US: Target Q4 profit hit by data breach
- Q4 net profit down 46% to US$520m
- Revenues fall 6.6% to $20.9bn
- Comparable store sales down 2.5%
A costly data breach incurred a US$17m expense for retail giant Target Corporation in the fourth quarter, but also impacted consumer confidence and traffic.
The company’s profit was significantly impacted by the theft of customer payment details, with comparable store sales also falling following the announcement in December.
That left full-year net profit down 34% to $1.971bn and revenues down 0.9% to $71.3bn, accompanied by a 0.4% decline in comps.
Meanwhile, the company’s Canadian segment reported fourth quarter sales of $623m and an EBIT loss of $329m.
“During the first half of the fourth quarter, our guest-focused holiday merchandising and marketing plans drove better-than-expected sales,” said Gregg Steinhafel, chairman, president and CEO of Target.
“However, results softened meaningfully following our December announcement of a data breach.
“As we plan for the new fiscal year, we will continue to work tirelessly to win back the confidence of our guests and deliver irresistible merchandise and offers, and we are encouraged that sales trends have improved in recent weeks.”
Target said the data breach had cost it $61m in total expenses during the fourth quarter, partially offset by insurance payments totalling $44m.
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