Standard & Poor's dropped Target Corp.'s debt rating by one level Friday as the Minneapolis-based company's massive data breach and sluggish performance in Canadian markets hurt fourth-quarter profits, Bloomberg News reports.
Target's rating was dropped from an "A+" to an "A" by the New York-based S&P.
According to the organization, a credit rating from S&P is an "opinion on the general creditworthiness of an obligor, or the creditworthiness of an obligor with respect to a particular debt security or other financial obligation."
Bloomberg says Target's fourth-quarter net income dropped 46 percent as the nation's second-largest discount retailer in the U.S. worked to keep customers after the data breach. A reported 40 million payment card records were stolen from Target along with 70 million other records, including customer information, during the data breach in December.
S&P says the data breach may have a "lingering effect on customer traffic at least through the first half" of Target's fiscal year – but the outlook is stable.
The drop in the S&P rating comes shortly after Target Chief Financial Officer John Mulligan testified before the U.S. Senate Committee on Commerce, Science and Transportation.
The Business Journal says Mulligan was in Washington, D.C., Wednesday to give an update on what the company is doing in response to the data breach. Mulligan said the company has accelerated the process of implementing chip-enabled credit card readers in all of its stores.
The company says 10,000 readers are in 325 Target stores already, and it expects all of its 1,800 stores to have the technology in its stores by September – six months ahead of schedule.
Bloomberg says Target shares were up 0.4 percent to $59.98 on Friday. Shares are down 5.2 percent so far this year, the news service says.