MINNEAPOLIS, Feb. 26 (UPI) -- Target saw its fourth quarter earnings fall on account of the major data breach it had before Christmas, cutting its profits by 40 percent.
The data breach, which affected up to 110 million customers, saw the company's earnings drop to $521 million in the fourth quarter, down 46 percent from the same period the year before, when earnings were $961 million. Their earnings per share also dropped from $1.47 the year before to 81 cents this year.
“During the first half of the fourth quarter, our guest-focused holiday merchandising and marketing plans drove better-than-expected sales,” Gregg Steinhafel, Target’s chief executive, said in a statement. “However, results softened meaningfully following our December announcement of a data breach.”
But shareholders had little to cheer, as Target's full-year profits also dropped by 34.3 percent to $1.97 billion. This profit resulted in earnings of $3.07 per share, a sharp decline from the previous year's $4.52 per-share earnings.
Target acknowledged the data breach on Dec. 19, in which personal and payment information for 110 million customers was compromised. The data breach was not the only reason for Target's below-par performance. The lackluster performance from the 124 stores they opened in Canada added to the misery.
In its forecast for the coming months,Target was unable to forecast the cost of litigation and investigation into the data breach. The company said these additional costs will have a “material adverse effect” on earnings.
[The New York Times]