Target reported a 16 percent drop in first-quarter profit, but an analysis of the numbers in the first quarter earnings report by Reuters sees signs of progress for the troubled Minneapolis-based retailer.
On the positive side of the ledger, sales of $17.05 billion were above estimates, and same-store sales, a key indicator, fell by just 0.3 percent, which was better than analysts had anticipated. Although fewer shoppers visited Target stores, customers who did walk through the doors bought more, and the company said that "traffic was dramatically better than our late fourth-quarter trends."
Store traffic improved throughout February and was "relatively strong" in March despite the harsh weather that other retailers have blamed for weak sales, interim Chief Executive John Mulligan said on a call with reporters. Mulligan, the company's chief financial officer, replaced longtime President and CEO Gregg Steinhafel, who was pushed out earlier this month.
Target has been struggling in the wake of a massive theft of payment card data and a disappointing launch into the Canadian market, where the company lost almost $1 billion last year after opening 124 stores that suffered with inventory and operational problems. Target also ousted the head of its Canadian operation on Tuesday as it tries to regain its footing. The Star Tribune notes the Canadian division just missed the company’s sales target, coming in at $393 million compared to a forecast of $400 to $450 million. The newspaper added that Target indicated it incurred $26 million in expenses related to the data breach in the first quarter, about $8 million of which was expected to be covered by insurance.