00:00Retail earnings ramping up with Target today. The retail are rising after posting its best comparable sales growth in four
00:06years.
00:07Jen Bartaschus of Bloomberg Intelligence joins us now for more. Jen, welcome to the program.
00:11We can talk about the backdrop, the consumer squeeze, the environment, Walmart on the horizon.
00:15Can we just spend some time on the turnaround at Target and execution? What do you think they're doing right
00:20at the moment?
00:22Well, it really comes from a lot of investment that they've made in supply chain and efficiencies.
00:26And so when you think about it, although that's kind of the back end of the business, what it translates
00:32into is having the right things in the stores at the right times with shelves full.
00:37And that makes it easier for them to then run promotions and advertise and bring people back into the stores.
00:43And so I think a lot of the tactics that they've employed are turning out to drive some traffic growth,
00:49drive that improved result.
00:50But it's really stemming from those organizational and procedural changes that they're making at the heart of the organization.
00:57What else do they need to do to catch up with competitors like Walmart?
01:02Well, you know, I think one of the things that happened with Target is, you know, they need to stay
01:07true to who Target is.
01:08And so I think it's a dangerous path to try to chase Walmart and best Walmart at what Walmart does
01:16well.
01:17Instead, I think Target needs to get back to that sense of what is it that consumers really love about
01:22Target or Target, as people used to be excited about, and focus on those areas and building their brand with
01:29the people that care about those products.
01:32And that's the direction that we see the management team taking, which is pretty encouraging.
01:36I love that you say that, because that's what me and my cousins used to call it growing up.
01:39They had a fun makeup section and all this exciting stuff in the health wellness space.
01:43We used to call it Target.
01:44Is that what they're leaning into right now?
01:46Is that where they're seeing sales increase?
01:49Well, a lot of their sales are coming from household essentials and from food, which is really not surprising, considering
01:56that people have sort of retreated to those essentials.
01:59But areas that have sparked some growth lately, they've always been strong in beauty.
02:05Apparel sales are improving.
02:07Hard lines, which is some of the home decor type of items, those sales are improving.
02:13And those are the things that are at the core of Target Essence.
02:16And so we're seeing that slowly turn.
02:20And again, that's helping support the results that we saw today.
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