What is in this article?:
- Target details impact of data breach
- Income, sales down
"The breach impact will diminish throughout the year as we engage in a vigorous effort to address concerns and provide irresistible content and offers to drive sales.”
— JOHN J. MULLIGAN, EVP and CFO, Target
Target Corp., Minneapolis, is committed “to making things right” following the data breach that was discovered in mid-December, Gregg W. Steinhafel, chairman, president and CEO, told financial analysts Wednesday.
To rebuild consumer confidence, Target is conducting “an end-to-end forensic investigation” into its own processes, systems and personnel to make decisions on potential security enhancements, he explained. It’s also investing more than $200 million to accelerate adoption of advanced chip-enabled technology that will include issuing its own smart-chip credit and debit cards.
In addition, the company is working with banks, trade associations, payment processors and other retailers to share and advance best practices, Steinhafel said, and it is investing $5 million in a new coalition with the Better Business Bureau, the National Cyber Security Alliance and the National Cyber Forensics and Training Alliance “to advance public education about cyber security and the dangers of consumer scams,” he noted.
John J. Mulligan, EVP and CFO, said Target is continuing to feel the impact of the data breach on consumer sentiment and on traffic, “and we believe we will continue to see muted trends in the next few months. But the breach impact will diminish throughout the year as we engage in a vigorous effort to address concerns and provide irresistible content and offers to drive sales.”
He acknowledged that comparable-store sales — which had been running positive during the fourth quarter before the breach was announced on Dec. 19 — “turned meaningfully negative” after the announcement, though they began to recover in January, “and we believe we would have seen even more improvement had there not been extreme weather across much of the country.”