Table of Contents
MINNEAPOLIS — Target Corp. said profits fell 16% in its fiscal first quarter as sales at U.S. stores open at least a year declined by 0.3%. The company sharply lowered guidance for its full-year financial results.
Target Corp. said profits fell 16% in its fiscal first quarter as sales at U.S. stores open at least a year declined by 0.3%. The company sharply lowered guidance for its full-year financial results.
John Mulligan, Target’s interim president and chief executive officer, said in a statement that the company was pleased with the momentum in its recovery from a data breach and the bumpy launch of its Canadian operations, but that it needs to move more quickly.
"As a result, we have made changes to our management team and we are investing additional resources to drive U.S. traffic and sales, improve our Canadian operations and advance our ongoing digital transformation," Mulligan said.
Mulligan took over May 5 after the sudden resignation of president and CEO Gregg Steinhafel, who was forced out as the retailer looks to put its troubles in the past. Target is looking hire a leader who can restore consumers’ confidence after hackers late last year stole financial and personal data on millions of Target customers.
This week Target announced a fresh round of management changes, including the firing of the head of its Canadian operations.
Target posted a net profit of $418 million, or 66 cents a share, in the period ended May 3. Adjusted to exclude the effect of costs related to the data breach, earnings were 70 cents a share, a shade below Wall Street’s diminished expectations.
Sales rose 2.1% to $17 billion. Colder-than-usual winter weather suppressed sales in the period, the company said, as did expiration in January of a 2% cut in payroll taxes that was enacted in 2011 and extended in 2012 to pump additional discretionary spending into the economy.
Target lowered its adjusted full-year profit forecast to $3.60 to $3.90 a share, from $3.85 to $4.15 a share. "At this time, the company is unable to estimate future expenses related to the data breach that occurred in the fourth quarter of 2013," the company said.
Target also announced that it had returned $272 million, representing 65% of profits, to shareholders in the first quarter in the form of dividends.
