Target first quarter profits drop 16% - KMSP-TV

Target first quarter profits drop 16%

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MINNEAPOLIS (KMSP) -

Target reported a 16 percent drop in first-quarter earnings in the wake of a massive data breach and a shaky expansion into Canada.

The Minneapolis-based and third-largest U.S. retailer also reduced its annual profit outlook.

Target says it earned $418 million, or 66 cents per share, in the quarter ended May 3. That compares with $498 million, or 77 cents per share a year ago.

Revenue rose 2.1 percent to $17.1 billion. Analysts had expected earnings of 71 cents on revenue of $16.97 billion.

On Tuesday, Target just fired Tony Fisher, president of the company’s Canadian operation, and in early May, Target’s CEO Gregg Steinhafel stepped down.

CEO STEPS DOWN

On May 5, Target announced its then-CEO Gregg Steinhafel would be stepping down from his post. He will be given a severance package worth $15.9 million, according to documents filed Monday with the Securities and Exchange Commission.

Chief financial officer John Mulligan has been named interim chief executive.

Steinhafel, a 35-year Target employee at CEO since 2008, is resigning in the wake of a giant malware attack that compromised the credit and debit card information of 40 million customers. Personal information for an additional 70 million customers is also believed to have been compromised.

Mulligan, a Target employee since 1996, has been CFO for just a few years, and was the one to testify before the U.S. Senate Judiciary Committee about the breach in February -- the first time Target publicly answered questions about the attack.

In a letter to Target's Board of Directors, Steinhafel cited other challenges during his tenure, including the recession and a struggling 127-store expansion into Canada.

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