MINNEAPOLIS – The impact of the Target data security breach became clearer on Wednesday when the big retailer released its profits for the fourth quarter. The company says profit in the fourth quarter fell 46 percent on a revenue decline of 5.3 percent.
Despite the unhappy fallout from the breach of credit and debit card security at the height of the 2013 holiday shopping season, Minnesota experts see brighter days ahead for the Minneapolis based retailer.
"The short run, they have certainly been hurt, but for the long run, it looks like they are okay," said Dr. George John of the Carlson School of Management. "What I take away from the announcement is that even though their quarterly earnings were down and it depends on how much it is down based on expectations or based on last year's earnings, things like that. We can all agree it is down. The stock price, however, did not budge very much. In fact it is marginally up."
John believes that the strength of the stock price shows that Target can survive the data breach debacle. The expansion of the company into Canada is another matter, according to Dr. Dave Brennan of the University of Saint Thomas.
"Canada is really a big deal," said Brennan. "The original expectation for this year was $2 billion from Canada. It actually came in at $1.3 billion."
Target has 124 stores now open in Canada, according to the company. While the cost of the data breach was reported at $.20 a share, the cost of the Canada losses were $.40 per share, according to Target Public Relations Staff.
In general, Brennan agreed with John that Target's future seems secure.
"They will do okay, but it is going to take them awhile to resolve this and I think there will be some lingering consumer questions of whether or not they have got it solved of not," said Brennan. "I think they are a healthy company, but they have caught a cold and that cold is not going to go away any time too soon."