Target shows signs of turnaround as sales fall less than expected

Wed May 21, 2014 8:08am EDT
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May 21 (Reuters) - Target Corp reported a 16 percent drop in quarterly profit but showed signs of progress in its efforts to rebuild customer confidence in the wake of a massive theft of payment card data in the United States and a botched expansion into Canada.

Target, which has fired both its chief executive and the head of its Canadian operation as it tries to regain its footing, reported a 0.3 percent drop in U.S. same-store sales.

Analysts polled by Consensus Metrix had expected U.S. same-store sales to fall 1.1 percent.

"Traffic was dramatically better than our late fourth-quarter trends," the company said.

Shares of the third-largest U.S. retailer were up 0.8 percent in premarket trading on Wednesday.

Interim Chief Executive John Mulligan said the company was "pleased with this momentum" but that more needed to be done.

Mulligan, the company's chief financial officer, replaced Gregg Steinhafel, who was ousted earlier in May after a data breach during the holiday shopping season that resulted in the theft of at least 40 million payment card numbers and 70 million other pieces of customer data.

Steinhafel had also overseen Target's bungled push into Canada, where the company lost almost $1 billion last year after opening 124 stores in an unprecedented expansion that caused supply chain and other operational problems.

Target fired the head of its Canada operations, Tony Fisher, on Tuesday and replaced him with company veteran Mark Schindele.   Continued...