Target Data-Breach Expenses Expected to Total $148 Million in Q2
MINNEAPOLIS-In a preliminary statement about its second-quarter financial results, Target said it expects those results to include gross expenses of $148 million related to the December 2013 breach of data about shoppers' payment cards and other information.
These costs will be partially offset by a $38 million insurance receivable, also related to the data breach, Target said. In addition, the company has incurred a pretax loss of $285 million from the retirement of $725 million of its long-term debt.
Second-quarter same-store sales in Target's U.S. segment are expected to be essentially flat, with lower-than-expected margin on its earnings before interest, taxes, depreciation and amortization due to promotional markdowns during the quarter. The Canadian segment is projected to turn in softer-than-expected sales, and its results will be affected by continued investments to clear excess inventory, Target said.
John Mulligan, chief financial officer and interim CEO until Brian Cornell assumes the post on Aug. 12, said, "While the environment in both the U.S. and Canada continues to be challenging, and results aren't yet where they need to be, we are making progress in our efforts to drive U.S. traffic and sales, improve our Canadian operations and advance Target's digital transformation."
Target will release its full financial report on the second quarter on Aug. 20.