Boston, MA 02/26/2014 (wallstreetpr) – The security breach at Target Corporation (NYSE:TGT) is expected to have wide spread ramifications that are expected to continue for quite some time. Though the retailer reported better than expected results, it warned that the security breach has dented the company in more areas than just pride.
The Results:
The fourth quarter was a very tough one for American retailers like Target Corporation (NYSE:TGT). The weather was not helpful, even during the peak holiday season and footfalls decreased across the industry. These companies were also not helped by the uncertain economy and consumers preferred to splurge on consumer electronics rather than on other product groups. Target was able to beat profit estimates only on the back of inventory and expense management. Comparable store sales fell 2.5% in the U.S. affecting sales. The company reported adjusted earnings of $1.30 per share for the fourth quarter and $4.38 per share for the full year 2013. The company had reported earnings of $1.65 per share for the fourth quarter of last year and $4.76 per share for 2012. Target reported net earnings of $520 million for the fourth quarter and $1.97 billion for the full year.
The Security Breach And Its Ramifications:
Target Corporation (NYSE:TGT) reported in December 2013 that it had been victim to one of the largest security breach in the history of retail shopping. Identities and other important data of approximately 40 million users were reported stolen. The company has run up charges of $61 million on this account. Insurance has covered about $44 million of these charges. However the ramifications are more than just a financial hit. Consumer confidence will be severely affected and the company expects that it will take quite some time to restore it. The company is already discussing the breach with federal agencies and working out measures to protect such recurrence.
The breach should come as a wake up call to others as apart from Target Corporation (NYSE:TGT), other retailers are also at risk.
