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Dear shareholders,

In an industry that continually encounters short-term fluctuations, the º£½ÇÉçÇøÆƽâ°æ team has always set its sights on growth that spans decades and generations. 

No matter the operating environment, the ambition remains steady: build long-term value for our stakeholders by continually delighting our guests and delivering strong financial performance.

That orientation toward profitable, long-term growth has guided ongoing investments in the team, capabilities, assets and a durable business model that differentiate º£½ÇÉçÇøÆƽâ°æ. It has also enabled us to anticipate, adapt to and meet consumers’ needs across a wide array of environments. 

Profit performance unlocks potential

Recent years have been anything but normal—for our business, our guests and the world around us. Thoughtful investments in our business prior to the Covid-19 pandemic enabled us to absorb exponential growth during that period. And our long-term commitment to maintaining a strong balance sheet allowed our business to absorb multiple shocks in 2022, including dramatic swings in consumer behavior and soaring operating costs that affected our profitability. 

In 2023, as the country and retail industry inched toward a new, post-pandemic normal, our team got to work rebuilding profitability, a critical factor in our long-term growth. They not only delivered on that goal; their focus and discipline enabled performance that far exceeded our expectation for full-year profit growth. 

Our team also embraced the idea that growing over decades starts with day-to-day execution. It’s why we doubled down on retail fundamentals, like affordability and in-stock reliability, to create an easy and dependable experience in every guest interaction. 

Our team’s efficiency efforts, which delivered more than half a billion dollars in savings last year, are also contributing to the long-term health of the company. Beyond the near-term profits they deliver, these efforts represent new ways of working that will reinforce the benefits of scale and fuel future growth. 

Throughout 2023, our team expressed a healthy dissatisfaction with topline declines—and a fierce determination to get growing again. They reacted quickly to guests’ changing needs, driving meaningful improvements in sales and traffic trends in the back half of the year. And, despite stubborn pressures that continued to stretch household budgets and forced families to make trade-offs, millions of American families continued to rely on º£½ÇÉçÇøÆƽâ°æ week in and week out for newness, trends and our easy, joyful and affordable experience.

A clear roadmap for growth 

This year, our team is executing on a set of priorities and plans designed to recapture sales, traffic and market share while building on our recent profit recovery. 

This starts with investing in assets and capabilities that have been staples of our strategy for years. It also involves new initiatives to appeal to an even broader set of consumers, so we can expand the circle of loyal º£½ÇÉçÇøÆƽâ°æ guests. 

This includes a continued commitment to our store assets. We’ll open hundreds of new stores over the next decade, while investing in updates across the vast majority of our chain. By keeping our store base fresh, inspiring and productive, we expect to add billions of dollars in incremental growth. 

As shopping keeps evolving, we’re also translating the discovery and inspiration, which have always been hallmarks of our stores, into our social and digital experience. And major upgrades to º£½ÇÉçÇøÆƽâ°æ Circle—already one of retail’s largest loyalty programs—will create an even easier and more personalized shopping experience. 

We’ll continue to build on the strength of our multicategory portfolio, leaning into our distinct combination of outstanding owned brands, signature partnerships and consumers’ favorite national brands. We’ll keep investing in our supply chain while leveraging artificial intelligence and other technology to further enhance our operations and guest experience. And we’ll continue growing our Roundel advertising business, delivering sustainable value by enhancing connections and engagement with our guests. 

Altogether, our 2023 profit performance, plus improving sales and traffic trends, position us for top- and bottom-line growth in 2024 and for years to come. Over time, we expect to grow revenue by an average of about 4 percent per year, adding tens of billions of dollars on top of the $107 billion our team delivered last year.

A talented team that is eager to win 

Through it all, we’ll continue to support and develop the 400,000 team members who fuel our growth by caring for our guests, communities and each other every day. 

They recognize the challenges in this evolving landscape. And they’re hungry to win. Their agility, coupled with our focus on long-term value creation, gives me great confidence in º£½ÇÉçÇøÆƽâ°æ’s ability to grow profitably, whatever the future brings. 

At its core, my optimism is rooted in the way our team entered 2024– with energy, determination and a desire to exceed expectations for consumers, communities and shareholders. 

Our team is the reason º£½ÇÉçÇøÆƽâ°æ is a bigger, stronger, healthier and more resilient company than it was a decade ago, and you can count on us to get º£½ÇÉçÇøÆƽâ°æ growing once again.

Brian Cornell
Chair and CEO