Target Earnings Call Insights: Rewards Cards and Inventory
Colin McGranahan – Sanford C. Bernstein & Co.: Just on the rewards card, just shy of 12% penetration. It sounds like Kansas City is running 15% and you are continuing to see pretty steady increases there, so a couple of questions. Firstly, where do you think the ultimate penetration goes? Would you expect the total company penetration to be up to the 15% range this year given Kansas City, but is Kansas City still generating the 50% plus lift of incremental spend which would suggest that a comp lift to the total business is running about 150 basis points?
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John J. Mulligan – EVP and CFO: First on penetration, ultimately where do we expect penetration to go this year? I think you’re probably in the right range for the Company by Q4. Not on average for the year obviously, but probably in November and then obviously in December it comes down a little bit with the sales surge. But in November that’s probably about the right range. In Kansas City, you’re right. We continue to see fantastic performance, penetration growing 300 basis points a year and the lift there, just like it is in the rest of the country, continues to be in excess of 50% for both credit and the debit product. The only comment I’d make is – other comment I’d make is the lift in penetration now driven about two to one by debit rather than credit, and that’s a reversal from what we saw about a year ago at this time.
Gregg W. Steinhafel – Chairman, President and CEO: Yeah. I would just add that over the long term we really don’t know how high high is. We continue to be excited about the performance in Kansas City and the chain, and we believe that there is still a long runway with the growth of this the penetration over time. We’re going to continue to invest in it and clearly, guests really the ones that get it, love it and our challenge is continue to get more guests to understand the immediate and powerful benefits that both of these cards provide for them.
Colin McGranahan – Sanford C. Bernstein & Co.: Then just a quick follow-up for Kathee. I know you do a pretty thorough job looking at pricing on a regular basis. Any comments on what you’re seeing in the environment (obsession) and more consumables area?
Kathryn A. Tesija – EVP, Merchandising: I would say that the environment is pretty rational right now. It’s always very competitive and as we head into the summer and getting closer to back to school, I’m sure that that will heat up as it does every year. But I would say right now it’s pretty rational.
Daniel Binder – Jefferies & Co.: I had two questions. First on the inventory position. Obviously, you had better sales in Q1. I’m assuming maybe that’s a little bit wide that your inventory is down slightly year-over-year. I just wanted to get your thoughts on your ability to flex in Q2 is there any limiting factors based on the inventory position today? Then secondly if you could share any web metrics with us that outline some of the progress that you’ve made?
Gregg W. Steinhafel – Chairman, President and CEO: I’ll take the first one on the inventory. Our inventory remains in great shape. We have a large base inventory that we can sell into, so we don’t believe there is any real or any meaningful limitations in our ability to perform in the second quarter, even exceed the sales plan that we’ve laid out for you today.
Kathryn A. Tesija – EVP, Merchandising: The second one on WebMatrix, we’re very focused on our overall site performance watching speed on all parts of the site, all pages as well as our ability to improve search and order fulfillment. So I’ll tell you, we are investing meaningful resources in our multichannel efforts. We’re very committed to making improvements. We have seen those metrics improve meaningfully so far this spring. We still have a lot of releases yet to come this spring and summer, and we think that that will continue to help these metrics improve. So a big focus for us and you’ll see us continue to talk about it as we go throughout the year.