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WHEN: Today, Tuesday, October 25th
WHERE: CNBC's "Closing Bell"
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Target CEO Brian Cornell on CNBC's "Closing Bell" (M-F, 3PM-5PM ET) today, Tuesday, October 25th. Following is a link to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000562418.
All references must be sourced to CNBC.
COURTNEY REAGAN: I AM HERE WITH BRIAN CORNELL, TARGET CEO. SO I GUESS THE FIRST QUESTION IS ABOUT YOUR HOLIDAY STRATEGY. YOU'RE UNVEILING MANY PARTS OF IT TODAY. BUT YOU'RE HOLDING OFF ON A LOT OF THE WIDESPREAD MARKETING MESSAGES UNTIL AFTER THE ELECTION. IS THE ELECTION SOMETHING THAT IS GOING TO HURT TARGET SALES? CONSUMERS SENTIMENT NUMBERS ACTUALLY SHOWED INVESTORS AND CONSUMERS ARE KIND OF CAUTIOUS RIGHT NOW.
BRIAN CORNELL: WELL, FIRST OF ALL, WELCOME TO OUR NEW TRIBECA LOCATION. AND TODAY, WE DID TALK ABOUT OUR HOLIDAY PLANS AND WE FEEL REALLY GOOD ABOUT OUR APPROACH TO THE HOLIDAYS. WE'VE GOT SOME EXCITING NEW MERCHANDISE, WE'VE GOT GREAT CREATIVE, BUT TO YOUR QUESTION, WE ARE GOING TO BE THOUGHTFUL ABOUT HOW WE BRING THAT TO LIFE. AND WE WANT TO MAKE SURE THAT WE HAVE THE RIGHT APPROACH DURING THIS ELECTION SEASON, BUT WE HAVE A GREAT MESSAGE TO DELIVER. WE'RE VERY EXCITED ABOUT OUR PLANS. AND WE'RE REALLY CONFIDENT ABOUT OUR PLANS FOR THE FOURTH QUARTER.
REAGAN: SO YOU'RE ADVERTISING WHERE AHEAD OF THE ELECTION?
CORNELL: WELL, WE'LL HAVE A COMBINATION OF A GREAT TV CAMPAIGN. WE'RE CERTAINLY LEVERAGING DIGITAL AND WE ARE ALSO WEAVING IN SOME REALLY POWERFUL HISPANIC MARKETING. SO WE FEEL GREAT ABOUT THE COMBINATION OF OUR CAMPAIGN. WE'VE GOT A GREAT APPROACH TO THE HOLIDAY, ONE I THINK IS GOING TO BREAK THROUGH DURING A CLUTTERED SEASON. SO I'M REALLY CONFIDENT WITH THE PLANS OUR TEAM HAS PUT IN PLACE.
REAGAN: AND LAST YEAR HOLIDAY 2015 VERY STRONG FOR TARGET. BUT LAST QUARTER WAS A BUMPY ONE. YOU'VE TAKEN DOWN YOUR GUIDANCE. ARE YOU VERY CAUTIOUS STILL GOING INTO THE HOLIDAY SEASON?
CORNELL: COURTNEY, SITTING HERE TODAY, IF YOU THINK ABOUT THE FIRST HALF OF THE YEAR – OUR COMPS ARE FLAT, OUR PROFITS, OUR EPS WAS UP 8.2%. AND WITHIN THAT, THERE IS A LOT OF POSITIVE THINGS HAPPENING. I FEEL REALLY GOOD ABOUT THE PERFORMANCE IN APPAREL. WE'VE HAD SEVEN STRAIGHT QUARTERS WHERE WE'VE GROWN MARKET SHARE. OUR HOME CATEGORY, WHICH IS REALLY IMPORTANT DURING THE HOLIDAYS, LAST YEAR WAS OUR BEST YEAR IN A DECADE. WE'RE UP 4%. WE'VE SEEN THAT STRENGTH CONTINUE INTO 2016. AND I THINK WE'VE GOT GREAT PLANS FOR HOME DURING THE HOLIDAYS. SO THERE IS A LOT OF THINGS THAT HAVE BEEN WORKING REALLY WELL. ONE OF THEM IS OUR DIGITAL PERFORMANCE. WE CONTINUE TO SEE STRONG GAINS IN DIGITAL. YEAR TO DATE, WE'RE UP ALMOST 20% AND WE HAVE A VERY STRONG CAMPAIGN FOR THE HOLIDAY. SO, WE'VE HAD A COUPLE BUMPS ALONG THE WAY AS YOU DESCRIBED, BUT WITHIN THAT, SOME REAL STRENGTH IN OUR SIGNATURE CATEGORIES. THE THINGS WE HAVE DONE IN APPAREL AND HOME, WE LAUNCHED TWO GREAT NEW BRANDS THAT I AM VERY EXCITED ABOUT. CAT & JACK, OUR APPAREL LINE FOR KIDS, AND PILLOWFORT. AND WE EXPECT BOTH OF THEM TO BE BILLION DOLLAR BRANDS. SO THERE'S A LOT OF THINGS WORKING AND I THINK IT SETS US UP FOR A VERY, VERY EXCITING HOLIDAY SEASON.
