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Target’s first-quarter profit fell 16% amid weaker store traffic and continued losses in Canada. But as the retailer attempts to regain its footing following last year’s wide-scale data breach during the holiday season, it received some promising news.
According to a Bloomberg National Poll, only 7% of customers plan to reduce spending at the chain over the next year. The survey, conducted May 8-11, found that Target’s decision to replace its chief executive officer this month had little effect on consumers.
What’s more, the survey results suggest that Target may be able to regain the loyalty of customers after the theft of 40 million payment-card numbers by hackers. When the incident became public in December, it hurt Target’s reputation and contributed to a drop in fourth-quarter sales. Chief Financial Officer John Mulligan was named interim CEO on May 5, replacing Gregg Steinhafel, who held himself personally accountable for the breach.
Yet despite all of this turmoil, 85% of survey respondents indicated that they plan to shop about the same amount at the chain during the next year; 7% will spend more and 7% will shop less.
About half of customers are confident that Target will be able to keep credit and debit-card information safe from here on in, according to the survey. The ouster of had little effect on shoppers, according to 84% of the 1,020 people polled. Actually, 8% said they would likely make more purchases at Target after the CEO change.
Target is now introducing new commercials that focus on philanthropy and business practices. Yet, Target has other problems. Its expansion into Canada last year hasn’t gone well at all with Target stores there recording $1 billion in losses.
Target officials said Wednesday it earned $418 million, or 66 cents a share, down from $498 million, or 78 cents a share, in the year-ago period. Excluding one-time items like costs tied to the breach, adjusted per-share earnings checked in at 70 cents.
Revenue climbed 2.1%, to $17.05 billion.
In the first quarter, Target’s U.S. sales improved ever so slightly (0.2%) to $16.7 billion, although margins narrowed amid an effort to attract customers with more promotional markdowns. Same-store sales fell 0.3% year-over-year. The number of transactions dropped 2.3%, while average transaction amounts grew 2.1%.
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