Good morning, everyone. Thanks for attending our 2021 Financial Community Meeting. This morning, we're being joined by investors and others who are listening into this webcast. Following today's meeting, Michael and I will be available to answer any follow-up questions. Before I turn it over to Brian to kick off the meeting, I have a couple of important disclosures. First, any forward-looking statements that we make this morning are subject to risks and uncertainties, the most important of which are described in our SEC filings. And second, in today's remarks, we refer to non-GAAP financial measures, including adjusted earnings per share. Reconciliations of all non-GAAP measures to the most directly comparable GAAP measure are included in our financial press releases and SEC filings which are posted on our Investor Relations website. With that, let's begin the meeting. [Presentation]

Good morning, and welcome to our 2021 Financial Community Meeting. We're eager to share our insights on the extraordinary year that just passed, as well as our vision for what's next. But I couldn't start today without reflecting on the fact that 1 year ago at this time, the pandemic was just beginning to unfold. And in an effort to keep everyone safe and limit travel, we decided to convert this meeting to a virtual format. While we miss hosting our in person gatherings, it's prudent to stick with virtual presentations once again this year. But we're looking forward to resuming our live events, including this one and our Annual Shareholders Meeting in 2022. As I look back over the past year, a year when so much care and compassion was called for, I see purpose, coupled with capabilities as the essential enabler of our response. And the story of Target in 2020 is the story of a team that wanted nothing more than to take care of those around us, drawing on capabilities that were equal to that ambition after years of building an investment. So I want to start today by publicly recognizing and thanking our team. I'm incredibly proud of the resilience, empathy, care and concern they've shown for each other, our guests and communities through a very challenging 12 months and counting. None of what we'll share today would've happened without them. Even before the dramatic challenges of last year took hold, our team had been busy building the retail platform of tomorrow. But 2020 accelerated everything and, as such, our guests are already benefiting from and loving that platform today. At the heart of the platform was the belief that consumers would continue to flock to out stores for multicategory one-stop shopping; a friendly, well-trained…

Thanks, Brian. It's great to be joining all of you today, and I'm really excited to discuss how our teams have differentiated Target in the marketplace and some of the potential we see in front of us. Now I should mention upfront that I joined Target back in 2003. Since then, I've held a number of roles across merchandising. Over that time, I've seen a lot in our business, ups and downs, good years and rebuilding years, economic booms and a great recession. But I've never seen anything like last year. Of course, COVID-19 is an unprecedented event, challenging our team and our guests in ways we never could have imagined. But how we responded at Target, empowering our teams, moving quickly and leveraging the power of our multi-category assortment, that's Target at its best. In fact, that's Target better than I've ever seen us. So when I think about my new role in bringing together insight, strategy and innovation, plus planning, design, sourcing and buying functions, it's not about fixing anything, it's about improving on what worked so well last year. It's about keeping Target relevant by staying ahead of what our guests need and it's about positioning Target to drive growth in 2021 and for years to come. We were successful last year because we gave our guests a lot of reasons to be confident in shopping at Target. The work of our frontline teams to keep our stores safe and clean has made Target a destination, a happy place as our guests limit other trips out of their homes. Our suite of same-day fulfillment options was a game changer, driving triple-digit growth in our digital sales. And regardless of whether our guests were strolling our aisles or scrolling on our app, we struck that balance between replenishment…

Thanks, Christina, and good morning, everyone. While most people expect the operations guy to get right into the technical stuff, like capacity, throughput and automation, and don't worry, I will get there, I'm going to start with our people, the Target team. In a year when the flexibility and scalability of our operation was pressure tested, our team rose to the challenge, just like they always do. They were the connection between processes, technology and physical assets, that allow us to deliver safety, ease, reliability and even a bit of joy during a year of uncertainty for our guests. Of course, the team wasn't starting from scratch. As you heard already this morning, we've been investing in them for years and building capabilities that would set them up to better serve our guests in any time, let alone a global pandemic. Let me take you back for a minute to one of our favorite reference points. It was early 2016 and Target's strategy was coming into focus. After years of testing and listening to our guests, we knew that betting on our stores, an uncommon proposition at the time, would be at the heart of a durable and scalable model. And we needed an operation with the right capabilities to drive it. Getting there wouldn't be fast or easy. Quarter-after-quarter, we tested, iterated and learned how to modernize our supply chain, update our stores, use them as fulfillment hubs and train our team to bring every part to life. Then we had to learn how to do it at scale. In 2019, all these efforts started operating together, and we saw tangible proof through financial results, market share gains and guest satisfaction scores that our work was paying off. Fast forward to 2020, we were ready for the world to…

