Target Net Plummets for Q4, Fiscal Year
MINNEAPOLIS-Still recovering from the effects of the breach into credit-card data of millions of its customers, Target reported a 45.9 percent drop in fourth-quarter net income, to $520 million. For its fiscal year, which ended on Feb. 1, Target's net fell 34.3 percent to $2 billion.
Net sales in the quarter totaled $21.5 billion, down 3.8 percent and including a 2.5 percent decline in U.S. same-store sales. Gregg Steinhafel, Target's chairman, president and CEO, said because of the data breach (which Target revealed on Dec. 19), "results softened meaningfully" for the rest of the quarter. Net sales for the year increased 0.9 percent to $72.6 million, including a pickup of 0.4 percent in same-store sales.
Gross margin in the quarter fell 195 basis points to 26.9 percent. Selling, general and administrative expenses were essentially flat on a dollar basis, compared to last year's quarter, but rose 107 basis points as a percentage of sales to 19.7 percent.
For fiscal 2014, Steinhafel said Target will strive to regain the consumers' confidence in the wake of the data breach. "As we plan for the new fiscal year, we will continue to work tirelessly to win back the confidence of our guests and deliver irresistible merchandise and offers, and we are encouraged that sales trends have improved in recent weeks," he said.