Core Insights - CEO Brian Cornell will step down in February, with COO Michael Fiddelke set to succeed him, focusing on digital investments and AI-driven operations [1][3] - Digital sales increased by 4.3% year over year, supported by a 25% rise in same-day delivery, although this growth has slowed compared to the previous year [4][5] - Same-store sales declined year over year, with guidance indicating a continued pullback, despite slight improvements across categories [3][5] Digital Sales and Tech Investments - Digital sales now represent 18.9% of consolidated sales, up from 17.9% last year, but this is a slowdown from the 8.7% growth seen in the same quarter last year [4] - The number of transactions fell by 1.3%, and transaction amounts decreased by 0.6%, with consolidated comparable sales down by 1.9% [5] - The company anticipates a low-single-digit sales decline for the year, with expectations of short-term pressure from tariffs [5] Strategic Focus - Fiddelke emphasized a commitment to building new momentum and returning to profitable growth, with a focus on digital operations and AI integration [5][6] - The company is redesigning cross-functional processes to improve decision-making and forecasting accuracy through AI [6] Product Performance - Beauty sales showed slight declines, but core beauty categories like skin, bath, and hair care experienced low single-digit growth [8] - Discretionary business saw a 400-basis point improvement from Q1 to Q2, indicating increased consumer demand in certain segments [9] Financial Outlook - CFO Jim Lee indicated a cautious approach to guidance due to consumer uncertainty and tariff impacts, projecting single-digit declines for the year [10]