From that video alone, it's clear that our team is dedicated, tireless and incredibly compassionate when it comes to serving our communities. You saw it in the opening video and you've heard it throughout this morning. Our team is the heartbeat of Target. And even when faced with challenges, they bring their A game. Several years ago, we implemented a new operating model in our stores to lift up that drive. It was a shift towards specialized roles to give our teams expertise, empowerment and a sense of ownership in how they serve our guests. With that model in place, our team could quickly adapt to the ups and downs in 2020, execute well and play an essential role in our communities. Now like anything in life, balance is good, and we found opportunities to train our specialists in other areas like teaching a hardlines expert how to fulfill an online order. So they gain skills beyond their specialized position. Those investments in their development also add flexibility to our operation. We've always known that supporting our team would have great returns and it has. In addition to the bonuses, time off options, wellbeing benefits and expanded nationwide starting wage that Brian mentioned, we also gave our team even more hours. With a greater investment in our trained and expert workforce, we saw turnover drop and guest satisfaction rise. It's a strong testament to what can be done when we empower our teams to use their skills and passions to serve our guests. The bottom line is that as our business grew exponentially, our operation flexed alongside. And as we delivered for our guests, we built on the trust they put in us to meet their needs and make it easy. Going forward, we're taking the capabilities that drove Target…

This capability frees up time and space in our stores, which we can redirect into fulfilling more orders. In the end, it allows us to get orders to guests faster and at a lower cost. While we're still ramping up production at this first test facility, we're very confident in this concept and plan to open 5 additional sites in other urban markets later this year. In 2021, we'll also open more stores, accelerating our growth with 30 to 40 new locations a year, a pace we'll keep up for the foreseeable future. With our small format strategy, we'll expand in urban markets like Portland, L.A. and New York City, where there are still opportunities to serve new guests. And we'll continue our focus on college stores with the University of Georgia and the University of Michigan planned for later this year. We remain extremely bullish on our college sites. Even as the pandemic sent students to online classrooms and sales softened at many of those stores, we see them as a long-term play to serve the college guests, many of whom are on the brink of adulthood and building lifelong shopping habits. We'll also open a number of midsized stores to serve dense suburban neighborhoods from Denver to Brooklyn. As hundreds of retail vacancies have left holes in communities across the country, we've committed to sites where we can fill a need for the local guests. And as retail real estate prices have declined this year, we found these opportunities to serve new communities to be even more affordable. Along with opening new stores, we'll get back to remodeling our existing fleet. After stopping our full store remodels last spring, we'll pick back up later this year and complete about 150 stores in time for holiday, and we'll plan…

All I can say is wow. Those news clips paint a vivid picture of the roller coaster our team and our business experienced throughout 2020. All in all, it was a standout year in which everything we've spent years developing and building came together to serve our guests like never before. So today, after a year of record growth, I want to start my remarks by expanding on a point Brian mentioned earlier because investors often want to know, how much of Target's growth is being driven by specific strategies or specific assets? For example, they want to know if we can isolate how much of our growth is coming from Drive Up, from digital and total, our owned brand work, remodel program and any other way we can slice and dice the data. And I understand the impulse. Our internal team often wants to do the same thing. And of course, as a self described data geek, I'm inclined to think the same way. But then I see data like we first shared with you last year. Guests who tried Drive Up for the first time spend about 30% more on average compared with before, including an increase in conventional store shopping. And we see a similar change in behavior among guests who try Shipt for the first time. These findings demonstrate that the benefits of Drive Up and Shipt go far beyond the value of an individual trip. They're both capabilities that drive guest affinity, creating value that extends well beyond the services themselves. That same thinking applies to our merchandise categories. If you focus only on the amount of sales or growth by category, you can miss how they all work together to drive guest affinity. I see how this plays out with my own family. Over…

