This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Target Discloses More Customer Information Compromised, Cuts Outlook

NEW YORK (TheStreet) -- The past month has not been a good one for discount retail chain, Target (TGT - Get Report).

Turns out the security data breach last month not only compromised credit and debit cards of more than 40 million customers during three weeks of the busy shopping season, but hackers were also able to obtain "certain guest information" of up to 70 million customers, the Minneapolis-based company disclosed on Friday.

That information includes names, mailing addresses, phone numbers or email addresses, Target said.

While the data information "is partial in nature," in cases where Target has an email address, the company will attempt to contact affected guests, it said.

Must Read: Macy's Wins, American Eagle Loses in Holiday Sales

Guests will have zero liability for the cost of any fraudulent charges arising from the breach. Target is also offering one year of free credit monitoring and identity theft protection to all guests who shopped its U.S. stores. Guests will also have three months to enroll in the program, with additional details to be shared next week, it said.

"I know that it is frustrating for our guests to learn that this information was taken and we are truly sorry they are having to endure this," Target's Chairman and CEO Gregg Steinhafel said in a statement. "I also want our guests to know that understanding and sharing the facts related to this incident is important to me and the entire Target team."

Since Dec. 19, the day Target disclosed the hacking catastrophe, sales have taken a hit.

Target slashed its fourth-quarter earnings guidance. It now expects earnings from its U.S. segment specifically in the range of $1.20 to $1.30 a share, down from $1.50 to $1.60 a share. The company is anticipating fourth-quarter comparable sales growth to be flat to negative 2.5% for its U.S. operations.

Target is also closing eight U.S. stores on May 3, 2014.

The company said prior to Dec. 19 announcement, the number of customers who signed up for Target's REDcard was "in line" with year-to-date trends. However, since the announcement, "penetration growth has moderated but remains hundreds of basis points stronger than a year ago," it said.

The company said it is not able to provide guidance at this time for GAAP earnings estimates, however earnings will include 5 cents to 10 cents of dilution related to the store closings, approximately 45 cents of dilution related to the company's Canadian segment compared to prior guidance of a loss between 22 cents to 32 cents, primarily drive by gross margin impacts to clear excess inventory and 1 cent dilution related to interest from the sale of its credit card portfolio.

That doesn't include whatever charges the company takes related to the data breach. Target said it was not able to estimate the costs of the data breach at this time, but said they "may have a material adverse effect on Target's results of operations in fourth quarter 2013 and/or future periods."

Target shares were sinking 0.69% to $62.90 in Friday's trading.

Coincidentally, Goldman Sachs decided to upgrade Target to a "buy" rating and raised its 12-month price target by $1 to $72 in an earlier note on Friday.

"We model sharp acceleration in earnings momentum after a difficult 2013, and note that the stock trades at one of the lowest multiples in our coverage universe, and has responded modestly to bad news of late," Goldman analyst Matthew Fassler writes in a research note. "We look for acceleration in U.S. sales trends on a macro recovery in spending by middle income consumers; moderating losses in Canada after a problematic launch; and, increased traction online after a slow start. Moreover, the impact of a recent payment card breach, an unwelcome distraction for the firm and its customers, should prove manageable for the balance sheet and franchise."

Prior to Target's announcement Fassler had already expected the retailer to fall short of its fourth-quarter earnings guidance.

He cut his estimates for the year by 10 cents a share and now expects Target to post earnings of $3.44 for the year. Consensus estimates are looking for the retailer to post full- year earnings of $3.60 a share.

--Written by Laurie Kulikowski in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
TGT $81.34 -2.30%
AAPL $95.03 -2.90%
FB $116.73 7.20%
GOOG $691.02 -2.10%
TSLA $247.54 -1.60%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs