Founded in 1902, the Minneapolis Company Target (NYSE:TGT) is the second largest retailing store. In 2013, however, this popular company had gone through the biggest data breach ever in its history. Now, it’s been months since Target (NYSE:TGT)’s ‘famous’ data breach but its effects seem endless. The breach not only cost the store its customer’s trust, but also affected its sales results forcing the company to get ready for disconcerting results in the second quarter. No doubt it is very disappointing for 40 million people to see their cards exposed to malware. The shareholders, earlier, had already faced a loss of $148 million, a loss of 11 cent/share in Q2. It appears that these effects are extending because an official earning report released recently, contains some more unsatisfied results.
The company thinks it’s better to have low expectations from yearly earnings because of the residual results of the data breach. Target (NYSE:TGT)’s Wednesday’s report showed that its sales for the second quarter were $17.4 billion. This figure marked an increase by 1.7% from last year’s same quarter. This increase matched the predictions made by Wall Street.
According to the report the quarter’s net income was $234 million; the earnings were 37 cents/share but as the analysts and Target (NYSE:TGT) itself had predicted, there was a
In a statement made on Wednesday, Target (NYSE:TGT)’s CFO and executive Vice President John Mulligan believes that even though the results weren’t in line with what the store was expecting, but it shows that Target (NYSE:TGT) is on its way to improvement both in the United States and Canada. He stated that July and August sales have shown promise and given hope that they are reclaiming their lost buyers. The comparable sales in July saw an encouraging increase by 1% and August sales in the U.S. are also improving. Whereas in Canada, Target (NYSE:TGT) sales have taken a jump and increased up to $449 million that is an improvement by 63% increase. This brings good news for Target (NYSE:TGT) even though the same-store sales took a dip by 11%, which was mainly due to the sales inflation back in 2013 from grand opening sales. This gradual but sure progress has only been possible by bringing on a few changes to their merchandise and methods. But their retail stores in the U.S. have shown flat comparable-store sales for the quarter.
Target (NYSE:TGT) foresees a very good improvement in its sales from now on. Excluding the overheads of the data breach they had to suffer for a long time, they assume Q3 earning results to be 40-50 cents/share. Target has successfully achieved $3.60-$3.90/share before but the loss caused by data breach can’t be ignored. They still expect yearly earnings to be $3.10-$3.30/share. Results can be increased if a single time data breach charge is included e.g. 13 cents/share can bring a 48 cents higher result.
Despite all the positive tone within the store the stock market did not look that good for Target (NYSE:TGT) on Wednesday. The stock was still down by 2% whereas the year-to-date fall is by 6%.
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