OpenAI partnership, profit outlook cut

00:00 Speaker A

We actually have some numbers from other companies. Target is one of them, Brooke. And so let’s talk about that because there, the indication is not great. Although, you know, we’ve got to sort of tease out here how much is Target and how much is underlying consumer weakness.

00:13 Brooke

Right. Well, think about who exactly Target caters to. It’s catering mostly to a consumer who’s looking for discretionary goods. So maybe those beauty, electronics, and Target hopes eventually you’ll go to Target for their grocery section as well. But ultimately, all this backdrop they say this what the executive said on the earnings call this morning is that it’s choicefulness among consumers who are stretching their budgets right now and really prioritizing value. And that’s what they said led the company to cut their full-year profit outlook uh for 2025. The company also reiterated that it does expect a low single digit sales decline in the fourth quarter. and keep in mind, the fourth quarter is supposed to be robust. It’s the holiday season and yet Target is here expecting a low single digit sales decline. They said that they’re mindful of the challenges that consumers are facing right now and that’s exemplified by recent declines in consumer confidence. And so that’s ultimately what they say is how consumers are approaching this fourth quarter, this key holiday season. And also keep in mind, we have a new CEO, an incoming CEO, Michael Fadelgy, who’s been a long-time uh Target employee, but he also is really looking to advance how Target plays with tech. And that’s why this morning you heard that Target partnered with Open AI and exactly how that will work. in a few weeks or rather next week, they’re beginning to test out a beta, a launch within Chad GBT where consumers can type in Target and then say what they’re looking for, like say a holiday movie. That will then open up the Target app within chat GBT, suggest a few items. Consumers can build up or shoppers can build up their card and then it will go to the Target app. And this just really signifies that the new CEO who’s incoming, as Brian Cornell is expected to retire, really shows that he’s trying to double down on tech, get back what, you know, Target used to be known as Target, get back that feel and that touch and the merchandise, but also really integrate Target into everyday conversations that consumers are already having with chat GBT. And I did get to chat with the Chief product and information officer at Target in an exclusive interview last night. and he said that Target is the first retailer to really do this to have a conversation curation in retail space. and so it’ll be really interesting to see how this plays out especially since Walmart recently announced a partnership with Open AI as well.

02:22 Speaker A

Yeah, definitely. Um, I mean, the list of companies that don’t have a partnership with Open AI, it’s getting shorter and shorter….