David Bellinger

Management confirmed Mexico mostly satellite stores today, strengthening commercial assortments suggests future hub/MegaHub deployment needed.

Management dismissed major deferral risk, noting consumers have already been deferring for 2+ years and maintenance needs compound over time.

Management described direct import capability and long-tail distribution technology in new DCs, plus continuing automation at existing Redlands facility.

Management reported no empirical evidence of immigration-driven demand softening similar to 2016-17, including border markets.

Management confirmed density tests prove adding multiple mega-hubs per market works with minimal cannibalization.

Marvin avoided confirming current run rate, noting biggest sales weeks still ahead. Described K-shaped economy with higher income spending and lower income cautious. Said current trends consistent with guidance assumptions.

Brandon confirmed 3% like-for-like inflation consistent with Q4. Expects moderation as tariff noise from prior year cycles. Company investing to protect value and drive repeat traffic and transactions.

Brandon framed second-half guide as flat to 2.5% comp split evenly Q3/Q4, driven by Total Home initiatives. Marvin confirmed continued portfolio pricing approach.

Brandon noted no single customer exceeds 1% of revenue, 45% residential / 55% commercial split. Marvin emphasized the FBM + ADG interior solutions platform vision.

Bill confirmed no evidence of pull-forward in appliances; strength has been building since Q3 last year. Brandon noted they don't believe there is widespread pull-forward.

Hal said Q4 promotional activity has not carried over into 2026 so far. Spring plans already set for normalized environment. Optimistic about 2026 setup citing tax refunds, potential for strong spring after 2 tough years, strategic initiatives, and best-ever supply chain and store operations.

Seth described ammo as natural extension of wildlife/recreation Q category. Currently in roughly half the chain with plans to hold at that level into 2026. Already market leader in safes with growing feed, attractants. Field and Stream partnership reinforcing category depth.

Kurt cited tariff-driven inventory capital needs and higher interest rates. Buyback cut to $325-$375M still removes ~1% of float, within long-term 1-2% target. No change to EPS guidance.

Kurt attributed 9bp gross margin decline to cycling 129bp growth in prior year Q4. Mix was only meaningful driver. 2025 gross margin expected modestly higher in first half, with transport efficiency laps by midyear.

Ron said Costco feels well-positioned on delivery, citing big-and-bulky times cut from weeks to days and same-day delivery mostly under 45 minutes, viewing it as incremental.

Gary said the decline was smaller than the maturation math would have implied thanks to targeted digital-member retention communications, cautioned a few more quarters of slight decline are still possible, and said auto-renew has been a long-standing program getting periodic in-warehouse promotional emphasis.

Gary said personalization is still early with plenty of roadmap, declined to share specific metrics, and framed success in terms of member engagement and driving digital sales growth faster than the warehouse business.

Called strength broad-based across the chain and pointed to remodels and new stores for lift where thinking has not reached.

Passed to Cara, who described the new fandom/collectibles destination including trading cards.

Fiddelke acknowledges it's too early to understand every economic put and take of agentic commerce. Cites two Target advantages: scale (already partnering with major tech platforms for shoppable Gen AI experiences) and curation DNA (Target's store curation aligns with how AI curates).

Jeremy said fuel costs are not typically a meaningful SG&A mover at the company level, noting it takes pretty substantial price movement to move the needle.

Brent characterized goods-to-person automation as ongoing evolution rather than transformational, noting each DC is tailored to its market. Declined to quantify specific benefits but confirmed cost and efficiency advantages.