Target 2007 Annual Report Download - page 10

8
To Our Shareholders:
Our financial performance in 2007 fell short of our expectations as
the pace of sales and earnings growth in the first six months slowed
considerably in the second half of the year. Overall, revenues in
2007 grew 6.5 percent to $63.4 billion and diluted earnings per
share increased 3.9 percent to $3.33.
As we faced the challenges posed by an increasingly difficult
economy, we remained focused on disciplined execution of the
core elements of our business and continued to invest thoughtfully
in our growth. Specifically,
• We opened 118 new stores, including 33 SuperTarget stores, to
offer more guests a uniquely relevant Target shopping experience
in convenient, attractive, easy-to-shop stores;
• We continued to invest in technology and infrastructure, including
implementation of enhanced guest-service systems and
construction of new perishable-food and general merchandise
distribution centers and our second Target.com fulfillment center;
• We positioned Target Sourcing Services as global sourcing
experts to deliver the consistently trend-forward, high-quality,
affordable merchandise that symbolizes the Target brand, and
we continued our disciplined commitment to the safety of our
guests by expanding our multistage testing process to enable
earlier testing of our owned-brand products, such as luggage,
toys and children’s products;
• We offered a broad array of products to meet our guests’ wants
and needs, including limited-time-only fashion from emerging
designers, an upgraded assortment of digital electronics, a
growing selection in food and pharmacy and a variety of
sustainable products across many categories, including certified
organic bedding and natural cleaning products;
• And, we strengthened our one-of-a-kind brand by continuing
to offer a compelling online presence through Target.com, by
offering the many benefits of REDcards which continue their
outstanding record of profitability, and by creating a succession
of uniquely innovative marketing campaigns.
While we were disappointed in our 2007 results, we remain
confident in the relevance of our strategy, the strength of our brand,
the dedication of our talented team and in our ability to continue
to deliver strong profitable growth over time. We believe we are
well-positioned for more rapid growth in 2008 and beyond.
This belief is founded in our Expect More. Pay Less. promise
to our guests, which is a guiding principle behind every decision
we make as a company. It is the expression of our commitment
to exceptional quality, accessible design at a superior value, and
doing business in a way that goes far beyond the products we sell.
Each element of our strategy is thoughtfully conceived, and every
decision we make reinforces the uniquely Target experience that
is our competitive advantage.
As we look ahead, we will remain focused on the fundamentals
of our business while continuing to pursue innovative solutions and
establish new best practices throughout the company. Specifically,
in 2008, we are diligently working to drive top-line growth and
thoughtfully manage our expenses. By prioritizing our investments
and focusing our resources on areas that increase speed and
efficiency, and reduce work and cost, while preserving our brand
and overall shopping experience for our guests, we will rise above
the current economic challenges.
We will also remain committed to providing a workplace that is
preferred by our team members and investing in the communities
where we do business to improve the quality of life. Our long history
of giving is reflected in the ways we serve our communities, including
team member volunteerism and giving more than three million
dollars a week in charitable contributions to education, the arts
and social services.
Target also has a long history of strong corporate governance,
and this disciplined stewardship and commitment to strategic
continuity is evident as Target transitions to new leadership in 2008.
Gregg Steinhafel’s tremendous experience, combined with his
passion and unwavering devotion to the Target brand, make him an
outstanding choice to be our next chief executive officer.
The strength of this company’s reputation and performance is
attributable to Target brand managers throughout the world whose
talent and dedication consistently bring our Expect More. Pay Less.
brand promise to life for our guests and sustain our unique
competitive advantage. By maintaining a steadfast commitment
to delight our guests in every store, every day, Target will continue
to grow and prosper for many years to come!
Sincerely,
Bob Ulrich, Chairman and Chief Executive Officer