REAGAN: SO ELECTRONICS ISN'T ONE OF YOUR SIGNATURE CATEGORIES, BUT IT DOES OVERINDEX DURING THE HOLIDAY SEASON, IT BECOMES VERY IMPORTANT. AND THE LAST QUARTER, IT WAS A TROUBLE SPOT. YOU CALLED OUT APPLE PRODUCT SPECIFICALLY SAYING THEY WERE DOWN 20%, SALES IN THOSE PRODUCTS. IS THAT STILL A PROBLEM AND ARE YOU GOING TO SCALE BACK YOUR APPLE PRODUCT PRESENCE DURING THE HOLIDAYS?
CORNELL: WELL, THE HOLIDAYS ARE AN IMPORTANT TIME FOR THE ELECTRONIC CATEGORY. WE'VE WORKED ACROSS OUR ENTIRE VENDOR COMMUNITY TO MAKE SURE WE ARE BRINGING GREAT NEWNESS TO THAT CATEGORY. SO WE FEEL REALLY GOOD ABOUT THE PARTNERSHIP WITH APPLE. THEY'RE BRINGING SOME GREAT INNOVATION FOR THE HOLIDAYS. WE'RE WORKING CLOSELY WITH SONY, WE'VE GOT SOME GREAT PLANS FOR PLAYSTATION. AND IMPORTANTLY, WE ARE PARTNERING WITH GOOGLE TO BRING GREAT NEW ITEMS TO OUR STORES. SO ELECTRONICS ARE IMPORTANT DURING THE HOLIDAYS AND WE'RE READY TO STEP UP AND PLAY.
REAGAN: I THINK KELLY HAS A QUESTION OVER AT THE STOCK EXCHANGE.
KELLY EVANS: THANKS COURTNEY AND HI BRIAN. I JUST WANTED TO ASK ABOUT YOUR GROCERIES. MY MOM IS ONE OF THE PEOPLE WHO LOVES TO POP INTO YOUR STORE, PICK UP SOME ITEMS FOR THE KITCHEN. BUT THERE IS AN ISSUE WITH THE AVAILABILITY OF SOME FRESH ITEMS AND A SENSE THAT YOU'RE STILL MORE EXPENSIVE RELATIVE TO WALMART. HOW MUCH ARE YOU PREPARED TO INVEST IN GROCERY ESPECIALLY AS MORE AND MORE OF YOUR COMPETITORS ARE CHASING THIS SPACE?
CORNELL: KELLY, IF YOU THINK ABOUT WHAT WE'VE DONE HERE IN OUR NEW TRIBECA LOCATION, THIS IS A GREAT EXAMPLE OF WHAT WE WANT TO MAKE SURE WE CREATE WHEN WE THINK ABOUT OUR FOOD STRATEGY. AND IF YOU WERE TO WALK DOWNSTAIRS IN THIS GREAT NEW LOCATION, WE HAVE HUNDREDS AND HUNDREDS OF GUESTS SHOPPING EVERY DAY. AND AS THEY LOOK AT APPAREL AND HOME, THEY'RE ALSO FINDING THOSE FOOD ITEMS THAT THEY'RE EXPECTING TO FIND AT TARGET. SO IT'S A GREAT ASSORTMENT OF CONVENIENT GRAB AND GO ITEMS. WE OPERATE A SELF-SERVICE GROCERY ENVIRONMENT, BUT WE REALLY TRY TO MAKE SURE WE STEP UP THE QUALITY OF ITEMS WE'RE OFFERING IN PRODUCE. WE WANT TO MAKE SURE THAT WE HAVE GRAB AND GO MEAL ITEMS. WE'RE NOT A TRADITIONAL FULL SERVICE GROCER. THAT IS NOT PART OF OUR FUTURE. THAT IS NOT PART OF OUR STRATEGY. BUT WHILE YOU'RE SHOPPING AT TARGET, WHILE YOUR MOM IS IN OUR STORES, WE WANT TO MAKE SURE WHILE SHE IS THERE, SHE CAN FIND THE ASSORTMENT OF ITEMS, THE QUALITY THAT SHE EXPECTS WHEN SHE IS IN ONE OF OUR TARGET STORES.
