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Target Corp.'s first quarter profits decreased 16 percent from the year-ago period, in large part due to its struggling Canadian operations and the continuing recovery from the company's data breach.
The Minneapolis-based retailer posted net sales of $418 million, or 66 cents per share, down from $498 million, or 78 cents per share, in the year-ago.
CFO John Mulligan, Target's interim president and CEO, said the retailer's recent performance in both the U.S. and Canadian segments was "in line with expectations," adding that "while we are pleased with this momentum, we need to move more quickly."
"As a result," Mulligan continued, "we have made changes to our management team and are investing additional resources to drive U.S. traffic and sales, improve our Canadian operations, and advance our ongoing digital transformation. We have updated our 2014 earnings expectations to reflect the impact of these investments and believe that they position Target for accelerated profitable growth as a leading omnichannel retailer.”
Mulligan was named interim CEO earlier this month following the departure of Gregg Steinhafel. Earlier this week, Mark Schindele replaced Tony Fisher as the retailer's Canadian president, PG previously reported.
Additionally, Target's Q1 sales increased 0.2 percent to $16.7 billion, relatively flat with the $16.6 billion last year, due in part to the opening of new stores and offset by a 0.3 percent decrease in comparable-store sales. Segment earnings EBIT were $1,072 million in Q1 2014, a decrease of 13.5 percent from $1,239 million from the year-ago period.
The retailer's Canadian segment generated Q1 sales of $393 million, compared with $86 million in Q1 of 2013, upon the openings of the segment's first 24 stores. EBIT was $211 million in Q1 2014, compared with $205 million in 2013.
In other Target news, the retailer has recently launched a first-of-its-kind corporate responsibility campaign, in an effort to better communicate its commitment in the areas of education, responsible sourcing, education and the environment, among other issues. As part of this commitment, each year the company donates 5 percent of its profits to communities, which comes to more than $4 million each week. More information is available here.
Target operates 1,916 stores, 1,789 in the United States and 127 in Canada.