Target Corporation lowered its year end earnings forecast on Wednesday as the ailing retailer posted a 62% drop in second quarter profits.
Underwhelming sales and the continuing fallout from last year's data breach have lowered the company's year-long earnings forecast to between $3.10 to $3.30 per share from between $3.60 to $3.90. Same-store sales in the U.S. remained flat, despite an aggressive promotional campaign to lure in customers with steep price discounts. Sales in Canada, where the company has launched an ambitious expansion of stores, declined 11.4% in what the company attributed to a drop off from strong grand opening sales.
"While results from the quarter didn’t meet our expectations, we are seeing some early signs of progress as we work to improve results in the U.S. and Canada,” said John Mulligan, executive vice president and chief financial officer of Target Corporation.
Target also incurred losses of $111 million related to last year's data breach, which compromised the account information of some 40 million customers. The company expects total losses from the breach to climb to $148 million as it continues to work through a backlog of faulty payment claims.