Target's profits down 46 percent, but some experts think that's not as bad as it sounds

Categories: Target
TargetHQ.jpg
The headlines suggest doom and gloom -- "Target Earnings Slammed by Data Breach," "Target warns data breach could hurt future profit," "Target Profits Declines on Data Breach Fallout," and so forth.

RELATED: Target lays off 475 workers, won't fill 700 open positions

But dig a little deeper, and things aren't as bad as they might seem upon first blush, some financial experts say.

Yes, Target's fourth-quarter profit of $520 million was down 46 percent from 2012, but as Bloomberg notes, that's actually better than most financial analysts figured headed into this morning's announcement.

The results, bad as they might seem in a vacuum, signal that Target is "regaining customer loyalty after a data breach affected tens of millions of shoppers at the peak of the holiday season," Bloomberg's Renee Dudley writes.

Accounting for an insurance payment, Target's earnings report indicates the massive data breach that was first disclosed about a week before Christmas cost the company $17 million during the fourth quarter. That doesn't sound too bad relative to Target's profits, but the company acknowledges that the breach and measures it's taking to make sure something like it doesn't happen again could have a lingering impact.

SEE ALSO: Target Breach: Top 10 tweets

"At this time, the Company is not able to estimate future expenses related to the data breach," the earnings report says. "These costs may have a material adverse effect on Target's results of operations in first quarter and full-year 2014 and future periods."

In the report, Target CEO Gregg Steinhafel says his company's fourth quarter was looking up before the breach and vows to do everything possible to make Target so enticing that consumers essentially have no choice but to shop there.

"During the first half of the fourth quarter, our guest-focused holiday merchandising and marketing plans drove better-than-expected sales. However, results softened meaningfully following our December announcement of a data breach," Steinhafel said. "As we plan for the new fiscal year, we will continue to work tirelessly to win back the confidence of our guests and deliver irresistible merchandise and offers, and we are encouraged that sales trends have improved in recent weeks."

-- Follow Aaron Rupar on Twitter at @atrupar. Got a tip? Drop him a line at arupar@citypages.com.


Sponsor Content

My Voice Nation Help
22 comments
Raina Conner
Raina Conner

I LOVE Target! The retail is down because no one wants to be out in this winter. Data breaching happens at every retailer and company. It has happened at big name department stores- it's not such a big case because of the customer base. Social security, the VA and numerous other agencies have also been hit. We live in a technological world and unfortunately this is now the norm.

digitalprotocol
digitalprotocol topcommenter

please provide one example of how the data breach affected anyones wallet


all you people live in fear... ooo data breach


you can pay 20 bucks on the internet and have access to all your SSN and personal private info

Angela Stirm
Angela Stirm

Well a new plus size line was suppose to be out in early January and I have not seen one thing from it yet at my local Targets. In fact there is NOTHING for us chunky gals there. Don't get me started on not being able to find any Nate Berkus stuff. Plus my local store still has clearance stuff from the beginning of the year. I miss the days when Target had kick butt tie ins with other lesser known designers. Subversive? Erickson Beamon? Where is the fashion love? IlTarget needs to go back to what made them so popular 6-7 years ago.

Bob B Bopp
Bob B Bopp

Of course they can. The general public has a short attention span and an endless consumption habit.

Alysia Leonhardt
Alysia Leonhardt

I hope so. They provide a lot of jobs here and I don't want see those jobs lost! I do not blame Target for what happened as the same thing could have happened anywhere that I shop. I feel that those that do blame them are ignorant to the actual issue.

Freddie Lindahl
Freddie Lindahl

Yes, I love target, wished there was one in petoskey mi.!

Diann Collins
Diann Collins

Well, I'm one of the people that my debit card info was breached. Not very happy at all!!!

Shayne O'Neil
Shayne O'Neil

Just like the unemployment rate ..... Oh , it's better than it looks , smh.

Jeff Schwartz
Jeff Schwartz

Why would you shop there, targets prices are through the roof.

Ryan Siverson
Ryan Siverson

They are still my go-to when it comes to general shopping. The only thing that will push me away from shopping there would be the amount of times I'm asked "Can I help you find something?" while I am grocery shopping. I'm a guy, I'm supposed to wonder aimlessly around without a grocery list.

Karen Hermann
Karen Hermann

I have less issue with the fact that it happened than with the way they handled it.

Melanie King Ringstad
Melanie King Ringstad

Of course they can - probably the safest place to shop at this point. Go Target!

Hans Dykema
Hans Dykema

Let's hope so. Target employs lots of Minnesotans.

David Snow
David Snow

Yes they can, cause Wal-Mart is much scarier!!!!

Andrew Brand
Andrew Brand

Zach Boyce just won this thread, hands down.

Zach Boyce
Zach Boyce

Unless target is proven to be negligent, I think they did nothing wrong and people shouldn't stop shopping there. It can happen to anyone. Your best friend gets her identity stolen, you don't stop talking to her or going for drinks with her, do you?

Now Trending

Minnesota Concert Tickets

From the Vault

 

Loading...