Target Q4 boosted by online, digital channels; data breach tallied to $162 million

The discounter beat estimates for the quarter, despite the $5.1 billion pre-tax loss related to the breakdown of its Canadian operations.

Target reported fourth quarter earnings on Wednesday, and the results were stronger than expected.

The Minneapolis-based discounter posted non-GAAP earnings per share of $1.50, an increase of 14 percent year-over-year, on revenue of $21.8 billion (statement).

But excluding adjustments, Target reported a loss of $5.59 per share; a hit the company says stems from the $5.1 billion pre-tax loss related to the breakdown of its Canadian operations.

Wall Street was looking for $1.46 per share on revenue of $21.6 billion.

Target also disclosed figures related to the massive security breach in 2013 that compromised the data of nearly 70 million shoppers. For 2014, the retailer experienced full-year net expense of $145 million. With the addition of $17 million in expenses for Q4 2013, the total impact of the breach reaches $162 million.

But while the high costs of the data breach and Target's Canadian retreat bogged down the numbers somewhat, the retailer's online sales were definitely a high point.

Target's online sales accounted for 0.9 percent of its total growth, an increase of 0.5 percent year-over-year. The company recently cut its free shipping eligibility for online orders to $25, less than the minimum required by its main discounter rivals.

As for Target's same-store sales, those also beat previous guidance of 3 percent, landing at 3.8 percent. That's a drastic improvement to the 2.5 percent drop Target saw during the fourth quarter of the previous year due to the data breach.

"It's clear that 2014 was a year of transition," Target CEO Brian Cornell said during a conference call with analysts and reporters. "A year ago we were in recovery mode, working to repair guest relationships impacted form the data breach. Fast forward to today ... the data breach is fully behind us."

In first quarter 2015, Target expects EPS between 95 cents and $1.05. The company will provide additional guidance during an investor meeting March 3.

"Over the next few years we are looking for opportunities outside our stores," Cornell said. "We believe meaningful opportunities exist."

Target is also looking for cost cuts to fund those investments -- which could translate into job cuts. But details on exactly what those opportunities and cost cuts are will have to wait until next week as well.

"We will paint the whole picture for you next week," Target CFO John Mulligan said during the call. "We feel that we can pay for those investments with cost takeouts."

Previously: Target's data breach tab mostly covered by insurance so far | How hackers stole millions of credit card records from Target | Target hackers hit air-conditioning firm first as a way in | Target's data breach: It gets worse | Many times bitten, retailers scramble to prevent another Target-like meltdown | Visa CEO: We need better security, EMV chips, tokens