×

CNBC Exclusive: CNBC Transcript: Target CEO Brian Cornell Speaks with CNBC’s Courtney Reagan on “Fast Money Halftime Report” Today

WHEN: Today, Wednesday, November 18th

WHERE: CNBC's "Fast Money Halftime Report"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Target CEO Brian Cornell and CNBC's Courtney Reagan on CNBC's "Fast Money Halftime Report" (M-F, 12PM-1PM ET) live from Target's headquarters in Minneapolis today. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000455673 and http://video.cnbc.com/gallery/?video=3000456073.

All references must be sourced to CNBC.

SCOTT WAPNER: WE ARE BACK. SHARES OF TARGET ARE SLUMPING TODAY AFTER QUARTERLY RESULTS CAME OUT EARLIER. THE RETAILER JUST THE LATEST IN A STRING OF DISAPPOINTING EARNINGS THAT HIT THE SECTOR PRETTY HARD. CNBC'S COURTNEY REAGAN LIVE IN MINNEAPOLIS WITH TARGET'S CEO BRIAN CORNELL AS A CNBC EXCLUSIVE INTERVIEW. COURTNEY, TAKE IT AWAY.

COURTNEY REAGAN: THANK YOU VERY MUCH, SCOTT. I AM JOINED BY BRIAN CORNELL HERE IN A TARGET STORE NOT FAR FROM YOUR HEADQUARTERS IN MINNEAPOLIS. YOU REPORTED EARNINGS THIS MORNING. WE GOT A LOT OF THE NUMBERS. NOW WE WANT TO LOOK AHEAD TO THE HOLIDAY SEASON. YOU KNOW, VERY STRONG FOURTH QUARTER LAST YEAR. CAN YOU TOP IT THIS YEAR?

BRIAN CORNELL: WE FEEL REALLY GOOD ABOUT OUR PLANS FOR THE HOLIDAYS. NOW, I THINK IT BUILDS OFF THE MOMENTUM WE'VE SEEN THROUGHOUT THE YEAR. WE HAD GREAT TRAFFIC GROWTH AGAIN IN THE THIRD QUARTER. WE EXPECT THAT TO CONTINUE IN THE FOURTH QUARTER. WE'VE SPENT A LOT OF TIME MAKING SURE WE'VE HAD GREAT PLANS IN PLACE WHERE ARE I THINK WE HAVE A SENSATIONAL MARKETING PROGRAM. WE'RE CLEARLY ELEVATING THE IN STORE EXPERIENCE. YOU ARE SEEING SOME OF THAT AS YOU WALK AROUND THE STORE HERE TODAY AND YOU NOTICE THAT, AND WE FEEL VERY GOOD ABOUT OUR BLACK FRIDAY DEALS, OUR TEN DAYS OF DEALS, AND THE COMBINATION OF WHAT WE'RE GOING TO OFFER IN STORE AND ON-LINE. WE FEEL REALLY GOOD ABOUT OUR PLANS FOR THE HOLIDAYS.

REAGAN: AND YOU'RE STARTING SOME OF THESE DEALS BEFORE BLACK FRIDAY, YOUR TEN DAYS OF DEALS. IS THERE ANY EARLY TRACTION OR INDICATIONS, TRENDS THAT YOU CAN TALK TO US ABOUT? HOW YOU SEE THE HOLIDAY SEASON GOING AS IT IS STARTING?