Thanks, Michael. As we wind down today's event, I'll leave you with a couple of thoughts. 5 years ago, we envisioned a future for ourselves, in which the key to guest preference and breakout growth lay in an unappreciated omnichannel asset called the store. Many were skeptical, which is why we said from the beginning that we were playing our own game and creating a category of one. Many thought the inevitable drift was for our store guests to become digital guests, and that the current only ran in 1 direction. We saw something different. We saw a future in which even the most committed digital-only guests would find the best and easiest shopping experience at Target because of how we connect that experience to our stores. We knew that to make our stores function for the future that we envisioned, we'd have to build, acquire and bundle a unique set of capabilities. The technology, the supply chain inventiveness, the physical assets and operations and the team of trusted neighbors that millions turn to for friendly service and a bit of everyday joy. We began to put all those pieces together like no one else had. And the experience was taking hold, on the timetable we expected. Then 2020 accelerated everything. And today, Target is as synonymous with same-day and safety as it is with style and swagger. That is a very strong position to be in. And here's where we intend to go with it. First, we'll continue to focus on market share over the long term. We believe our experience, including our fulfillment options, inspiring assortment, ease, safety and personal service will convert more and more consumers into guests. And we'll also work tirelessly to engage established guests across more of our channels and offerings. With new guests…

Thanks, Brian. Before we take a short break, I want to pause and review logistics for the upcoming Q&A session. For those of you planning to listen in, but not ask a question during Q&A, you should simply stay on this webcast, and you'll hear this session in a few minutes. However, if you received our conference call invitation and you plan to ask a question today, you'll need to exit this webcast and dial into the conference line provided on your invitation. Once you're on the conference line, the operator will provide further instructions. But again, if you're planning to access the Q&A session in listen-only mode, your best option is to stay on this webcast even if you received an invitation. With that, we'll pause for a few minutes to provide ample time for conference call participants to dial in and begin the Q&A session shortly. Thank you. [Break]

Ladies and gentlemen, thank you for standing by. Welcome to the Target Corporation 2021 Financial Community Meeting Q&A Session Conference Call. [Operator Instructions] As a reminder, this conference is being recorded Tuesday, March 2, 2021. We are now ready for our first question from Chris Horvers with JPMorgan.

A near - a '21 question, and then I have a follow-up on a longer-term question. Okay, in the SG&A outlook, on our math, you have about $1 billion related to COVID costs, such as special bonuses and cleaning, while you raised to $15 an hour midyear. To what extent are you assuming these costs come -- are tailwinds in '21? And can you quantify how significant the operating expense related -- is related to investment that's pressuring SG&A dollars?

Sure. I can take that one first, Chris. When you think about [ SG&A ] through the year, we'll be annualizing the move to $15, and there'll be some onetime things that don't repeat. You think about buying plexiglass dividers, you only do that once. The final story in SG&A will be written by what our sales outcome looks like too. But we've got a lot of levers within the model to continue to bend the cost curves in a direction we like throughout SG&A, the benefit of the volume growth that we've seen is that, that helps us get more and more efficient on how we fulfill that volume.

So then does it mean that sort of the SG&A rate coming back up is more of an embedded sort of negative top line outlook?

No, I wouldn't think about it that way necessarily. With the SG&A, we expect that our SG&A rate will be lower than 2019's rate, and that's a benefit of the significant scale that we've gained since then. If you zoom out, I think there's going to be a lot of movement between the different levers within margin and SG&A. And so that's why we've tried to give some of our best thinking on operating rate in total. And so a wide range. Not every meeting I would sit here and be describing a 1 point gap in operating margin between the incredibly strong 6 that we had in 2019 and the 7 we just put up. And that whole range is in play. I think it's slightly more likely we're in the bottom half of that range when all the dust settles in the top half, but we're going to have a lot to learn throughout the year based on where we ultimately land.

Understood. And then longer-term and bigger picture, we used to talk about showrooming with Best Buy. I was wondering what the organizational's thought change is on showrooming is versus national brands? You launched Apple and now you have Ulta. What's the thought change here? And what does it say about the willingness to take on more national brands in the apparel space where maybe the brands need to replace volumes from the mall? And is the bar higher here in terms of what those brands will need to bring to get into the Target store?

