Report: Target offers few details in Congressional briefing; could face $1 billion fine
Minneapolis – A Target representative reportedly offered few new details during a phone briefing with members of Congress about its holiday data breach. According to Reuters, Target official Isaac Reyes spent about an hour on the phone with members of the House of Representatives Oversight Committee on the evening of Jan. 30.
Reyes reportedly told Congress Target was informed of the data breach by the Department of Justice on Dec. 12, but would not say if the retailer knew beforehand, citing ongoing law enforcement investigation. Reyes also reportedly said Target believes it has complied with all state and federal regulations on disclosing the breach.
In addition, Jefferies analyst Daniel Binder said that Target could face between $400 million and $1.1 billion in fines due to the breach, higher than previously thought.
I still find it amazing that retailers are fined for trying to do their job. When banks are robbed do we fine the banks? When a burglary occurs at a business do we fine the business? What about the US Government. Were they fined when Edward Snowden stole information? How about this? Instead of continuing to fine retailers who are striving to protect data and provide services to their customers, the government focuses on (a) finding the perpetrators of these crimes, and (b) increases the penalties for cyber CRIMINALS to levels that would dissuade future activities. Not trying to over simplify this issue. But the people in data security at Target, Neimen, and Michael's all were trying to do the right thing and were certifying to industry practices.
Wal-Mart lowers same-store sales guidance for Q4
Bentonville, Ark. – Wal-Mart Stores, Inc. has lowered the same-stores sales guidance it previously released for fourth quarter 2013 due to factors including severe winter weather and reduced governmental assistance to consumers. Wal-Mart U.S. guidance for the fourth quarter previously projected same-store sales without fuel to be relatively Sam’s Club same-store sales without fuel to be between flat and up 2%.
However, Wal-Mart now expects both Wal-Mart and Sam’s Club same-store sales for the fourth quarter to come in slightly below previous expectations. The retailer said Wal-Mart’s results were affected by the greater than anticipated impact from the reduction in SNAP (the U.S. government Supplemental Nutrition Assistance Program) benefits on Nov. 1, as well as eight named winter storms that resulted in store closures that impacted traffic throughout the quarter. Sam’s Club same-store sales were also affected by adverse weather.
In addition, Wal-Mart says fourth quarter earnings per share will come in at or slightly below the low end of its range of $1.60 to $1.70. For the full year, Wal-Mart expects underlying earnings per share to be at or slightly below the low end of its range of $5.11 to $5.21. The retailer cited mitigating factors including store closures in Brazil and China, the cost of registering a new company in India, and restructuring Sam’s Club and closing some Sam’s Club stores in the lowering of its earnings per share guidance.
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Weak sales at Walmart, profit outlook lowered
Bad weather and a reduction in food stamps led to weaker-than-expected sales at Walmart and Sam’s Club, which combined with greater-than-expected international expense, prompted an uncharacteristic pre-announcement from the company that fourth quarter profits would be worse than expected.
Walmart said its earnings per share adjusted to exclude several non-recurring and greater-than-expected expenses related to international operations would be below the low end of a previously provided forecast of $1.60 to $1.70 and full year earnings per share would be below earlier guidance in the range of $5.11 to $5.21.
The earnings miss for the quarterly period ended Jan. 31 was attributed to a number of factors. In the U.S., same-store sales at Walmart stores and Sam’s Club are both expected to be slightly negative, according to Walmart CFO Charles Holley, compared to earlier guidance which called for comps at Walmart to be roughly flat and comps at Sam’s in the range of flat to 2%.
“Despite a holiday season that delivered positive comps, two factors contributed to lower comp sales performance for the 14-week period for Walmart U.S.,” Holley said. “First, the sales impact from the reduction in SNAP (the U.S. government Supplemental Nutrition Assistance Program) benefits that went into effect November 1 is greater than we expected. And, second, eight named winter storms resulted in store closures that impacted traffic throughout the quarter. Sam’s Club was also impacted by the weather throughout the quarter.”
The pre-announcement by Walmart is unfamiliar territory for a company accustomed to meeting or exceeding its forecasts. It also marks an inauspicious beginning to a new leadership era at the world’s largest retailer. Walmart International president and CEO Doug McMillon assumes the role of president and CEO of Wal-Mart Stores on Feb. 1 when current president and CEO Mike Duke steps down.
Walmart is scheduled to report fourth-quarter results on February 20.
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