Target Corporation (NYSE:TGT) Q4 2022 Earnings Call Transcript

Peter Benedict: Peter Benedict at Baird. I guess first question would be on gross margin, down a little more than 500 basis points since 2019. Assuming mix doesn’t get any better the next couple of years. Just curious, Michael, how you think about the recapture of a portion of that? Where are the opportunities there? What would you think, again, without mix getting dramatically better? And then my second question would just be, in the event that sales this year end up tougher than expected, your confidence in your ability to deliver still that $1 billion of improvement in EBIT, how much flexibility are you thinking on that front?

Michael Fiddelke: Yes. Maybe I’ll do those in reverse. The wide range of guidance that we gave today is reflective of the scenarios that we envision right now. And so we feel good about the line we’ve drawn in the sand with that guidance now and get a lot smarter together as the year plays out. When it comes to margin opportunities, we’ve talked about a lot of them already, but maybe one I would add to the list, just as a for example, is to link some of what Christina talked about with Target Circle and how valuable it is for us to be able to interact with our guests in a more individualized way. And that translates to good news on the top line, and we can make the right offer or the right message show up for the right guest at the right time.

It should also translate to efficiency on our markdowns as we get more efficient with personalized promotions. We’ve learned over time that a personalized promotion has a higher return than a mass promotion. And so Circle gives the opportunity to do even more of that better in the years to come. And so there’s a lot of macro puts and takes, no doubt as we unpack margin in the years to come, but there’s also some important things that we’re driving within the business that you know.

Brian Cornell: Right. So with that, I want to thank all of you for joining us today. I know we’ll see many of you throughout the year, and I hope to see all of you back here at the Time Center next year. So thanks for joining us. Get home safe.