Yes. Chris, it's Brian. I think one of the things that we underscored throughout the pandemic has been the strength of our stores. And despite many of Americans really avoiding public places, we've seen very strong store comps, obviously, in excess of 7%. And we saw very solid store traffic. So I think we've continued to build trust. And I think coming out of the pandemic, our stores are going to be -- continue to be very relevant, very important. I think they go far beyond showcasing. We know our guests are inspired by shopping in our stores. They enjoy browsing. They enjoy seeing the combination of our owned brands and national brands. And now I think we just punctuate that further with the addition of brands like Ulta Beauty, Levi's, the expansion of Apple. The work that we've done throughout the year to create a showcase of owned brands and national brands and continue to invest in building a trusted and safe shopping experience. So as we think to the future, stores are going to play a very important role. It's going to be a place where our guests enjoy shopping each and every day. And I think they're going to continue to enjoy our multi-category portfolio for years to come. So we are -- continue to be very bullish on the role stores play. And I think these new national brand partnerships will only accentuate the importance of stores and drive future traffic to our stores.

Our next question is from Karen Short with Barclays.

I also had kind of '21 question and then a bigger picture question. So trying the SG&A question a little bit differently. If I look at what I think your COVID costs were and expenses were in 2020, it was north of $1 billion. And I think I calculate around $750 million in wages for the 2 quarters in the back half of 2020. So in theory, that would imply you lose about $1 billion in SG&A dollars in 2021. Is that the right way to think about it? Because it definitely gets me closer kind of to 7% on the operating margins, obviously, depending on sales.

Karen, like similar to the answer I gave, Chris, I think there's going to be a lot of moving variables through the gross margin and SG&A lines. And to get overly precise today about where any one of them comes in, I think, would be a bit of an exercise in false precision. The biggest factor versus a couple of years ago on the SG&A line is going to be the benefit of scale, and we can put that to use in so many ways across the business. And we've got a long history of investing in our team. That was a big part of the journey we embarked on in 2017 and attracting and retaining the best team in retail has been a center of our strategy for the last several years. And we continue to put the team at the forefront this year, and that will continue as well.

Karen, I might as well take the guidance question upfront and kind of remove the bull's eye from Michael's chest, again, no pun intended. But as we sit here today, I think we all recognize this is a very uncertain environment. We're still speculating around what's going to happen with the economy, how employment rates start to recover. While the trends are encouraging right now with the virus, we're all battling COVID each and every day. And while vaccine distribution is accelerating, millions and millions of Americans are still waiting for their turn to get that vaccine. We're still wondering when children go back to school. And when we'll return to the workplace. So we approach guidance, recognizing there's lots of uncertainty. But I'll go back to the fact that for most of the last year, we haven't provided guidance, but we have focused on execution. And I think our team has proven to be very flexible, very agile. We responded to the environment and we've been focused on delivering a trusted and safe experience for our guests, whether they're shopping in our stores or online. That focus on execution will continue in 2021. And I wouldn't confuse guidance or the lack thereof with our confidence to continue to take market share and outperform in the coming months and years. So I recognize the frustration of not being more precise, particularly on the top line as we think about sales, but I can guarantee you, our entire leadership team and every part of this organization is focused on retaining and growing market share no matter what the variables are we have to face. So I recognize, and we certainly like to be in a different position today, providing more precision. But what I can tell you is we're going to…

No, I appreciate that. And I just wanted to ask a bigger picture question. With respect to the partnerships that you've announced, what is the gating factor on accelerating or not accelerating some of these partnerships at a faster rate? I mean you've obviously given us the number of remodels that you've done, and I'm sure they're not all a primary target for some of these partnerships, but it seems like you could move a little faster on those. So a little color on that would be great.

Yes. I'll go back over time and think about the work we've been doing for the last 5 or 6 years. We always start by testing and learning. Listening to the guest, listening to our team, iterating along the way, validating our assumptions, both from a sales standpoint and a financial standpoint, before we accelerate. It's the same approach we've taken with remodels over the years and new small formats. It's the same approach we took to Pick Up and Drive Up. And we're doing the same thing as we think about partnerships with great partners like Apple and Ulta Beauty. We want to test and learn, make sure we get the model right. And then as we've demonstrated in the past, we'll hit the accelerator and make sure we expand and leverage scale as quickly as possible.

Great. And congratulations on a great year.

The next question is from Edward Kelly from Wells Fargo.

Maybe just one on '21 and then also a bigger picture for you. So on the gross margin, can you just provide a bit more color on the '21 gross margin settling in a little bit below '19. Is that just simply a function of digital growth getting ahead of sort of potential offsets and merchandising? And then how are you thinking about the gross margin outlook beyond '21?