CORNELL: A COUPLE OF THINGS I'M REALLY EXCITED ABOUT. IF YOU WALK TO THE FRONT OF OUR STORE, WE MADE A SIGNIFICANT CHANGE FROM LAST YEAR. WE'VE CREATED SOMETHING THAT WE CALL BULL'S-EYE'S PLAYGROUND, AND THE REACTION FROM THE GUESTS HAVE BEEN SENSATIONAL. HIGH DOUBLE DIGIT GROWTH RATES IN THAT SECTION. IT REALLY TELLS US THE GUEST IS INTERESTED IN WHAT WE OFFER. THEY'RE ATTRACTED TO OUR EXPERIENCE, AND WE'VE GOT A COUPLE OF OTHER UNIQUE OFFERS. WE PARTNERED WITH ADELE. WE'RE FEATURING THREE EXCLUSIVE TRACKS THAT WE'LL OFFER LATER THIS WEEK, AND WE THINK THAT'S GOING TO DRIVE ENORMOUS TRAFFIC INTO OUR STORES BEFORE THE HOLIDAYS. WE'VE GOT OUR GAME IN PLACE, AND I ALSO THINK THE BIG DIFFERENCE THIS YEAR VERSUS LAST YEAR WE'RE IN A MUCH BETTER POSITION WITH THANKSGIVING. AS WE CONTINUE IT TO THINK ABOUT REINVENTING FOOD, I THINK WE'RE GOING TO SEE A MUCH STRONGER TURNOUT IN OUR TARGET STORES AS OUR GUESTS GET READY FOR THE THANKSGIVING HOLIDAY.

REAGAN: ANOTHER KEY TENTATIVE YOUR STRATEGY OF COURSE HAS BEEN ON-LINE. YOUR DIGITAL SALES WERE UP 20%. LAST QUARTER, THOUGH, THEY WERE UP 30%, AND YOUR GROWTH TARGET IS 40% FOR THE YEAR. IS THAT GROWTH TARGET OFF THE TABLE NOW?

CORNELL: WELL, OUR FOCUS IS ON REALLY MAKING SURE WE'RE DELIVERING A GREAT EXPERIENCE. ANY TIME ANY WAY THE GUEST WANTS TO SHOP, AND I KNOW THAT MOST OF OUR GUESTS START WITH A DIGITAL DEVICE IN THEIR HAND. MAKING SURE WE'VE GOT THE RIGHT DIGITAL OFFERING AND WHETHER THAT BRINGS THEM TO THE SITE OR ENCOURAGES THEM TO COME TO THE STORE. EITHER WAY WE WIN. WE SAW TRAFFIC GROWTH IN STORE AND ON-LINE LAST QUARTER. I FEEL GOOD ABOUT OUR OVERALL STRATEGY WITH DIGITAL. OBVIOUSLY WE SIGNIFICANTLY OUTPERFORMED THE INDUSTRY. I JUST SAW THE OCTOBER E-COMMERCE NUMBERS FOR THE U.S. LAST NIGHT UP 8.6%. WITH THAT AS A BACK DROP, OUR 20% LOOKS REALLY STRONG. WE'VE GOT TO MAKE SURE WE'RE GROWING SHARE IN THAT SPACE. WE'RE CONTINUING TO OUTPACE THE INDUSTRY, WHICH WE ARE. WE EXPECT THAT TO CONTINUE IN THE FOURTH QUARTER.

REAGAN: AND SO SPEAKING OF GROWING IN THAT SPACE, YOU COMMITTED $1 BILLION DOLLARS TO YOUR DIGITAL STRATEGY THIS YEAR. BUT AMAZON IS JUST A BEHEMOTH. AND IT'S KIND OF A BAD WORD IN RETAIL BECAUSE EVERYONE IS TRYING TO WIN THAT SHARE THAT THEY'VE REALLY BEEN ABLE TO CAPTURE. IS $1 BILLION ENOUGH FOR YOU TO DO IT?

CORNELL: WELL, WE'RE PUTTING $1 BILLION BEHIND BOTH TECHNOLOGY AND SUPPLY CHAIN. AND IT IS TO MAKE SURE THAT, AGAIN, NO MATTER HOW THE GUEST WANTS TO SHOP, WE DELIVER A GREAT EXPERIENCE. ONE OF OUR BIG ADVANTAGES VERSUS AMAZON IS WE RUN 1,800 FANTASTIC STORES WITH TEAM MEMBERS THAT TAKE CARE OF THE GUESTS. WE RECOGNIZE THAT AS WE THINK ABOUT THE HOLIDAY SEASON, WHILE DIGITAL IS REALLY IMPORTANT, IT LOOKS LIKE 90% OR MORE OF RETAIL SHOPPING WILL STILL TAKE PLACE IN A PHYSICAL STORE. SO WE CAN'T LOSE SIGHT OF THAT. WE'VE GOT TO MAKE SURE WE PLAY OUR GAME. AND OUR STRATEGY IS ABOUT OFFERING THIS ON DEMAND CHOICE. ANYWHERE YOU WANT TO SHOP, IF IT'S IN STORE, WE WANT TO MAKE SURE IT'S A GREAT EXPERIENCE. IF IT'S ONLINE, WE WANT TO MAKE IT REALLY EASY. BUT THE COMBINATION IS WHAT REALLY ALLOWS US TO SUCCEED GOING FORWARD.

