ohmes: I was hoping, you know, maybe from Brian or others, you know, you could talk about a couple things, target circle penetration, it hasn't been going up.

Brian: So we think we're still in the early days of building out our food business.

Robert Ohmes: Is that expected to change?

Ed Kelly: Yeah, hi, good morning.

Ed Kelly: Our next question is from Ed Kelly with Wells Fargo.

Ed Kelly: Good morning.

Robbie Ohmes: You know, the, is that expected to change?

Brian: But, Rick, you've got so much experience in the space.

Unknown Executive: Appreciate everyone joining us and we look forward to talking to you again soon.

Appreciate everyone joining us and we look forward to talking again soon.

Robert Ohmes: And would changing these things potentially be a sales driver?

Ed Kelly: I was hoping that you could provide a little bit more detail on discretionary comps, you know, still negative here.

Unknown Executive: You may go ahead.

Ed Kelly: I was hoping you could provide a little bit more detail, on discretionary comps.

Robbie Ohmes: And also same day delivery is still, I guess, target circle 360, as you call it, is still not growing as fast as drive up.

Rick: Why don't you share some of your thoughts?

Robert Ohmes: And then is there any margin implication from that on the offset?

Ed Kelly: What do you think is happening with market share at this point?

Ed Kelly: Yeah, hi.

Ed Kelly: You know, still negative here.

Robbie Ohmes: Is that expected to change?

Rick: I'd be happy to offer a little color commentary on the food and beverage business.

Brian: Robbie, you've got three or four questions there.

Ed Kelly: And then maybe can you talk a bit about, you know, when you think that category is in total, you know, may reflect positively?

Ed Kelly: What do you think is happening with market share at this point?

Robbie Ohmes: And would changing these things potentially be a sales driver?

Rick: And as Brian said, we believe there is a continued runway for the business to deliver growth driven by a few things.

Michael: I'm gonna let Michael, start and I'll pick it up from there.

Brian: And I'm going to let Rick talk about some of the trends we're seeing in discretionary categories.

Ed Kelly: And then maybe can you talk a bit about, you know, when you think that category is in total, you know, may inflect positively?

Robbie Ohmes: And then is there any margin implication from that on the on the offset?

Rick: The first is continued emphasis on affordability. You know, as we talked about, the 5000 price reductions across everyday items was incredibly well received.

Michael: Yeah, importantly, Robbie, I'll kind of take your second point first.

Brian: He talked about the strength in apparel and some of the subsets within apparel.

Brian: Robbie, you've got three or four questions there.

Speaker Change: Okay.

Brian: But we're also seeing green shoots in other areas. And we certainly think that over time in categories like home led by kitchen, as these purchase cycles become, ones that need to be replaced, you're going to see some strength in those categories.

Michael: I'm going to let Michael start and I'll pick it up from there.

Rick: The second thing that will continue to lean into drive growth of food and beverage will be newness.

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

Michael: Yeah, importantly, Robbie, I'll kind of take your second point first.

Rick: Just going into the fall season right now, we have a ton of new products coming over 150 new own brand products, over 500 new national brand products, leveraging those flavors that everybody loves for the fall. I'm talking about pumpkin spice, apple, pecan pie.

Rick: Sure.

Michael: We're really pleased with our Circle 360 same-day delivery business. Both it and DriveUp grew in the low teens, and so we've seen some acceleration in that business on the heels of our relaunch of Circle, and so we're encouraged by that.

Rick: That will continue to fuel growth.

Rick: I'd be happy to give a little color commentary to the trends and what's driving those trends.

Rick: And then the last opportunity to continue to drive growth on our food and beverage business is around ease and convenience. Consumers are have a lot on their plate and they're looking for simple solutions.

Rick: And what we're seeing in discretionary is when we offer on-trend stylish product at a great price, the consumer responds. And we're seeing that in apparel.

Rick: And we're very excited about the continued growth that we're seeing on both drive up as well as same day delivery, which is achieving double digit growth in Q2.

Rick: Apparel delivered a three comp.

Rick: Some real bright spots was All In Motion, our performance brand, where the team did a fantastic job on fabrication, colors, fit.

Rick: $25 leggings was a fan favorite and really demonstrated the power of fashion combined with affordability.

Rick: Beyond that, beauty is also a standout, where we see news really resonating with the guest.

Rick: I mentioned in my comments, but it's really exciting to see the success of Blake Lively's new haircare line, Blake Brown.

Rick: We just launched it a few weeks ago, and it is already the most successful haircare launch that we have ever had at Target.

Rick: And I think this is another great example of the consumer is willing to buy when they find that right combination of on-trend stylish product at an affordable price.

Rick: And even in other businesses, I use home as an example, consumers want to freshen up their home.

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

Rick: And I'll give you one of my favorite examples from earlier this year.

Rick: And it's a collaboration we had with our partners at Authentic Brands, leveraging the Prince brand.

Rick: And while that brand has been known for tenants throughout the years, We brought the Prince category and the Prince brand into Pickleball with great new apparel, accessories, and rackets.

Rick: And we've created a destination and target for all things Pickleball.

Rick: And we know families across the country are enjoying that sport.

Rick: It fits very nicely with our all-family position.

Rick: And it's just one more example of when Target's Target, when we bring great design that's on trend at a great value, we see the guests reacting really positively.

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

Q2 2024 Target Corp Earnings Call

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