Sure. The biggest factor in '21 was the supply chain and digital pressure, about 110 basis points of pressure on the year from that. But I think that's actually a good place to illustrate somewhat how we think about rate. Because to me, it's all about the dollar impact, not the rate impact. And digital is a perfect example. If you would have told us we could double the digital business and only see 110 basis points of pressure last year, I think we all would have taken that outcome. But more important than that, when we're growing digital, we're deepening our relationship with guests. And great things happen in aggregate to us when that occurs. And so sign me up for more digital growth going forward. We know that's a behavior that will be sticky. Because what comes with that, in addition to a little bit of rate pressure on the margin line, is hugely accretive sales benefits in total. And so biggest driver in 2021 for sure and I would welcome more digital growth going forward and we expect that's a place where we'll continue to excel.

Okay. And then I just wanted to follow-up with a question on Shipt. Can you provide just a bit more color on what you've seen this year from -- or this past year from like a membership trend standpoint, retail partnership growth? And then taking a step back, what's the competitive synergy of owning this business versus utilizing it as if it was a third party provider? And if there was potential to amount value in something like Shipt, would that be something that would interest you?

John, you want to talk about, Shipt?

Yes, sure. So we were incredibly pleased with Shipt's performance over the past year. They gained market share, very strong results for the business serving our retail partners. And just as important, and I'll come back to this, is Shipt has become an integral part of Target and our fulfillment on same-day operations. So incredibly important there. But I think the team down in Birmingham did an outstanding job this year, just scaling the business, right? They doubled the number of shoppers. We talked about how the Target sales on Shipt grew by 300%. Memberships grew by 130%. We continue to add great retail partners like Best Buy and Bed Bath & Beyond and several local and regional grocers. And so they've done just a really great job continuing to scale that business. I think when it comes to Shipt and obviously, the relationship with Target, incredibly important part about our same-day options. And you heard us talk all morning today about the key lever that having that suite of fulfillment, same-day fulfillment options for our Target guest has been over the past year and really over the past several years and will continue to be in the future. Not only is that the preferred way our guest continues to grow with us, but they're also economically advantaged. And so we see -- we continue to see huge opportunities for Shipt to continue to work directly with Target to continue to fulfill our guest's needs. The other thing I would say, is we see when a -- very similar to Drive Up, when a guest engages with Shipt through Target, again, we see growth in our sales in-store and online on the Target platform as well. So they get more engaged with Target. That is hugely valuable for us. So we bought that capability 3 years ago thinking this is what it would be. It would be incredibly important for us from a same-day perspective. It has only become more so has that accelerated through 2020.

And I'd just go back to a point that we've made a number of times. Our most valuable guest is a guest that uses -- utilizes all of our assets, shops in our stores, leverages Order Pick Up, uses Drive Up when it's convenient for them. And also, more and more, leverages the benefits of a personal shopper through Shipt. So we think that continues to be the easiest place to shop in America. Having all of those assets available for our guests is critically important. And we think those are going to be very sticky over time. Those guests who utilize Drive Up and Shipt during the pandemic, we think there's going to be a lasting connection to those fulfillment options as we go forward in 2021 and beyond.

The next question is from Ed Yruma with KeyBanc Capital Markets.

I guess, first, you were pretty early on in raising wages. Do you think that having a premium relative to some of your competitors is important to kind of keep the customer service level high? I guess I'm just asking that because it does seem like industry wages are moving up. And it's kind of a longer-term question, you guys have done a great job of differentiating your soft goods and your hard lines based on design. I guess as you think about food, particularly fresh food, how do you think you can differentiate and grab share?

Ed, I'll go back to the commitment we made at this meeting in 2017, when John Mulligan and I laid out our strategy for the company and talked about the billions of dollars of capital we'd invest in stores, in remodeling stores, in building new stores and building out our digital and fulfillment capabilities. At that time, we said the most important investment we were making was in our team. And I think the results we've seen in 2017 and 2018 and 2019 and 2020, is a by-product of that commitment to our team. Investing in wages and benefits, investing in training and career opportunities. And I think it's allowed us to build the best team in retail that's incredibly engaged, that's focused on taking care of our guests, but also taking care of each other. And our team was really the star of 2020. They stepped up during the pandemic and made sure we created a safe shopping environment. As we scale Drive Up and saw growth rates of 500% or 600%, they flexed and we're able to meet the needs of the guests. So I think the fact that we've taken a leadership position with wages, invested in our team, provided them the opportunities to grow their careers, that's a hallmark of the commitment we've made at Target to creating the best team in retail. And I think it's provided great returns on investments for shareholders. So we'll continue to make sure we invest in our team. To your question around design, the investments we've made in food and beverage, Good & Gather is off to a tremendous start, a multibillion-dollar brand in a short period of time. It's been well received by our guests, great quality, had a great value. And I think it typifies the things we do with our owned brands. And we're very excited about the momentum we had in food and beverage. We took significant market share throughout the year. And the guest has certainly recognized and appreciates the Good & Gather brand. So we think that's a way for us to continue to differentiate our offerings. And as John mentioned, we'll continue to add fresh products to our Drive Up assortment and Pick Up assortment throughout the year, providing our guests access to more of those products that they're looking for each and every day.

