Target Says Sales Starting to Recover Following Security Breach

NEW YORK (TheStreet) -- Sales are starting to recover at Target  (TGT) after a massive security breach over the holiday season potentially affected up to 110 million customers, the retail chain said on Wednesday.

"While we can't yet assess the full impact of this crime ... We are pleased that sales have started to recover" following the breach, CEO Gregg Steinhafel said on this morning's conference call.

Still, it will be some time before customers fully start coming back to shop.

The data breach has "shaken their confidence," Steinhafel said.

Target is working to rebuild customer trust. The company said it plans to invest in REDcard promotions and other strategies to bring guests back into the store.

Target is also looking to spend roughly $100 million to invest in Target-branded chip-enabled credit cards.

The company said it expects first-quarter sales comps to be flat to down 2%.

So far, February comparable-store sales are "running in that range, ahead of our forecast," Chief Financial Officer John Mulligan said during the company's conference call. Target's comps for the first quarter of last year fell 0.6%.

For the current quarter, management said it expects adjusted earnings of between 60 cents and 75 cents a share and full-year earnings of $3.85 to $4.15 a share. Analysts surveyed by Thomson Reuters forecast 85 cents and $4.15 a share, respectively.

Shares of Target jumped 7.4% to $60.69 following the discount retail chain's better-than-expected earnings report on Wednesday.

Over the three months to Feb. 1, the retailer earned $520 million, or 81 cents a share, down from $961 million, or $1.47 a share, in the year-ago quarter. Analysts had expected 79 cents a share, according to Yahoo! Finance.

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