What's happening:
The routine quarterly announcement of financial performance from Target Corp. will come before the stock market opens Wednesday morning. This announcement will get more than the usual attention, however, because it is the first since the Minneapolis-based retailer revealed in December that its sales system had been compromised by hackers, resulting in the exposure of financial and personal information of tens of millions of customers.
The results will cover the months of November, December and January. Like many retailers, Target ends its reporting year in January rather than December in order to provide investors with an uninterrupted view of the holiday selling season.
What has the company said about the effect of the breach on results:
On January 10, Target told investors to expect a lower profit because news of the breach, which was announced Dec. 19, resulted in fewer shoppers coming to its stores. It told investors to expect a profit in the range of $1.20 to $1.30 per share. That was down from its previous guidance for a profit of $1.50 to $1.60 a share.
Target also said lowered its forecast for another important metric: comparable sales, a measurement of revenue that involves only stores that have been open at least a year and, thus, can be compared fairly. Target said to expect a comparable sales decline of 2.5% for the quarter. Before the breach, it guided investors to expect flat comparable sales. In the August-to-October quarter, Target's comparable sales rose 0.9%.
What else is impacting Target:
Before the data breach, the big issue for Target was the same facing all major retailers -- lackluster consumer spending. The company went into the holidays expecting flat sales and told investors in mid-December it was doing a little better than expected in part due to high demand for electronics. Then came the Dec. 19 announcement of the data breach and everything changed.
