Target Earnings: Like a Slow Moving Train Wreck
Here are my four takeaways from Target's earnings call:
What is the status of the Target Plus Marketplace?
1 - Target Plus Marketplace remains shackled.
One of the only parts of the business with double-digit comps, as well as the key to unlocking more advertising growth, is still an invite-only affair. 6 years on, that is simply not good enough.
What is the author's take on Target's new leadership and succession plan?
2 - New leadership smells like the old leadership.
Words like "enterprise acceleration office" and renaming categories of goods to "fun" sounds like gimmicks and warmed-over process reengineering than consumer excitement. Target CEO steps down... from a slowly sinking ship NEXT FEBRUARY, replaced by a 20 year vet. New thinking to inspire fast action! Key theme of this fast-moving speedboat? Process re-engineering through faster tech!
Why is Target's lack of a Chief Marketing Officer a major issue?
3 - Target still doesn't have a Chief Marketing Officer In a world where marketing beats merchandising, this is an incredibly large gap.
No update on the search. "Merchandising 4 Eva" bumper stickers seen at the Minneapolis HQ, followed by similar stickers like: "Our products market themselves." Not in 2025 will this work. You are still not reading the room.
How did financial analysts react to Target's earnings call?
4 - Financial Analysts Increasingly Aggressive Line of Questioning
It was a little shocking to me to see some of these bold questions. You would think they were for a jilted lover, instead of a calm stock analyst. What they asked / What they mean
Question 1
What they asked: "How does the succession plan improve business trajectory?"
What they mean: "Seems like the same group shuffled again, eh?" Yikes. This was the starting point.
Question 2
What they asked: "Quantify investments in margin and capital to beat your peers?"
What they mean: "Please be more specific." The answer included no actual numbers.
Question 3
What they asked: "How will the new succession plan help with your $15B sales target over 5 years?"
What they mean: "Did I mention be more specific?" Answer just said we just had a sequential improvement on our negative comps!
Question 4
What they asked: "Please be specific about your merchandising and pricing strategies relative to your peers to grow the business?"
What they mean: "Like a pack of wolves, we will not let this same question drop." Answer included the fact that they renamed Hardlines to "Fun".
This feels like a good place to end.
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