Target Corporation (TGT) Q3 2023 Earnings Call Transcript

For the period ending September 30, 2023

November 15, 2023 8:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Target Corporation Third Quarter Earnings Release Conference Call. [Operator Instructions] As a reminder, this conference is being recorded Wednesday, November 15, 2023.

I would now like to turn the conference over to Mr. John Hulbert, Vice President Investor Relations. Please go ahead sir.

John Hulbert

Good morning, everyone and thank you for joining us on our third quarter 2023 earnings conference call. On the line with me today are Brian Cornell, Chair and Chief Executive Officer; Christina Hennington, Chief Growth Officer; John Mulligan, Chief Operating Officer; and Michael Fiddelke, Chief Financial Officer. In a few moments Brian, Christina, John and Michael will provide their insights on our third quarter performance along with our outlook and priorities for the fourth quarter. 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 are 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 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. 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.

With that I'll turn it over to Brian for his thoughts on the third quarter and his priorities for the remainder of the year. Brian?

Brian Cornell

Thanks, John. For many years now we have focused on building a durable business model that allows us to meet guests where they are developing and enhancing the right tools and capabilities while investing heavily in our team, all in the service of providing an affordable, easy and joyful guest experience. And the flexibility of our multi-category model has served us incredibly well over the last few years, delivering unprecedented growth in both traffic and sales.

Today, our business generates well over $100 billion in annual revenue and is successfully navigating through a very challenging environment, as consumers continue to rebalance their spending between goods and experiences and make tough choices in the face of persistent inflation. Even as our P&L is being impacted by multiple top line and bottom line challenges including soft industry trends in discretionary categories, moderating inflation rates in Essentials and Food and Beverage and higher inventory shrink. We've seen a meaningful improvement in profitability compared with last year. More specifically, our EPS through the first three quarters of 2023 was more than 40% higher than last year and more than 26% higher than in 2019.