January's massive data breach is still affecting Target's bottom line. In the three months ending Aug. 2, net earnings declined a whopping 61.7 percent to $234 million, with the data breach having already cost the company nearly $150 million (which was partially offset by insurance). Sales overall went up 1.7 percent, and were pretty flat in the U.S., but increased 63.1 percent in Canada, where the retailer is focusing on expansion, despite an 11 percent decrease in same-store sales there.
John Mulligan, executive vice president and chief financial officer of Target Corporation said this quarter's results failed to meet expectations, and the company lowered its forecast for full-year profits due to expenses related to the data breach, debt retirement and undeveloped U.S. land. Though, Mulligan said store traffic and transactions have begun to pick back up.
These results come just a few weeks before Target's latest designer collaboration with Joseph Altuzarra hits shelves. While these collaborations don't always have a significant impact on overall sales volumes, they do help create positive media attention, and could help get people into stores. With customer transactions down in the U.S., it sounds like that's something Target could use.