Target has failed to meet analyst expectations in Q2 2014 despite reporting an increase in sales within its second quarter financial report.
Target reported on Wednesday Q2 net profit of $234 million with earnings of $.37 per share, a decrease of 61.6 percent from $.96 per share a year earlier. (statement)
Excluding items left the company with earnings of $.74 per share.
On 5 August, the US retailer lowered its earnings expectations from $.85 to $1 per share to 78 cents per share.
Total sales were $17.41 billion, up 1.7 percent from Q2 2013 based on revenue of $17.17 billion.
Wall Street analysts estimated that Target would report earnings of 80 cents per share on revenue of $17.39 billion.
In Q4 2013, the Minneapolis-based retailer suffered a severe data breach which resulted in the theft of approximately 40 million credit card records belonging to customers between 27 November and 15 December.
Customer names, credit or debit card numbers, card expiration dates and card three-digit security code were compromised.
The cyberattack not only bruised customer confidence in the company, but also has hurt the firm's financial results, as Target has endured net expenses of $111 million so far from the data breach. Costs from the breach include actual and potential breach-related claims, payment card network claims, security overhauls and credit card reports for customers who may have been affected.
John Mulligan, executive vice president and chief financial officer of Target said in prepared remarks:
"While results from the quarter didn't meet our expectations, we are seeing some early signs of progress as we work to improve results in the U.S. and Canada. In the US, traffic trends continue to recover and monthly sales are improving, with July comparable sales up more than 1 percent. Better US sales have continued into August, driven by early back-to-school results. In Canada, the team is making important changes to operations and the merchandise assortment with a focus on delivering improved results by this holiday season."
In Q3 2014, Target expects adjusted EPS results of 40 to 50 cents a share, and full year adjusted EPS of $3.10 to $3.30, compared with the prior prediction of $3.60 to $3.90.
At the time of writing, Target stock dropped from $59.25 a share at market open to $58.50.