Target Corporation (NYSE:TGT) released its most recent quarterly earnings numbers earlier today. This report had been eagerly awaited by investors as it was the first quarterly conference call since the devastating December customer data breach.
The holiday data breach, which is still under investigation by Target and numerous law enforcement agencies, led to the theft of about 40 million credit and debit card records and 70 million other records including customer personal information.
Nov-Jan Target earnings report
The company reported profits of $520 million, or 81 cents a share, down from $1.47 in the same quarter last year, but slightly above consensus analyst estimates of 80 cents a share. Totals sales were down 5.3% quarter over quarter and revenue slipped to $21.5 billion from $22.7 billion. Total revenue at stores open at least a year also fell a disappointing 2.5%.
Data breach costs
Target Corporation (NYSE:TGT) reported $61 million in expenses related to the breach during the quarter, but the costs were minimized by a $44 million insurance payment, making it a total of just $17 million. The company also reiterated that it cannot as of yet estimate future expenses related to the data breach, expenses which might include costs connected to reissuing cards, lawsuits, governmental investigations and enforcement proceedings, legal expenses, investigative and consulting fees and capital investments.
The bad publicity surrounding the data breach was also likely responsible for Target Corporation (NYSE:TGT)’s poor holiday sales as well, given other major retailers reported increased sales for the period. “The data breach took the wind out of Target’s sails—and unfortunately sales,” said Sandy Skrovan, U.S. Research Director at Planet Retail.
Target Corporation (NYSE:TGT) shares are up more than 5%, trading at $59.34 as of 10:45 AM ET today.