Target (TGT -0.70%) today reported fourth-quarter earnings that were hurt by a massive data breach over the all-important holiday shopping season. Target's quarterly profit declined 45% to $0.81 per share, down from $1.47 in the year-ago period. The big-box retailer posted fourth-quarter revenue of $21.5 billion, marking a 5% decline from sales of $22.7 billion in 2012. Moreover, Target's same-store sales declined 2.5% in the quarter, as fewer people shopped at its locations in the weeks following the security incident..
This was the retailer's first earnings announcement since hackers left tens of millions of Target customers vulnerable to credit card fraud. Target said the data theft cost the company $17 million in the fourth quarter, as the company racked up expenses related to items including increasing staffing at call centers, credit-monitoring services, and the investigationof the breach. Target said $ 61 million of total expenses were offset by the recognition of a $44 million insurance receivable. Target said expenses may include payments to card networks to cover losses and expenses for reissuing cards, lawsuits, government investigations, and enforcement proceedings.
To help regain the trust of customers, Target is offering its shoppers free credit card monitoring for a year. Target said it could incur additional costs related to the incident in the coming quarters, though the company wasn't able to accurately estimate those future charges.
Shares of Target were moving higher in early trading, with the stock priced at $58.28 a share as of 9:30 a.m. EST.
-- Material from The Associated Press was used in this report.
