News

Target shows signs of turnaround

Target shows signs of turnaround

TARGET:Target, which has fired both its chief executive and the head of its Canadian operation as it tries to regain its footing, reported a 0.3 percent drop in U.S. same-store sales. Photo: Reuters

(Reuters) – Target Corp reported a 16 percent drop in quarterly profit but showed signs of progress in its efforts to rebuild customer confidence in the wake of a massive theft of payment card data in the United States and a botched expansion into Canada.

Target, which has fired both its chief executive and the head of its Canadian operation as it tries to regain its footing, reported a 0.3 percent drop in U.S. same-store sales.

Analysts polled by Consensus Metrix had expected U.S. same-store sales to fall 1.1 percent.

“Traffic was dramatically better than our late fourth-quarter trends,” the company said.

Shares of the third-largest U.S. retailer were up 0.8 percent in premarket trading on Wednesday.

Interim Chief Executive John Mulligan said the company was “pleased with this momentum” but that more needed to be done.

Mulligan, the company’s chief financial officer, replaced Gregg Steinhafel, who was ousted earlier in May after a data breach during the holiday shopping season that resulted in the theft of at least 40 million payment card numbers and 70 million other pieces of customer data.

Steinhafel had also overseen Target’s bungled push into Canada, where the company lost almost $1 billion last year after opening 124 stores in an unprecedented expansion that caused supply chain and other operational problems.

Target fired the head of its Canada operations, Tony Fisher, on Tuesday and replaced him with company veteran Mark Schindele.

The Minneapolis-based company lowered its adjusted full-year profit forecast to $3.60-$3.90 per share, from its prior forecast of $3.85-$4.15 per share.

Analysts on average were expecting full-year earnings of $3.98 per share, according to Thomson Reuters.

Net income fell to $418 million, or 66 cents per share, in the first quarter ended May 3, from $498 million or 77 cents per share, a year earlier.

Pre-tax costs related to the data breach totaled $26 million in the quarter, primarily for legal and other third party services. Including insurance proceeds, expenses were $18 million. The company incurred $61 million in pre-tax costs related to the breach in the preceding quarter.

Excluding items, the company earned 70 cents per share.

Sales rose 2.1 percent to $17.05 billion. Canadian sales were $393 million, up from $86 million in the same period last year when the company had only 24 stores.

Analysts on average were expecting earnings of 71 cents per share, on revenue of $17 billion.

Target’s shares were trading at $57.07 before the bell, after closing at $56.61 on Tuesday. Up to Tuesday’s close, the stock had lost 10.5 percent since the start of the year.

(Reporting by Siddharth Cavale in Bangalore; Editing by Ted Kerr)

Recent Headlines

in Entertainment

Today’s celebrity birthdays

tomlin

These celebrities will celebrate their birthdays on Labor Day.

in Entertainment

This weekend’s celebrity birthdays

diaz

A look at the celebrities who will be celebrating this weekend.

in Entertainment

WATCH: 10 best ‘Simpsons’ episodes

In this photo released by Fox, Homer explains why he wants to bring back the annual 4th of July fireworks display, after it's cancelled for budget reasons, in the "Yellow Badge of Cowardge" Season Finale episode of "The Simpsons," in May 2014. The full 25-year run of "The Simpsons" will arrive on cable channel FXX with a summer marathon, to be paired this fall with a digital extravaganza that could turn other TV shows yellow with envy. "I'm not going to over-promise, but I think this website will provide you with affordable health care," longtime "Simpsons" executive producer Al Jean told a TV critics' meeting Monday, July 21, 2014.

The recent marathon of all 552 episodes of "The Simpsons" inspired us to sit down and come up with our 10 favorite episodes. Enjoy!

in Music

Robert Plant urges Jimmy Page to give up Led Zeppelin reunion

2012 Kennedy Center Honorees and members of the band Led Zeppelin, from left, Jimmy Page, John Paul Jones, and Robert Plant chat on the red carpet after arriving at the Kennedy Center for the Performing Arts for the 2012 Kennedy Center Honors Performance and Gala Sunday, Dec. 2, 2012 at the State Department in Washington.

Robert Plant has urged his former Led Zeppelin bandmate Jimmy Page to end his war of words with the singer and concentrate on recording new music.

in Entertainment

Lena Dunham and Kate Mara hit by a falling sign

Lena Dunham, of HBO's "Girls," arrives at the 66th Primetime Emmy Awards held at The Nokia Theatre  in Los Angeles.

The "Girls" and "House of Cards" actresses saw stars of their own after an accident at a Venice premiere.