Target breach hit more shoppers while slowing U.S. sales

Target Corp., the second-largest U.S. discount retailer, cut its U.S. unit’s fourth-quarter forecast and said the recent security breach affected more people and more information than previously thought. More

To continue reading this article, please do one of the following.



retail

Target breach hit more shoppers while slowing U.S. sales

BLOOMBERG NEWS PHOTO/PATRICK T. FALLON
NEARLY TWICE AS MANY PEOPLE than initially thought were affected by the data breach at Target stores in the United States. Names, home and email addresses for as many as 70 million people were taken during the holiday shopping season.
Posted 1/10/14

NEW YORK - Target Corp., the second-largest U.S. discount retailer, cut its U.S. unit’s fourth-quarter forecast and said the recent security breach affected more people and more information than previously thought.

Names, home and email addresses for as many as 70 million people were taken, the Minneapolis-based company said Friday in a statement. Target previously said credit- and debit-card data of 40 million accounts was stolen. It’s likely that the two groups overlap, though it’s unclear to what extent, Molly Snyder, a spokeswoman, said Friday in an interview.

Target is trying to keep customers’ loyalty after their card data was stolen while they made purchases in stores during the holidays, retailers’ most important season of the year and a time when many shoppers already were showing restraint. The company said it couldn’t estimate the breakdown’s costs and they may have a material adverse effect on fourth-quarter results.

“What makes it more difficult is business hasn’t been good, you start gaining a little traction, then boom, this happens,” Brian Yarbrough, a St. Louis-based analyst at Edward Jones & Co., said in a phone interview.

Yarbrough said the effects of the breach won’t last long term and recommends buying the shares.

Target dropped 1 percent to $62.68 at 10:20 a.m. on the New York Stock Exchange. The shares rose 6.9 percent last year, compared with a 30 percent increase for the Standard & Poor’s 500 Index.

‘Meaningfully weaker’

Sales at the U.S. unit were “meaningfully weaker” after the data theft was disclosed, the company said. U.S. same-store sales will fall about 2.5 percent in the quarter through January, compared with an earlier projection they would be little changed. Adjusted earnings per share will be $1.20 to $1.30 for the division, down from a previous estimate of at least $1.50.

The company also said it would close eight U.S. stores on May 3. The locations affected are in Florida, Georgia, Illinois, Nevada, Ohio and Tennessee. Employees will be offered transfers to nearby stores. Each store has about 70 to 125 workers, and while the “vast majority” of workers choose to take positions, Target doesn’t know how many will do so, Snyder said.

The breach occurred when a computer virus infected Target’s point-of-sale terminals where shoppers swipe a credit or debit card to make a purchase, a person familiar with the matter said last month. The person asked not to be identified because the investigation is private.

The retailer is already facing almost two dozen lawsuits, mostly from customers accusing the company of failing to safeguard their information.

The U.S. Secret Service said it was investigating the breach, along with two states’ attorneys general.

Calendar
PBN Hosted
Events

See the List of 2014 Winners. And save the date - September 10th - for the 3rd Annual Fastest Growing & Innovative Companies program at Rosecliff Mansion in Newport.
  • Healthiest Employers
    Thank you to all who attended the 3rd Annual Healthiest Employers Luncheon today ...
Advertisement
Purchase Data
Book of Lists
Lists
Book of Lists cover
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  •  
  • Purchase an e-File of the entire Book of Lists database
  •  
  • Purchase a printed copy of the Book of Lists
  •  
    National
    Local
    Latest News
    Advertisement