More than half a year later, Target’s nightmare is still not over. The corporation released a statement earlier this week, announcing its second quarter financial results, including an expense of $148 million for the massive breach in December 2013.
The expense will be partially offset by $38 million in insurance, however, Target also made a one billion dollar payment to retire $725 million accumulated in debt. Additionally, the corporation estimated earnings to drop to $0.78 per share from a previous forecast of $0.85 per share to the dollar in the second quarter.
“These expenses include an increase to the accrual for estimated probable loss for what the company believes to be the vast majority of actual and potential breach-related claims, including claims by payment card networks,” read the press release.
Although the expense comes in addition to the millions of dollars Target has already dished out for legal, consulting and credit monitoring services, critics claim the costs will continue to rise even more. Forrester analyst, John Kindervag commented, “$150 million in a quarter seems almost like a bargain. I don’t see how they’re getting out of this for under a billion, over time.”
“While the environment in both the U.S. and Canada continues to be challenging, and results aren’t yet where they need to be, we are making progress in our efforts to drive U.S. traffic and sales, improve our Canadian operations and advance Target’s digital transformation,” said Interim President and Chief Executive John Milligan.
However, Target’s second quarter statement revealed its recent Canadian expansion generated “softer-than-expected” sales. “[Target] is really in a difficult place. It’s going to take them a long time to build the trust of the shopper and get them to where they were prior to December 2013,” said Kindervag.
In hopes of positive change in the future, Target has also recently appointed PepsiCo’s Brian Cornell as the company’s new chairman and CEO. Cornell will fulfill his position beginning August 12.
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