Minneapolis, MN, United States (4E) – Target reported a 16 percent drop in first-quarter profit, short of analysts’ projections, as the retailer was hit from costs of last year’s data breach and losses in its Canadian operation, according to a company statement released Wednesday.
The company lowered its full year guidance and said it could not estimate future costs linked to the data breach.
Stripping off expenses related to the breach and some items, Target’s earnings were at 70 cents a share on an adjusted basis, 1 cent below the consensus estimate by analysts surveyed by FactSet.
Net earnings were $418mn, or 66 cents per share, from $498mn, or 77 cents per share, in the year-ago period.
Sales stood at around $17bn, higher by 2.1 percent from a year ago. The company said that the data breach during last year’s holiday season cost the retailer a net $18mn in the first quarter, and total expenses reached $26mn offset by an insurance claim of $8mn.
Target lowered its estimated earnings per share guidance for 2014 to between $3.60 and $3.90 versus its previous guidance of $3.85 to $4.15.
Earnings from U.S. stores fell 13.5 percent to $1.07mn from around $1.24mn in 2013.