REAGAN: AND A BIG PART OF YOUR STRATEGY IS YOUR SIGNATURE CATEGORIES OF WHICH STYLE IS ONE OF THOSE.

CORNELL: YES. ABSOLUTELY.

REAGAN: AND APPAREL HAS BEEN A BIG TALKER IN THE INDUSTRY. BOTH DATA AND OTHER RETAILERS ARE SHOWING WEAKNESS IN APPAREL. SO WHAT DOES THAT MEAN FOR TARGET GOING FORWARD? DO YOU HAVE TO FIGURE OUT A NEW STRATEGY?

CORNELL: I DON'T THINK WE DO. AND AS I'VE LOOKED AT OUR COMPETITORS, I'VE LOOKED AT THE APPAREL REPORTS, I FELT BETTER AND BETTER ABOUT OUR THIRD QUARTER APPAREL NUMBERS. WE GREW ALMOST 3%. SO IT WASN'T THE 5% GROWTH WE HAD IN THE SECOND QUARTER, BUT VERSUS THE INDUSTRY, IT'S FAIR TO SAY IT WAS INDUSTRY LEADING IN MANY CASES. SO WHEN THE GUEST WAS SHOPPING FOR APPAREL, THEY WERE COMING TO TARGET. AND IT HAS BEEN A UNIQUE WEATHER PATTERN. WE'RE SITTING HERE TODAY IN MINNEAPOLIS, IT'S 60 DEGREES OUTSIDE. SO WHEN THINGS COOL DOWN, WE EXPECT THE GUEST IS GOING TO COME AND COME TO TARGET FOR APPAREL THIS YEAR. AND WE'VE CONTINUED TO ENHANCE THAT OFFERING. NOW, WE HAVE 1,400 STORES NOW WITH MANNEQUINS. WE KNOW OUR GUESTS REALLY LIKE WHAT WE'VE DONE. WE'VE INVESTED TO MAKE SURE WE'RE IMPROVING THE QUALITY OF OUR APPAREL OFFERING, MAKING SURE WE'RE ON TREND WITH GREAT NEW ITEMS, AND WHILE 3% WASN'T THE NUMBER WE WERE EXPECTING, IT WAS ONE OF THE BEST NUMBERS IN THE INDUSTRY. SO WHEN THEY SHOP FOR APPAREL, THEY'RE CLEARLY COMING TO US, AND I THINK WE'RE IN A GREAT POSITION FOR THE FOURTH QUARTER.

REAGAN: SCOTT HAS A QUESTION. SCOTT, GO AHEAD. AND I'M GOING TO MAKE SURE THAT MR. CORNELL HEARS WHAT YOU HAVE TO ASK.

WAPNER: YEAH COURTNEY, I APRRECIATE IT. THIS IS I BELIEVE THE FIRST QUARTER SINCE MR. CORNELL TOOK OVER THAT TARGET HAS NOT BEATEN ON EPS. NOT BEATEN ON EARNINGS. SOME ARE SUGGESTING TODAY THAT THE "HONEYMOON" IS OVER, AND THAT'S WHY THE STOCK MAY BE REACTING AS NEGATIVELY AS IT IS AND I'M WONDERING IF HE THINKS THAT INVESTORS ARE NOW GOING TO BE SCRUTINIZING HIM AND THE COMPANY CLOSER THAN THEY HAVE IN THE PAST.

