“We often get the question of whether we believe operating margin rates can get back to pre-pandemic levels. The answer to that question is a definitive yes.”

In context

“tarts with growth, which drives leverage on many expenses in contrast to recent years where we faced rate deleverage on lower sales. Beyond leverage, we're continuing to expect rapid growth in margin-rich revenue sources, including Roundel and Target Plus. And with robust capital investments in both our infrastructure and technology, we expect to further boost productivity and create additional fuel for our business. We expect that the aggregate tailwind from these profit rate opportunities will exceed any P&L investments we will choose to make, allowing operating margin rates to increase. As we said consistently over the years, our goal is to move to the appropriate operating margin rate that will sustainably maximize profit dollar growth. And we plan to continue on that journey in 2026. We often get the question of whether we believe operating margin rates can get back to pre-pandemic levels. The answer to that question is a definitive yes. We believe the optimal rate is well above where we performed last year. And until we reach that optimal rate, we have the opportunity to grow operating margin dollars more quickly than sales over the next few years. So now I want to hit on something that Cara talked about earlier, which is the importance of differentiation in our business. It's a point worth reiterating, but I also want to approach it from the standpoint of the assets we can deploy in pursuit of that strategy. As one of the largest retailers in the U.S., we benefit from scale, similar to our larger peers. But importantly, because of our differentiated strategy, our assets may look different than our competitors, but we have exactly what we need to compete and succeed. At the top of that list is our stores, which are well”