“Looking ahead, we expect more favorable comparisons in the back half of the year as we've already made all the necessary inventory adjustments and expect that the bulk of this year's onetime tariff costs are also behind us.”

In context

“line versus last year. Bottom line, having completed the necessary inventory adjustments we had planned for the first 2 quarters of the year, we feel good about our inventory position as we enter Q3. Moving down to expenses on the P&L. Our second quarter SG&A dollars were 0.1% lower than a year ago, driven by strong expense control across the organization. I want to thank the entire Target team for their continued cost discipline and focus on efficiency in an environment where we are facing challenges on the top line. At the bottom of the P&L, the business generated GAAP and adjusted EPS of $2.05 in the second quarter compared with $2.57 a year ago. It's notable that the vast majority of this decline was driven by the combined impact of inventory adjustment costs and tariff-related costs. Looking ahead, we expect more favorable comparisons in the back half of the year as we've already made all the necessary inventory adjustments and expect that the bulk of this year's onetime tariff costs are also behind us. Before I turn to capital deployment, I want to briefly cover our after-tax return on invested capital, which measures the quality of our investment decisions over time. For the trailing 12 months through the second quarter, our business generated an after-tax ROIC of 14.3%, while this is a strong after-tax return on an absolute basis, it's one of the many financial measures we expect will improve over time. Turning to capital deployment. I want to quickly reiterate our priorities, which have been consistent for decades. First, we fully invest in our business and projects that meet our strategic and financial criteria. Second, we support the dividend and look to build on our decades-long record of growing the per share dividend annually. And finally, once the first 2 goals have been satisf”