Minneapolis-based Target Corporation announced Wednesday that its first quarter profits fell 16 percent to $418 million, compared to the same quarter last year. The company also predicts second-quarter earnings will dip below expectations.
The report comes in the wake of the massive data breach that hit Target during the 2013 holiday shopping season and amid losses from its Canadian expansion.
In a company statement John Mulligan, Target’s interim president CEO and CFO, said, first quarter performance in both the U.S. and Canadian segments were in line with expectations reflecting recovery from the data breach, but noted he would like to see more improvement. “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,” he stated.
Target’s sales in the U.S. grew just 0.2% to $16.7 billion. Sales at stores open more than 13 months dipped 0.3%. The amount of transactions declined, but the average transaction amounts increased as consumers shopped for items like electronics.