Target reported Wednesday that it has now spent more than $60 million on expenses related to its December data breach, and it incurred a $941 million loss from its Canadian segment during its most recent fiscal year.
 
While the Minneapolis-based retailer has been making headlines as a victim of cyber crime, its huge fourth-quarter profit drop was due largely to poor sales at its Canadian stores. The data breach caused profits to fall $0.02 per share this quarter, whereas its Canadian segment caused a drop of $0.40 per share.
 
Target announced that net earnings for the fourth quarter, which ended February 1, totaled $520 million, or $0.81 per share, down 46 percent from $961 million, or $1.47 per share, during the same period in 2013. Still, earnings per share were $0.11 higher than what analysts polled by Thomson Reuters had expected.
 
Revenue, meanwhile, totaled $21.5 billion, down 3.8 percent from $22.4 billion in the fourth quarter of 2013. Fourth-quarter revenue were above analysts’ projections of $21.4 billion.

 
Target’s same-store sales fell 2.5 percent during the fourth quarter, which it said was a result of positive sales prior to its data breach announcement and “meaningfully softer” sales afterward.
 
Shares of Target’s stock were trading up about 6.9 percent at $60.41 per share Wednesday afternoon.
 
Despite Target’s heavy losses in Canada, President and CEO Gregg Steinhafel remains confident in the expansion.
 
“We are pleased that our early-cycle Canadian stores have seen the most improvement, giving us confidence that we will continue to see continued improvement across all our Canadian stores in 2014,” Steinhafel told analysts during a Wednesday morning conference call.
 
On the year, Target’s Canadian stores generated just over $1.3 billion from its 124 locations, which, according to Chief Financial Officer John Mulligan, was well below the retailer’s plan going into the year.
 
The company said it couldn’t yet estimate the overall cost of the data breach in December, when credit and debit card data from 40 million customers and the personal information of 70 million others was compromised.
 
Target did disclose that it has already spent $61 million on expenses related to breach, amounting to $17 million after insurance companies reimbursed the retailer. Target said those expenses included costs investigating the breach, offering credit-monitoring and identity-theft protection services, increased staffing at call centers, legal services, and credit card fraud and replacement losses.
 
For the full year, the company reported earnings of $1.97 billion, down about 35 percent from 2013. Its full-year revenue totaled $72.6 billion up about 1 percent from 2013.
 
“During the first half of the fourth quarter, our guest-focused holiday merchandising and marketing plans drove better-than-expected sales. However, results softened meaningfully following our December announcement of a data breach,” Steinhafel said in a statement. “As we plan for the new fiscal year, we will continue to work tirelessly to win back the confidence of our guests and deliver irresistible merchandise and offers, and we are encouraged that sales trends have improved in recent weeks.”
 
Looking forward, Target expects its earnings to reach between $3.85 and $4.15 by the end of 2014, which would be down from $4.38 in 2013. The company said this guidance excludes any net expenses related to the data breach.