Target 2015 Annual Report Download - page 3

Target 2015 Annual Report
our food position and further innovate in our merchandising, for an
experience that best suits our guests.
Target.com & mobile – what’s clear from talking to our guests is
that the easier we make it to shop across all of Target – physical and
digital – the happier they are. We’re focused on offering a rich digital
experience that deepens engagement in stores and online, and we’ll
continue to invest in digital capabilities that enable our guests to
seamlessly experience Target.
Local relevance and flexible formats – we’ve seen positive initial
results in creating locally relevant experiences in focus markets like
Chicago. And, with flexible-format stores making up the bulk of our
new-store openings, we’ll learn even more, as each store and its
assortment is custom-designed for the neighborhood it serves.
Target rewards – we know our guests love a great deal, and
current offerings like Cartwheel and REDcard Rewards offer fantastic
opportunities to save. This year, we’re focused on integrating our
loyalty vehicles as we continue to develop a broader rewards
portfolio for our guests – getting to know their attitudes, preferences
and behaviors more deeply, so we can deliver more personalized
promotions and experiences.
Retail foundations – getting the basics right is essential. When we
fall short on the basics, guests have a hard time getting excited about
any innovations we might envision. So, beneath all our efforts is a
relentless focus on getting the fundamentals right: modernizing our
supply chain, enhancing our technology, taking complexity out of our
systems, elevating the use of data and driving productivity across the
entire business.
The progress Target made as a team and a brand in 2015 is real, and
it’s sustainable. Yet, this is a team that takes nothing for granted and
is working every day to deliver the best experience for our guests.
We know that getting it right for them drives growth for us and strong
returns for our shareholders, and we’re committed to this formula for
value creation as we move confidently into the future.
Brian Cornell, Chairman and CEO
In 2015, Target drove profitable growth throughout the year with a
strategic framework that we are confident will keep our company
growing for years to come.
Central to our strategy – really, to everything we do – is a clear
understanding of what our guests expect. Listening to our guests
and investing the time and resources to get to know them better has
already helped us achieve:
• Positive traffic growth in each quarter of 2015, building on traffic
momentum from the end of 2014.
• Sales results on the high end of our comparable store sales
guidance for the year, driven primarily by our signature
businesses, which grew about three times faster than our
overall comp.
• Digital sales growth of more than 30 percent, which continued
to set the pace for U.S. retail.
• Full-year adjusted earnings per share of $4.69*, above our initial
guidance of $4.45 to $4.65, and 11 percent higher than in 2014.
Our team drove these results while also undertaking several key
strategic shifts. Some were challenging, like discontinuing our
Canadian operations and restructuring our U.S. headquarters. Some
were groundbreaking, like announcing our $1.9-billion transaction
with CVS Health. This partnership will deliver ongoing value by
growing traffic in our store pharmacies. Importantly, the transaction
also provided more than $1 billion of net cash to support our capital
deployment priorities, including the return of nearly $5 billion to
shareholders through dividends and share repurchase, well above
the goal we set at the beginning of 2015.
Above all, our team rallied around a set of key enterprise priorities
focused on the things that matter most to our guests. In the course
of the year, I visited with hundreds of guests in our stores and in their
homes. They shared with me the reasons they love Target, and the
times we’ve let them down. Those conversations, and the firsthand
input our team receives from our guests across all touchpoints, have
defined our priorities for the year.
Signature businesses – the categories for which our guests
turn to Target and in which they expect us to lead – namely Style,
Baby, Kids and Wellness. We’ll continue to invest in innovation and
inspiration, knowing that signature businesses play a unique role in
our results, driving the strongest growth in our portfolio. This year,
we will continue to focus on category roles, redefine and improve
A Growth Story Again
*A reconciliation of adjusted EPS from continuing operations to GAAP EPS from continuing operations is provided on page 23 of our Form 10-K.