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    Target Profits Down 16%, Sales Flat in Q1

    Data breach recovery still in full swing

    By Kyle Shamorian, Stagnito Business Information

    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.

    Responsibility Campaign

    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.

     

    By Kyle Shamorian, Stagnito Business Information
    • About Kyle Shamorian In his digital editor role, Kyle Shamorian oversees all content on progressivegrocer.com, Progressive Grocer’s online extension that features real-time daily news, exclusive content, new products, blogs, and related multimedia products. In addition to writing and editing content on a wide range of grocery industry issues, Kyle helms the Brain Food department in PG’s print edition, which spotlights shopper behavior and consumer trends in the retail industry. Before joining Progressive Grocer’s editorial team in July 2012, Kyle, a 2003 graduate of Marquette University, previously managed digital platforms for a variety of industries.

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