Target data breach hits chain’s profits
Target Corp. announced on Wednesday that the theft of customers’ credit card information and other personal data during the 2013 holiday shopping season resulted in a 46 percent drop in fourth-quarter profit and a 5.3 percent dip in revenue, adding that the episode may cost the company even more.
In December, personal data from millions of Target customers was stolen by hackers who targeted the retailer’s credit card terminals. The incident scared shoppers away and caused stock value to drop about 10 percent.
The retailer, based in Minneapolis, said it earned $520 million, or 81 cents per share, for the three months that ended Feb. 1. That compares with a profit of $961 million, or $1.47 per share, a year earlier.
But investors, who sent Target shares up nearly 4 percent, or $2.19, to $58.70 in premarket trading on Wednesday, seemed soothed that sales were recovering.
"As we plan for the new fiscal year, we will continue to work tirelessly to win back the confidence of our guests ... We are encouraged that sales trends have improved in recent weeks," said Target CEO Gregg Steinhafel.
The company, noentheless, said it can't yet estimate how much more the data breach will cost.
Target said expenses may include payments to credit card networks to cover losses and expenses for reissuing cards, lawsuits, government investigations and enforcement proceedings. The costs could hurt the company's first-quarter and full-year earnings, it said.
Al Jazeera and The Associated Press