The next question is from Scott Mushkin with R5 Capital.

So I think the first question I have is really more of, I guess, strategic, structural. Just looking at the growth rate of your fulfillment cost just generally, is that going to be able to go below the growth rate of sales conceivably or conceptually?

Scott, I think on fulfillment costs, we continue to make progress on our fulfillment costs through 2 paths. First is each individual fulfillment service, we continue to lower the absolute cost of providing it. So Order Pick Up today, Drive Up today, Shipt today, ship-from-store, all of those are cheaper than they were 2 years ago. So we continue to see our costs come down there. The second way we see our costs come down is through mix. Drive Up, Order Pick Up and Shipt all have much better economics, as we've said for years than shipping from the back of our stores, which also has better economics than shipping from our fulfillment centers. So we -- and they are the fastest-growing portion of our portfolio. In addition to that, ship-from-store grows much faster than fulfillment. So we see favorable mix as well. So we continue to be really pleased with the progress we're making on the unit economics of shipping or delivering goods, fulfilling goods to our guests. The only thing I might add to that is, I mean, John talked about the power of having stores hit the hub of that fulfillment equation, and that helps all those marginal economics. But also important not to forget is the thing that matters most economically with digital is the growth in guest spend in total as they become those omnichannel guests that have a deeper relationship with Target overall. And so any time we're looking at the slice and dicing of the P&L by channel, which we do a lot of, and we've made a lot of progress getting more efficient over time, that always has to be stapled to the greater impact of that greater guest spend in total as they use more and more of our digital fulfillment services. Scott, one of the examples we've shared over the last year is the Target guest that is now using Drive Up, actually spends more money in store. It just deepens that relationship. So we can look at the economics, fulfillment node by fulfillment node, but it's really how it all comes together and how we deepen relationship with our guests, get them to use all of our assets and utilize both stores and digital fulfillment channels over time. So as John said, we're going to continue to improve the economics of each one of those capabilities but it's really the sum of the parts and that deeper relationship we build as our guests use more of our fulfillment nodes over time.

I appreciate that answer. I mean as a follow-up to what you guys are saying. I mean, obviously, Amazon has struggled with this, too, right? Their fulfillment costs grow faster than their sales. So if we're -- and I think, looking at it, as in kind of just as one kind of fulfillment cost, I mean, do you guys see a path ever for -- because I know Amazon struggled here too, like to getting fulfillment costs to grow on a slower basis than your sales? Because that's obviously where the leverage would be able to come in if you can make that happen.

Scott, the place I'd start is the power that the store gives us to fulfill because everything is cheaper when it comes to the store. And that helps us on the cost question that you asked. It's cheaper to ship a box a shorter distance from a local store after it's ridden our supply chain rails all the way to that store. Same-day fulfillment economics look a lot like store economics to us. And that's the piece to John's point that's growing fastest. And so the stores give us an incredible advantage to have advantaged cost profile as we fulfill. The other thing that the stores give us that has been incredibly valuable this year is great flexibility. We've seen the ability for stores to scale to meet guests' need in a way that I think probably would have surprised us if we can go back a year in time and see it all coming. But stores are so flexible. There's real power in being able to say, it's that same piece of inventories sitting on a shelf, and we can put it in a box and ship it out the back. We can drop it in a guest's trunk via a Drive Up. They can place it in their cart on a store trip and not having to be able to see perfectly exactly how that demand is going to come, but knowing the inventory can fulfill it and our great store team can make it happen however the guest chooses to shop gives us a huge flexibility advantage as well.

