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Target shares sinking today. The company reporting first quarter earnings and cutting its sales outlook due to tariff uncertainty. For more in the state of the company, let's bring in Michael Laser, US hardline, broadline and food retail analyst at UBS. Michael, thank you so much for joining us. I actually want to start at the top of Target because today we also learned that the chief operating officer, Michael Fideki, is going to lead a new group at Target. They're calling it the multi-year accelerated acceleration office, which is focused on target moving faster on some of its growth priorities, just basically trying to break the cycle that it's been in. But is this also a signal that maybe things need to change at the very top of the company? Is this a signal about Brian Cornell at all? How should we be reading this?

Well, you should be reading this is indeed there should be change throughout the organization. Clearly in the first quarter, Target lost share. It lost share to a host of retailers. And the encouraging news is that it's saying this is not acceptable. And the reason why it needs this acceleration office is because retail is changing faster today than it ever has in the past. Target most likely got complacent for a period of time. It was working, it was doing well, and it was holding its own. Now, it is falling behind. So it is doing things like seeing if it can implement new technology projects faster than it originally expected, changing some of the assortment quicker than what it once did. We think that ultimately this will usher in change, which will be good for Target, and improve Target's positioning in the market, which will be good for the stock.

So if I put you in charge, Michael, you're CEO of Target now, what specific moves would you make?

I'd do two things, Josh. Number one, Target needs to double down on some of what made Target unique in the past. For example, the limited time offers in partnership with key brands like Kate Spade, Champion, others that it's done in the past. That is what consumers go to Target for. Launching new private label brands like Good and Gather, it needs to keep delighting and surprising the consumer. Second, Target also needs to do a better job of execution. What that means is having the stores stocked well, engaging in good customer service, ensuring that end-to-end experiences for the consumer are really positive. The switching costs for retail today are incredibly low. All you have to do is open a new browser, turn on a new app, go to a new store. So it's really hard for a retailer to maintain loyalty. What will enable Target to do better is stick to what it is, which is a surprise and delight retailer, and do a better job of executing with the core foundational experience for the consumer.

So I guess then the question becomes, Michael, can specifically CEO Brian Cornell do that? Do you think that, you know, after his tenure at the retailer, he's done it in the past. Is he the right guy to do the to execute on those items that you mentioned?

I think you answered the question in that Brian's got history of making change. And, you know, time will tell the degree to which he's well positioned to make change here. I think Target will get back to the Target that it has been of old. It's just going to take some time. Now what what is important here is that this has been a wake-up call for Target that it cannot sit still. The status quo cannot prevail. It is not acceptable what Target's been achieving in the last couple of years. And so time will tell if the right team is in place to be able to effectuate change. I I I believe that this current team can generate improved performance and be able to fulfill the potential that Target offers in the market.

Michael, great to see you. Always appreciate your time and your analysis. Thank you, sir.

Good to see you as well. Thanks.

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