Target lowers guidance for Canadian stores due to poor sales, expansion costs
January 10, 2014 - 12:47 PM
TORONTO - Target Corp. says poor sales at its Canadian stores will have a bigger impact on its fourth-quarter results than it originally expected.
The discount retailer says it has slashed prices to clear out unsold merchandise and that's hurting gross margins.
It now anticipates a loss of about 45 cents US per share for the quarter, more than the 22 US cents to 32 US cents loss it had previously projected.
Target operates 124 locations across Canada following a hyped launch last year.
But the chic chain has since admitted that its highly-anticipated foray north of the border was a rocky, as it faced high expansion costs and worse-than-expected sales.
Some common complaints have ranged from near-empty shelves in Target Canada stores to prices that were notably higher than its U.S. locations.
For its entire operation, the retail giant lowered its fourth-quarter adjusted earnings guidance to a range of US$1.20 to US$1.30 per share, down from US$1.50 to US$1.60 per share.
Analysts surveyed by FactSet expect earnings of US$1.24 per share.
The Minneapolis company also revealed that a data breach at its stores pre-Christmas may have affected the personal and credit information of 70 million customers, not the 40 million it had originally estimated.
Target says that names, credit and debit card numbers, card expiration dates, debit-card PINs and the embedded code on the magnetic strip on the back of cards had been stolen during the breach.
The company is set to report its fourth-quarter and full-year earnings on Feb. 26.
News from © The Canadian Press, 2014