Brian Cornell: Well, Michael, thank you, and Mike, thanks for joining us today. I know everyone would like to get into the work, but I think it would be really helpful to just pause for a second and talk about your background and why we selected you to lead this very important initiative.
Michael O’Neil: Yes. Thanks, Brian. Really happy to be here and excited about the opportunity to lead this work for Target. I’ve been at Target now for 15-plus years, started in finance, worked in various roles with our merchandising operation partners to help deliver on their strategic priorities and their financial growth. Through that experience, I got to see the business model through the lens of the P&L. A couple of years ago, I went over then to human resources and led our paying benefits and strategic workforce planning teams. And that was a great opportunity to see the business on the lens of our team members. I had a chance to lead that team during the early days of the pandemic and saw quickly the work our team does to take — the importance of taking care of them to take care of our guests.
From there, I’ve been back now in finance for a couple of years and I was leading the financial planning and analysis teams where we work with every business function to deliver on both our finance and strategic priorities. And coming back to finance and seeing the growth we’ve seen over the last couple of years, it was pretty apparent to me the opportunity to step back and think about how do we run this business model now at the larger scale. And so I think with those experiences, plus relationships I built over these 15 years, I think, position me well to lead this work forward.
Michael Fiddelke: Mike, when you took on this role, we spent a lot of time talking about what this works about and what it isn’t. Can you share a bit about the reasons we’ve initiated the work and what we’re looking to accomplish?
Michael O’Neil: Yes. I think I’ll start maybe with what it isn’t. This isn’t about sacrificing long-term growth for short-term profits. A typical tactic here is to look to shrink your cost base in the face of declining revenues. Well, that’s not Target, right? We are growing, continue to grow. In fact, this work has come out from the growth we’ve seen over the last 3 years. We’ve grown $30 billion — over $30 billion since 2019. That’s more than 14 years prior. And that creates a tremendous opportunity to step back and reimagine how do we operate this business at a larger scale, but more importantly, how do we position Target for future growth. And so as we’re looking for efficiencies, we’ll look for ways to simplify the work, to streamline processes, to reduce redundancy, all with the mind of how do we make it easier for our team members to deliver a great guest experience.
In doing so, our initial scoping says, we’ll deliver $2 billion to $3 billion of cost savings over the next 3 years.
Michael Fiddelke: Mike, I want to clarify one thing briefly. After Brian and I mentioned this effort in our last earnings call, we got some questions about whether that $2 billion to $3 billion number includes the natural recovery from the headwinds we experienced in 2022. Can you help clarify that?
Michael O’Neil: Sure. I’ve got a couple of those questions as well. And I would say, I reiterate that this is not about the workover — or what’s happened to us over the last 12 months, it’s about the growth that we’ve seen over the last 3 years. And so no, what’s not included is anything that will come the natural recover from the headwinds of last year. This work is the designed to deliver fuel beyond that, both to deliver on our — both our top line and our bottom line goals.
