Target Hack's Price: 46% Drop in Profit

Q4 sales dropped due to scared customers
By Newser Editors and Wire Services
Posted Feb 26, 2014 8:41 AM CST
In this Dec. 19, 2013, file photo, a passer-by walks near an entrance to a Target retail store in Watertown, Mass.   (AP Photo/Steven Senne, File)

(Newser) – Target's massive data breach wasn't just a PR disaster for the company, it was a financial one, too. Target announced its earnings today, and blamed the breach for knocking its Q4 profit down 46%. It also said that its sales fell 5.3%, as the breach scared off customers. The nation's second-largest discounter said it earned $520 million for the three months that ended Feb. 1, down from a profit of $961 million a year earlier.

The breach resulted in $17 million of net expenses in the fourth quarter, Target said, with $61 million of total expenses partially offset by a $44 million insurance receivable. "We will continue to work tirelessly to win back the confidence of our guests," the company's CEO said. "We are encouraged that sales trends have improved in recent weeks." Still, the company offered a profit outlook below Wall Street expectations: earnings per share of between $3.85 and $4.15 for the full year; analysts had expected $4.21. (Read more Target stories.)

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