REAGAN: I THINK WILFRED HAS A QUESTION AT THE STOCK EXCHANGE.
WILFRED FROST: I DO INDEED. BRIAN, JUST WANT TO ASK YOU ACTUALLY ABOUT PRIMARK AND WHETHER YOU'RE FEARFUL OF THEIR FORRAY ACROSS THE POND AND PUSHING INTO THE U.S. MARKET?
CORNELL: WILFRED, WE HAVE LOOKED AT THEM VERY CAREFULLY. WE HAVE SEEN THEIR STORES IN BOSTON. I WAS ACTUALLY JUST IN LONDON A FEW MONTHS AGO TO WALK SOME OF THEIR ARE NEW LOCATIONS. AND THEY'RE A TERRIFIC COMPETITOR, BUT WE OPERATE IN A VERY DIFFERENT SPACE. WE HAVE A UNIQUE MULTICATEGORY APPROACH. SO WE COMBINE THE CONVENIENCE OF SHOPPING FOR APPAREL AND HOME. BABY AND KIDS. WE HAVE A GREAT SELECTION OF TOYS AS WE THINK ABOUT THE HOLIDAYS. WHILE YOU'RE THERE, YOU CAN PICK UP HOUSEHOLD ESSENTIALS AND CONVENIENT FOOD ITEMS. SO WE THINK THAT THE COMBINATION OF OUR ASSORTMENT, OUR MULTICATEGORY APPROACH, THE ABILITY TO SHOP IN OUR STORES, ORDER ONLINE AND PICK UP AT ONE OF OUR STORES, OR HAVE US DELIVER A PRODUCT DIRECTLY TO YOUR HOME GIVES US A VERY UNIQUE COMPETITIVE POSITIONING.
REAGAN: SO I KNOW THAT YOU HAVEN'T ANNOUNCED YOUR PLANS IN DETAIL FOR BLACK FRIDAY OR CYBER MONDAY. BUT LOOKING AHEAD, LAST YEAR ON CYBER MONDAY, IT WAS ONE OF YOUR BEST DAYS EVER ONLINE, IF NOT THE BEST.
CORNELL: IT WAS OUR BIGGEST DAY EVER.
REAGAN: AND YOUR WEBSITE CRASHED. AND THAT WAS NOT THE FIRST TIME THAT HAPPENED. SO WHAT CAN DO YOU TO ENSURE CONSUMERS THAT WON'T HAPPEN AGAIN?
CORNELL: WE'VE BEEN DOING A LOT OF WORK OVER THE LAST YEAR. AND LAST YEAR CYBER MONDAY, IT WAS OUR BIGGEST DAY EVER. AND IT LED TO A QUARTER WHERE WE DELIVERED OVER 30% GROWTH ONLINE. SO WE STEPPED BACK, WE'VE ACTUALLY DEVELOPED AN ENTIRELY NEW PLATFORM FOR OUR WEBSITE. WE CALL IT AN ADAPTIVE WEBSITE PLATFORM. AND WE'RE NOW, WHETHER YOU'RE LOOKING AT TARGET.COM ON YOUR LAPTOP, YOU iPAD OR A SMARTPHONE, YOU HAVE THE SAME EXPERIENCE. SO IT IS A MUCH MORE FLEXIBLE PLATFORM. IT GIVES US MUCH MORE CAPACITY AND MUCH MORE RELIABILITY. SO WE'VE MADE BIG INVESTMENTS AND WE'RE CERTAINLY READY FOR A VERY BIG CYBER MONDAY.
REAGAN: ALLRIGHT, WELL, BRING IT ON. THE HOLIDAY SEASON IS RIGHT AROUND THE CORNER.
CORNELL: WE'RE EXCITED.
REAGAN: THANK YOU SO MUCH.
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