Target Corp

Strong Q1 momentum, but still “early” vs long-term goals - Net sales: +6.7% YoY; comp sales +5.6% - Traffic: +4.4% (more than offset -2.4% a year ago), indicating demand/visit strength - 2-year comps: +3.7% vs Q1 2024-to-2026 benchmark, but below the level Target wants long-term (management stressed they’re *not yet* at the desired 2-year growth pace) - Category signal: Fun101, beauty, and food & beverage showing mid-single-digit 2-year compound growth, while home and apparel remained below prior-year levels

Merchandising strategy is the core driver (with clear “focus areas”) - Target is prioritizing a set of “bold, distinctive and affordable” assortments that management says are ~half of sales and expected to drive ~3/4 of growth going forward - Examples of early traction (“proof points”): - Baby & Kids: >5 percentage point acceleration in baby comp trends in the back half of Q1 after new offerings; includes test of a baby Concierge in select stores - Health & wellness: ~1,500 new items, plans to refresh ~40% of assortment in 2026; double-digit sales growth and ~2x comp acceleration vs Q4 - Food: 3,000 new food items in Q1 with >50% sales growth vs prior assortment; “Food Forward” aims to make food a reason to choose Target - Culture-driven exclusives: partnerships (e.g., Parke, Roller Rabbit, Pokemon) exceeded expectations on engagement and launch-week sales

Operational progress, but product findability/in-stock remain the key friction - Many store experience metrics hit 3-year highs (including improvements in NPS and satisfaction around wait times, cleanliness, and team interactions) - Biggest issues to fix: product findability and in-stock availability, especially in food and at evenings/weekends - Q1 inventory availability improved, including meaningful YoY improvement in top item availability - Investments/actions: - Labor/workload rebalancing (payroll + training) to free time for guests - Fulfillment simplification to support growing digital demand - Tech/tools upgrades (e.g., myDevice, performance dashboards) - Continued expansion of physical capacity and upstream logistics capabilities