Target Warns Data Breach Hits Sales, 70 Million People Affected

Target Warns Data Breach Hits Sales, 70 Million People Affected
By The original uploader was Svgalbertian at English Wikipedia [Public domain], <a href="">via Wikimedia Commons</a>

Target Corporation (NYSE:TGT) warned that its sales performance was hit by the payment card data theft and lowered its fourth quarter 2013 earnings outlook. The company said 70 million people were affected by the problem and it is offering free credit monitoring and identity theft protection for one year to all consumers who shopped at its stores in the U.S.

According to the company the data breach was partial in nature. Target Corporation (NYSE:TGT) will contact the affected individuals in cases where it has their e-mail addresses and will provide tips to protect themselves against consumer scams.

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Free credit monitoring, identity theft protection

“I know that it is frustrating for our guests to learn that this information was taken and we are truly sorry they are having to endure this. I also want our guests to know that understanding and sharing the facts related to this incident is important to me and the entire Target team,” said Gregg Steinhafel, chairman, president and CEO of Target Corporation (NYSE:TGT).

The retailer emphasized that the affected individuals will have zero liability for the cost of any illegal charges as a result of the breach. Target Corporation (NYSE:TGT) is also offering one year credit monitoring and identity theft protection to all people who shopped at its stores in the United States. The company said consumers have three months to enroll in the program.

John Mulligan, EVP & CFO of the company said, “In light of the recent data breach, our top priority is taking care of our guests and helping them feel confident in shopping at Target.”

Target fourth quarter outlook

Target Corporation (NYSE:TGT) said its fourth quarter sales were better-than-expected before the company revealed the payment card data breach last December 19. The company’s sales have slowed down since the announcement.

For the fourth quarter 2013, Target Corporation (NYSE:TGT) reduced its earnings guidance in the range of $1.20 to $1.30 per share compared with its previous estimate of about $1.50 to $1.60 per share.

The company did not provide its 2013 GAAP EPS guidance, but expects to include $0.5 to $0.10 dilution related to store closings, real estate impairments and similar discrete events; $0.45 dilution related to its Canadian segment, and $0.01 dilution due to expected reduction in beneficial interest asset related to the sale of its credit card portfolio. Its 2013 GAAP EPS may also include charges related to the data breach.

Target Corporation (NYSE:TGT) is closing eight stores in the United States after carefully evaluating the financial performance of each location.

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