Target Corporation (TGT)’s Earnings Conference Call Transcript

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We will continue to make sure we’re building out our online business but providing our guests with a great in-store experience.  That’s all about making sure we can continue to increase traffic growth in our store and accelerate the clicks online.  So, we’re very focused on that.  We think our prioritization or signature categories like apparel, home, baby and kids will allow us to continue to unlock growth as we meet the needs of our guests. We’re very excited about the work that we’ve started from a localization and a personalization standpoint.  We’ll spend a lot more time in March talking about the progress and our plans there.  We’re going to continue to accelerate the expansion of City Target.  We’ve announced plans to move into Boston and to Brooklyn in 2015 and we’ll continue to test and expand our Target Express format.

So, we think we have plans in place that will allow us to continue to accelerate growth and improve our performance in the US and we’re also very focused on making sure that form a cost management standpoint, we continue to look for areas of opportunity so that we can find the fuel to invest in growing our topline and increasing traffic to our stores and/or site. I’m very bullish about the future prospects for our business in the US but we also recognize we’ve got a lot work in front of us for the next two to three years and this difficult decision in Canada, Scott, allows us to focus all of our energy on strengthening and executing our plans in the US.

Scott Mushkin

That’s perfect.  If I could maybe just follow up and then I’ll yield.  Any thoughts on the food category, we’re not talking about that and we think that’s really important in the traffic.  Could you come from that side, Brian?  I mean, anyone give any previews?  Should we think about hearing more about what you’re going to do with food as we get to the Analyst Day?

Brian Cornell, Chairman and Chief Executive Officer

Scott, we also think it is a very important category, an important traffic driver for us.  We’re spending a lot of time right now reshaping our strategy for the food category. We’ll talk about that in March and really looking at ways to further differentiate our offering in the food category and meet the needs of our Target guests as they shop our entire box, but as they shop our food categories. So, more to come in March, but we agree it’s a very important category and it clearly is very important to driving traffic and it’s important to our guests.  So, in March, we’ll talk about the next steps to make sure that we do get our food category on track and leverage growth and traffic from the food categories.

Scott Mushkin

Perfect. Thanks.  I appreciate your time.

Brian Cornell, Chairman and Chief Executive Officer

Thanks, Scott.  Appreciate it.

Operator

Your next question comes from the line of Wayne Hood.

 

Wayne Hood

Yes, good morning.  I just wanted to ask, you know, you talked about continuing to modernize Target over the next couple of years and John has talked about, Brian prior to you being there, the US CapEx would approximate $2.3 billion.  I’m wondering as you think about modernization and what you need, does that change the $2.3 billion or is it pretty steady state as you mix out the CapEx number?

 

Brian Cornell, Chairman and Chief Executive Officer

Wayne, I would think about cap backs in a steady state fashion going forward.  We think we have the appropriate amount of capital in our plans to modernize our proposition to continue to build out our online capabilities, to build the capabilities we need for personalization and localization, and to evolve and build those signature categories.  So, I think John and I would tell you, steady state as you think about cap backs and we’re going to make sure that as we go forward, we’re directing the cap backs to build the capabilities and resources that drive growth but also deliver the best return on that invested capital. 

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