Yes. And just piling on now. The other thing, I go back to what Michael and Brian both said, it's the sum of the parts. And I don't think we need any more than to look at last year to see that when the sum of the parts operate together, we grew digital at an astronomical rate. We grew the store at a great rate. And together, we generated significant profits. So it is the sum of the parts working together that is the real power for us. And then Michael, I think, talked about this today that when you start to disaggregate them, you start picking at things that don't make a whole lot of sense because of the way we package the whole thing together to deliver that for our guests and the economic returns that provides for us in total.

Perfect, guys. And hats off to you guys in the stores and everything else for doing what you did this year. It's just amazing, you could do so much more volume and perform so well. So congratulations on that.

The next question is from Simeon Gutman with Morgan Stanley.

My first question, I want to ask, I guess, longer-term question on margins. It's sort of outside of '21 so I know '21, there's not a lot of visibility. But I know the conversations we've had about margins is more about there an outcome and you're not managing to a particular margin. Beyond '21, is there anything that could hold margin back in terms of some of the investments that you have planned for the out years?

Thanks for the question, Simeon. When I think about margins in the long run, the straw that will stir that drink is sales growth. And we're incredibly confident in the way we're positioned to build on the deepening guest trust the beginning of this year with long-term sales growth. You can see the power of leverage in our model in an exaggerated way in 2020, no doubt. But that's the focus of where we're investing going forward is to continue to gain share and grow the top line because that gives us a lot of levers to pull below there on the margin line. Yes. So the other thing that we've talked about periodically is the importance of mix in our business. And over time, our multi-category portfolio is a huge asset. Christina has been obviously in a merchant chair for a number of years and understands the importance of balancing our multi-category portfolio, the balance between our owned brands and national brands. And as John and Michael have talked about periodically, as we think about the future from a digital standpoint, we think that's going to continue to move more and more towards same-day, which from a mix standpoint is very advantageous to us. So I think our outlook for margin over the long-term is very bullish. As we leverage our multi-category portfolio, we continue to build our owned brands as well as great national brand partners. But as we continue to see guests take advantage of the speed and convenience of same-day digital fulfillment, all those things add up to a very healthy mix management and margin control.

Great. Okay. And my follow-up is on the $9 billion of share that you gained in 2020. I saw it was one of the pillars in that pyramid debt foundation. Can you talk about how you're thinking about retaining it? Anything more in terms of -- you're hoping to keep 100% of it and build from it. Can you share a range of outcomes in terms of share retention? And then anything on the categories that you think you can make the most headway with in 2021?

Simeon, I'll come back to -- we saw a really strong share performance against our entire portfolio in 2020. And that continued in the fourth quarter, and we expect to continue to be in a strong share position in 2021. Obviously, we're still sorting through what the overall industry performance will look like, category by category as we think about 2021. But I'll let Christina comment on some of the early observations that we have as we think about the strength in our owned brands, some of the newness that we're bringing to market, the new national brand partnerships and the great investments we have with both our owned brand and national brand vendor partners. So I think we're well positioned to continue to grow share. And I think the investments we're making in our stores and the store experience and in digital positions us well to continue to grow share for years to come.

Yes. I might add a few points there, but to really punctuate what Brian said is the multi-category portfolio that we have gives us so much flexibility. And if we follow the guest, we will deliver. We -- when the guests chose not to really change their order very much and more yield pass all year, it had an impact on the apparel industry, yet we significantly outpaced the performance in that industry. This year, people are going to buy new clothes because people don't want to wear the same thing over and over. They'll do their makeup. They might even buy a piece of luggage if they're venturing out of the trip. And that ability to flex with the needs of the guests through the breadth of our portfolio is what's going to keep us growing share and gaining against the industry for years to come.

Great, and congratulations.

The next question is from Stephanie Wissink with Jefferies.

This is Corey Grady on for Steph Wissink. I wanted to follow-up on the February comp comment. How much of that strength would you attribute to stimulus? And can you compare the impact of this round on what you saw last summer?

