Tallahassee Journal

Target reports Q4 loss on Canada closings

Target reports Q4 loss on Canada closings

Target shoppers delivered strong sales for the retailer in the fourth quarter but the company’s earnings fell as it prepares to dissolve its business in Canada. Target lost $2.6 billion in the quarter ended Jan. 31, or $4.10 a share due to the impact of closings stores in Canada. That’s compared to a $520 million gain in the same quarter of 2013. Adjusted earnings, excluding costs from discontinued operations, were $1.50 a share, still beating analyst expectations for $1.46 a share.130108032717-target-store-monster

The retailer announced in January that it would close its 133 stores in Canada after first opening in the country in 2013. The business lost more than $2 billion in that time as Target mismanaged the expansion and failed to entice Canadian shoppers, with shelves often unstocked and prices inconsistent. Target shares are up 0.17% in early trading.

Sales were up 4.1% to $21.8 billion, from $20.9 billion in the year-ago quarter as store traffic increased and Target pushed more shoppers through digital channels. Traffic was up 3.2% and Chief Financial Officer John Mulligan said on a call with media that digital shoppers also shop more in stores. Same-store sales, which excludes store openings and closings, increased 3.8%. Sales from digital channels contributed 0.9 percentage points to comparable sales.

Target has been investing significantly in digital experiences, apps and seamless shopping between stores and online, like being able to buy online and pick up in store. It also announced earlier this week that it would give free shipping on orders of $25 or more year-round. During the holidays, the chain offered free shipping on all orders. Target reported sales for the year increased 1.9% to $72.6 billion from $71.3 billion last year. The company also said that it incurred expenses of $145 million last year related to the data breach that occurred during the fourth quarter of 2013. The cost was $191 million, offset by a $46 million insurance receivable. The costs are primarily in legal fees, Mulligan said.