Minneapolis – Target Corp. is reducing its earnings guidance for the second quarter of fiscal 2014 due to the expected $138 million financial impact of its December 2013 data breach, partially offset by $38 million in insurance. Target now expects EPS for the quarter within a range around $0.78, compared with prior guidance of $0.85 to $1 per share.
In addition to breach-related expenses, Target also cited $1 billion in debt retirement expenses and flat same-store sales caused by extensive promotional markdowns and consumer cautiousness as impacting its earnings more than previously anticipated. John Mulligan, interim president, CEO and CFO of Target, struck an optimistic tone about future performance.
“While the environment in both the U.S. and Canada continues to be challenging, and results aren’t yet where they need to be, we are making progress in our efforts to drive U.S. traffic and sales, improve our Canadian operations and advance Target’s digital transformation,” said Mulligan. “With last week’s announcement that the board has chosen Brian Cornell as Target’s next chairman and CEO, we are committed to working together to accelerate Target’s transformation and become a leading omnichannel retailer.”