REAGAN: SO SCOTT'S QUESTION ACTUALLY HAS TO DO WITH THE EPS AND HOW THIS IS THE FIRST QUARTER WE BELIEVE SINCE YOU HAVE TAKEN OVER THAT YOU HAVEN'T BEATEN ON EPS. SOME ARE WONDERING IF THE HONEYMOON IS OVER AND IF INVESTORS ARE GOING TO BE VERY CRITICAL OF THAT EPS NUMBER GOING FORWARD AS IT PERTAINS TO GROWTH IN THE STOCK PRICE.

CORNELL: WELL, WE LAID OUT SOME VERY CLEAR PLANS, AND WE'RE DELIVERING AGAINST THOSE. WE'VE HIT OUR SALES NUMBERS, OUR PROFIT NUMBERS. WE'RE GROWING TRAFFIC. IN OUR EPS, WAS AT THE HIGH END OF OUR RANGE FOR THE QUARTER. SO WE FEEL REALLY GOOD ABOUT IT. AND IT WAS UP 8.6% VERSUS LAST YEAR. SO WE GAVE VERY CLEAR GUIDANCE. WE'RE DELIVERING AGAINST THAT OUTLOOK. AND WE'RE RIGHT ON PLAN WITH THE GOALS THAT WE SET EARLIER THIS YEAR THAT WE TALK ABOUT AT OUR FINANCIAL CONFERENCE IN MARCH. SO, YOU KNOW, WE'RE ACTUALLY A SLIGHT BIT AHEAD ON A SALES STANDPOINT, ON A PROFIT STANDPOINT, AND ON A TRAFFIC STANDPOINT. SO WE FEEL LIKE WE'RE DELIVERING A STORY THAT'S VERY CONSISTENT AND OUR GOAL IS TO MAKE SURE VERY CONSISTENT, STEADY GROWTH. WE'RE STILL IN THE EARLY STAGES OF MODERNIZING, TRANSFORMING THE COMPANY. YOU KNOW, I'VE TALKED ABOUT THIS A LOT. IF IT'S A BASEBALL GAME, YOU KNOW, WE'RE IN THE SECOND INNING. IF IT'S A FOOTBALL GAME RIGHT NOW, WE'RE IN THE FIRST QUARTER. SO WE'VE GOT A LOT MORE WORK IN FRONT OF US, BUT WE'RE DELIVERING VERY CONSISTENT STEADY PERFORMANCE. BOTH FROM A SALES STANDPOINT, A PROFIT STANDPOINT, AND A TRAFFIC STANDPOINT. AND WE FEEL VERY GOOD ABOUT WHERE WE SIT TODAY AS WE ENTER THE FOURTH QUARTER.

REAGAN: WE WISH YOU LUCK ON THAT HOLIDAY QUARTER.

CORNELL: THANK YOU.

REAGAN: THANK YOU SO MUCH FOR DOING THIS WITH US TODAY.

CORNELL: THANKS FOR JOINING US.

About CNBC:

With CNBC in the U.S., CNBC in Asia Pacific, CNBC in Europe, Middle East and Africa, CNBC World and CNBC HD , CNBC is the recognized world leader in business news and provides real-time financial market coverage and business information to approximately 371 million homes worldwide, including more than 100 million households in the United States and Canada. CNBC also provides daily business updates to 400 million households across China. The network's 15 live hours a day of business programming in North America (weekdays from 4:00 a.m. - 7:00 p.m. ET) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News bureaus worldwide. CNBC at night features a mix of new reality programming, CNBC's highly successful series produced exclusively for CNBC and a number of distinctive in-house documentaries.

CNBC also has a vast portfolio of digital products which deliver real-time financial market news and information across a variety of platforms. These include CNBC.com, the online destination for global business; CNBC PRO, the premium, integrated desktop/mobile service that provides real-time global market data and live access to CNBC global programming; and a suite of CNBC Mobile products including the CNBC Real-Time iPhone and iPad Apps.

Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://www.nbcumv.com/mediavillage/networks/cnbc/.