Target 2Q17 Earnings Call Notes

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Brian Cornell – Chairman and Chief Executive Officer

Pace of change doesn’t appear to be slowing

“During this period of rapid transformation in retail in which many others are shrinking, we will continue to look for ways to partner and deliver incremental growth for high quality brands while delivering differentiation and value for our guests. As we look ahead, we are committed to continued progress against our long-term goals. And we expect the environment will continue to be challenging. The pace of change in the consumer and competitive environment doesn’t show any signs of slowing down. And we are well positioned to emerge as one of the winners in retail”

Mark Tritton

Strong growth in hardlines

“In hardlines, comparable sales grew between 3% and 4% in the second quarter, the strongest performance we have seen in 10 years. Growth in this area was broad-based including double-digit growth in both videogames driven by Nintendo switch and Apple within electronics. Toys grew more than 3% with board games continuing to be a strong highlight. ”

Apple strength across the board

“I think firstly just on the Apple comments, they weren’t just driven by tablet, they are driven across the board in categories. And we had really strong showing in Q2 on the iWatch which we worked with Apple on clearly. And we have a lot in our plans for Q3 and Q4 with potential new launches as I have outlined. So we think there is still room for growth and continuing the trend. In terms of Nintendo Switch, we worked really closely with those guys as well to develop not only a product but a marketing campaign that the guests really responded to. ”

Cathy Smith

Better than expected performance

“In the second quarter our traffic sales and financial performance were all better than expected. Notably, the upside to our expectations was broad based across the country, across channels and in all three months of the quarter. Second quarter comparable sales increased 1.3% driven by a traffic increase of 2.1%. “