The numbers: Not great. Profits tumbled 62% to $234 million, as the big-box retailer spent nearly $150 million trying to straighten out its massive data breach from late last year. Customer transactions continued to decline, falling 1.3% of the same period last year. Sales at stores open at least a year were dead flat. Shares dropped on the news.
The takeaway: Things aren’t going to get better anytime soon. Target axed its full-year profit forecast, citing the ongoing costs of the data breach and soft results from its big push into Canada.
What’s interesting: While Target’s data breach has proved a costly error, there are more fundamental structural issues that are also pressuring the Minneapolis-based chain. Target wrote down the value of its undeveloped land by $16 million during the quarter, as the very notion of suburban big-box retailing has come into question. (Both Wal-Mart (paywall) and Target (paywall) have focused on the growth potential of their smaller-store urban formats.)