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MINNEAPOLIS — Target Corp. said on Tuesday that its second quarter financial results are expected to include gross expenses of $148 million, partially offset by a $38 million insurance receivable, related to the December 2013 data breach.
Target Corp. said on Tuesday that its second quarter financial results are expected to include gross expenses of $148 million, partially offset by a $38 million insurance receivable, related to the December 2013 data breach.
"Since the data breach last December, we have been focused on providing clarity on the company’s estimated financial exposure to breach-related claims," said chief financial officer John Mulligan, who is also interim president and chief executive officer. "With the benefit of additional information, we believe that today is an appropriate time to provide greater clarity on this topic.
"While the environment in both the U.S. and Canada continues to be challenging, and results aren’t yet where they need to be, we are making progress in our efforts to drive U.S. traffic and sales, improve our Canadian operations and advance Target’s digital transformation," said Mulligan. "With last week’s announcement that the board has chosen Brian Cornell as Target’s next chairman and CEO, we are excited to welcome Brian to the team and committed to working together to accelerate Target’s transformation and become a leading omnichannel retailer."
Expenses for the second quarter include an increase to the accrual for estimated probable losses for what the company believes to be the vast majority of actual and potential breach-related claims, including claims by payment card networks.
"Given the varying stages of claims and related proceedings, and the inherent uncertainty surrounding them, the company’s estimates involve significant judgment and are based on currently available information, historical precedents and an assessment of the validity of certain claims," says a Target statement. "These estimates may change as new information becomes available and, although the company does not believe it is probable, it is reasonably possible that the company may incur a material loss in excess of the amount accrued. The company is unable to estimate the amount of such reasonably possible excess loss exposure at this time."
The company now expects its adjusted earnings per share for the second quarter of 2014 to be within a range of around $0.78, compared with prior guidance of $0.85 to $1.00 per share.