Yes. We've spent a lot of time trying to sort through some of the factors behind that. Again, I think so much of it has been the investments we've made in safety and the shopping experience throughout the last year. We certainly have seen guests shop all of our categories in the month of February. So broad-based strength. And I think, again, the guest is responding to some of the newness in our assortment. And to Christina's point, they're looking for the opportunity to shop our stores and find new items. They're tired of the yoga pants and really appreciate some of the new assortment we have in apparel. They're still shopping for their homes as they refresh the core. They're still heating at home so kitchen and food-related items are still really important. So we see a guest shopping all of our categories, taking advantage of both stores and our digital channels. And I think it's a byproduct of the investments we've made throughout the pandemic to build trust to make sure they know we've got a safe shopping environment and the great work that our teams have done to make sure that they're focused every day on meeting the needs to our guests. So very encouraged with the month of February. And we'll continue to make sure we stay agile and flexible to meet the needs of the guests throughout the next 11 months.

As a follow-up, I wanted to ask about your inventory position. Where do you stand on in-stock positions today? Are you seeing any gaps that you feel you need to remediate in the near term?

Christina?

We're very pleased with our inventory position. We continue to build in support of sales. And the reality is that we are -- we're looking to fill in the gaps where we have a few selectively, but it's been a marked improvement throughout the year and the responsiveness of our team is incredible. We have not only a very responsible supply chain team here in the United States, but across the whole world. That intel and insight allows us to manage a very complex supply chain with efficiency and always been focused on getting our out of stocks in the best position possible.

And Corey, an opportunity to really thank our vendor partners who have been very responsive to meeting our needs. Obviously, no one anticipated the kind of comps we were driving in 2020. I talked about the almost historic number we delivered in January, and our vendor partners have been very responsive, working with our merchants and supply chain teams to ensure that we fill in some of those gaps and have the inventory we need as we go forward.

Our next question is from Paul Lejuez with Citigroup.

Curious when you look back on 2020, how many new customers were new to Target? And how did that break down versus when you acquired them first half or second half? And is there anything you can share in terms of the patterns that you saw in terms of those gained in the first half? How did they spend in the second half? Maybe talk about the frequency and spend in their purchases.

Sure. I can start. Thanks for the question, Paul. As we think about new customers, no doubt, there are some new customers to Target this year. We've shared some of the digital guests that we've gained in past calls. The thing that we're most focused on is deepening the relationship of those guests that have really stepped up their trust and their spend and their share of wallet with Target over the last year. And so we talked about the 12 million new omnichannel guests this year. That's the place where we focused a lot of that kind of deepening of the guest relationship and the things that we're tracking. We're encouraged to see the stickiness of a lot of the new behaviors that were tried in 2020. So things like Drive Up, thanks to the incredible experience our store teams provide. Once guests try a service like that, they come back and we've seen higher rates of stickiness this year than historically for some of those digital fulfillment services. And that bodes well for the stickiness of those guests and those behaviors going forward. And so while we do watch new guests, and it's great to get a new guest and convert them to a deeper Target guests over time, a lot of America shops Target and it's the deepening of those existing guests as they shop us in new and different ways and more often, that's our focus.

Yes. Paul, the only other point I would add is, as we've looked at the guests during the pandemic, we know they're consolidating where they shop. And we may have had a Target guest that was shopping for home or beauty, but they're now shopping for apparel, picking up food and beverage, exploring new categories. They may be coming to us for electronics and toys. So to Michael's point, while most of America shops with Target, during the pandemic, we've seen consumers consolidate the number of places where they shop. They're now experiencing and are active in more categories, and we think that provides lasting benefits for us for years to come. Operator, it looks like we've got time for one final question today.

Our last question is from Joe Feldman with Telsey Advisory Group.

I wanted to kind of continue on that train of thought, Brian, with regard to customers come in for one thing, they shop for others, what are you guys doing from a data analytics standpoint and to really stimulate the customer to buy more items beyond what they normally buy? And I was just curious where we're at in terms of the data analytics and leveraging the data to really harness it and make it more useful.

Joe, obviously, it's been a big area of focus for us for many years. And I'll come back to something we haven't talked about a lot today, which is the membership within Target Circle. The fact that we now have 90 million members in Target Circle, which gives us an understanding of their needs, their wants, how they're shopping, new categories and new items we can introduce them to. So we're going to continue to make sure we leverage Target Circle to build deeper relationships, introduce that guest to new categories, new fulfillment options. And over time, we think that's a very valuable asset that will continue to drive growth, help us build market share and continue the momentum that we established in 2020. So with that, I want to thank everyone for joining us today. We look forward to seeing all of you in person in 2022. And obviously, John and Michael will be available for any follow-up questions today or over the balance of the week. So thank you for joining us, and stay well.