Data breach to cost Target $138 million in Q2, hits earnings
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.”
CVS beats net income estimates in Q2
Woonsocket, R.I. – CVS Caremark Inc. beat Wall Street estimates with net income of $1.2 billion in the second quarter of fiscal 2014, up 11% from $1.1 billion in year-ago period. CVS cited increased generic drug dispensing rates and favorable Medicaid reimbursement from the state of California as aiding net income results.
Net revenues also grew 11% to $34.6 billion, from $31.2 billion. Increased pharmacy services sales and revenue from the new Specialty Connect program for holders of specialty prescriptions boosted net revenue totals. Same-store sales grew 3.3%, negatively impacted by the elimination of tobacco sales but aided by a shift in the Easter holiday.
Walgreens same-store sales rise 5.2% in July
Deerfield, Ill. – Same-store sales at Walgreen Co. rose 5.2% in July. Walgreens had July sales of $6.39 billion, an increase of 6.1% from $6.02 billion for the same month in fiscal 2013.
Total front-end sales increased 1.4% in July compared with the same month in fiscal 2013, while same-store front-end sales increased 1.1%. Same-store customer traffic decreased 2.6% while basket size increased 3.7%.