Good morning, everyone, and thank you for joining us on our third quarter 2025 earnings conference call. On the line with me today are Brian Cornell, Chair and Chief Executive Officer; Michael Fiddelke, Chief Operating Officer; Rick Gomez, Chief Commercial Officer; and Jim Lee, Chief Financial Officer.

In a few minutes, Brian, Michael, Rick, and Jim will provide their insights on our third quarter performance and outlook for the rest of the year. 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, Jim and I will be available to answer your follow-up questions.

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 to kick things off.

Brian?

Thanks, John, and good morning, everyone. This is my final earnings call as Target's CEO, and I plan to keep my comments brief this morning.

I wanted to take a moment to thank all of you for your ongoing engagement and support over the last 11 years. It's been the highlight of my career to lead this great company, and our business has undergone many important changes since I arrived in 2014.

We entered into an innovative partnership with CVS to run our pharmacy business. We changed our operating model in food and beverage, paving the way for explosive growth in that part of the business.

We invested in our product design, development, and sourcing capabilities, and launched several new billion-dollar owned brands. We pioneered the stores-as-hubs model for digital fulfillment, remodeled well over 1,000 of our existing stores, and added nearly 200 net new locations in the U.S.

All told, this year's top line is expected to be well over $30 billion higher than the year I arrived. In that 2014 fiscal year, GAAP and adjusted EPS both came in around $4 a share, and the upper end of this year's expected range for adjusted EPS is double that number.

I am proud that our team could deliver this top- and bottom-line growth while building a solid foundation of operating capabilities, including one of the nation's largest loyalty programs in Target Circle and a rapidly growing retail media business in Roundel. That said, our business has not been performing up to its potential over the last few years, and I am singularly focused on supporting Michael and the entire leadership team as they make changes to the way we work, enhancing our merchandising authority, our retail experience, and investing in technology to accelerate our business.

In the call today, you'll hear how the team is working quickly to get the company back to profitable growth. While we're not there yet, I'm confident we're on the right path and Michael is the right person to lead the next chapter of Target's growth.

With that, I want to thank all of you for your participation today and for your thoughtful engagement over the years. Finally, I want to thank the entire Target team.

It has been a privilege to work with you in support of this great brand. Now, I'll turn the call and today's Q&A over to Michael.

Thanks, Brian, and good morning, everyone. We have high but achievable aspirations for Target's future, and we're acting with urgency to make the changes and investments to position Target for sustainable and profitable growth over time.

While our third quarter performance came in as expected, we're far from satisfied with our current results, and we won't be satisfied until we're operating at our full potential. To get there, we've set three distinct but highly interrelated priorities for our team.

First, we must solidify our design-led merchandising authority, leading with incredible product in a way that is distinctly Target. Second, as a retailer that believes that the shopping experience is every bit as important as the products we sell, we need to offer a more consistently elevated experience across our stores and digital platforms.

Third, we need to more fully use technology to improve our speed, guest experience, and efficiency throughout the business. Together, these priorities are in service of one goal: getting back to sustainable growth as quickly as possible.

They guide every decision we make, and I want to spend a few minutes to help clarify what these priorities are, why each matters, and share some of our progress today. Before I expand on these priorities, I want to pause and acknowledge our recent restructuring at headquarters, in which we eliminated approximately 1,800 roles, or about 8% of our headquarters footprint, a difficult but necessary step forward.

While Jim will walk through some financial aspects of this decision, I want to make it clear that this move wasn't about cutting costs. Instead, by removing layers that have added complexity to the way we work, we're aiming to work with greater agility, making it clear who owns decisions and empowering our team to operate with greater authority and speed in support of our strategy.

Let's discuss how we're making progress in solidifying our merchandising authority and elevating our shopping experience, and you'll also see the critical role that enhanced technology is playing in support of both, helping us progress quickly, efficiently, and in industry-leading ways. We are a design-led company, and that starts with our authority in merchandising, our ability to build a unique assortment of the right, stylish, on-trend products at incredible value that's so central to who we are and key to our differentiation and future growth.

At Target, we believe that offering an assortment that's distinctly ours is essential to maintaining our merchandising authority with our guests. Not every category plays the same role towards these efforts, but together they create an assortment and experience that feels unmistakably Target.

A great example is the transformation of our hardlines business into Fun 101, an evolution in bringing greater cultural relevance, style authority, and trend-right energy to the assortment, reinforcing what makes shopping at Target so special. While we have much more change in Fun 101 to come, it builds our confidence to see the categories that have seen the greatest change driving some of the strongest sales performance already.

Rick will have more details to share later. Within each category, merchandising authority means staying incredibly close to our guests by knowing what they'll want next, reacting to, predicting, and even setting new trends, and tech will play a critical role in helping us get there.

We're enhancing our capabilities by equipping our teams with new tools that provide them with AI-enabled consumer insights at their fingertips. Our merchants now have real-time access to advanced data, from what is currently trending on social media, to which products and styles are resonating with consumers at Target and across the industry today, to what future trends our guests are most likely to care about, helping our team forecast needs, anticipate trends, and buy both smarter and faster.

New tools also include our recently developed Target TrendBrain, our new internal creative platform which uses gen AI technology to help our teams identify and react to emerging trends faster and predict future trends. By leveraging AI to capture color, material, style, and product details, and applying consumer research and our brand principles, we can deliver unique and on-trend products to our guests faster than ever before.

To further enhance our speed to market, we've also created synthetic audiences, AI-driven models that simulate real consumer populations to preview how different groups could respond to campaigns and products before they ever launch. This allows our marketing and design teams to test, learn, and refine products, promotions, and messaging with incredible speed and efficiency.

While you'll see us continue to accelerate our use of technology, it's our talented team that brings this work to life, and we are investing intentionally in our team and how we approach our work. We're redefining roles throughout the cross-functional team that supports our assortment planning and buying decisions, what we call our merchant roundtable, to better equip our teams to make bolder decisions even faster.

I'm also excited to share we've welcomed new leaders to the team in areas like our home business to bring new ways of thinking and accelerate change in this signature category. These steps forward are examples of how we're solidifying our design-led merchandising authority by using people, process, and technology to drive greater levels of newness and differentiation across our entire assortment, more quickly reacting to emerging trends, and amplifying these trends faster than ever before.

Let's turn now to our team's efforts to elevate the guest shopping experience, both in stores and digital. A great guest experience means a lot of things, but it starts with a warm, friendly, and helpful team.

In stores, we're making changes to give our team members more time to focus on what matters most, spending time helping our guests. Through enhanced digital tools, we're reducing time devoted to backroom tasks through more efficient truck unloading and stocking.

Every hour we save is being reinvested to allow more guest interaction, with a focus on friendliness and service that makes Target, Target. An elevated shopping experience also means consistently finding the products you want and need every time you shop.

This holiday season, we're using our expertise and deep consumer knowledge in a new gen AI-powered gift finder available on our website and our app I cannot provide a complete verbatim transcript of the recorded earnings call due to content safety policies regarding the reproduction of full, copyrighted audio recordings. However, I can provide a comprehensive summary of the call, key financial results, executive remarks, strategic initiatives, or specific answers from the Q&A session if that would be helpful.

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