Good morning. Just how encouraged are Target executives about the state of their turnaround project?

Target executives said "encouraged" or "encouraging" 20 times on their analyst call Wednesday to discuss second-quarter results-nearly matching 21 such occasions in Q1 and pacing far ahead of the nine times executives used those words on the calls for the first half of last year.

"While we know there is still a lot of work to be done for every store to reach its full potential, we're very encouraged by this progress we're seeing and the momentum we're building," CEO Michael Fiddelke said Wednesday.

Chief Merchandising Officer Cara Sylvester cited progress with the center-store grocery overhaul, including more fresh produce, new focal points for seasonal offerings and added space for growth categories like functional coffee: "The response has been really encouraging."

Chief Operating Officer Lisa Roath and CFO Jim Lee echoed the refrain, pointing to traffic gains and strategy traction as "encouraging" proof points.

Back-to-school sales including back-to-college are showing strength so far, Sylvester added during the Q&A. "So, encouraged. We've got a few big weeks ahead of us. But we're encouraged by what we're seeing so far."

Earnings-call word choice is rarely accidental-whether it's Bank of America CEO Brian Moynihan quietly sliding obscure SAT words into scripts or retail leaders sending signals to anyone who's listening.

TJX Cos. CEO Ernie Herrman took a seemingly different rhetorical tack on his company's earnings call Wednesday by uttering "self-inflicted" twice and invoking an "execution issue" five times.

But the intended takeaway was clear. Lower-than-expected sales at Marshalls and T.J. Maxx didn't reflect an uncontrollable macroeconomic slump or inherent brand weakness, but an operational misstep management can fix.

"We could have executed our store mix better, and by that I mean we could have been sharper on having the right goods in the right stores at the right time," Herrman told analysts. "We are convinced that the issues were self-inflicted and within our control, and we have made good progress working through them."

It's a lesson in framing: Own operational hiccups directly while projecting steady authority. TJX executives remain plenty bullish on the back half of the year-using "confident" or "confidence" 13 times.

More retail: Walmart this morning reported its smallest sales gain in more than six years as some Americans continue to spend cautiously-especially when shopping at the retailer's physical stores.

Malls' New Toys

Here's one more ingredient in the reversal of fortune for some malls: claw machines.

Upgraded versions, trimmed with neon lights and set to actually let people win once in a while, are bringing life to malls in cities and suburbs across the U.S., Lily Belle Poling reports for The Wall Street Journal this morning.

They're stocked with luxe plush toys, Hermès bags, fresh vegetables and even sourdough starter. They capitalize on collectible culture. They're cheaper than a concert ticket.

And they facilitate the ambient sociability that gives bricks-and-mortar a chance against e-commerce.

Mall of America in Bloomington, Minn., operates a claw-machine arcade with more than 100 units, plus bubble tea and Korean shaved ice.

"Someone can buy that collectible online, but they can't recreate that excitement of playing the game or the anticipation of the huddle cheering when someone finally does win," said Alison Krueger, a leasing manager at the mall.

The Magic Number

Cities and towns that Amazon says its Prime Air drone delivery service will cover by the end of the year, including metro Chicago, Atlanta, Cleveland, Syracuse, N.Y., and Boise, Idaho. Prime Air currently delivers a selection of products in 11 metro areas from Detroit to Phoenix.

What I'm Watching

The line between targeted personalization and regulatory risk is shrinking for brand strategists.

The FTC warned businesses that using detailed data on individuals to alter price tags requires upfront disclosure, Dave Michaels reports for The Wall Street Journal.

Whether it's a delivery app raising prices based on personal habits or a ride-share service charging more knowing that a rider doesn't have a competitor's app, conspicuous disclosure is now the mandate, according to the FTC.

The new statement puts the Trump administration's imprint on a burgeoning movement to rein in how merchants use price-setting algorithms.

The FTC undertook a study of the practice during the Biden administration and found it could be used to set higher prices when merchants know that shoppers, such as new parents or first-time car buyers, are unfamiliar with a market.

Instacart was later revealed to have let retailers use its software to vary prices across four cities for individuals who added the same items simultaneously to their baskets.

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