Target will release their earnings report this Wednesday, but CNN reports the clothing retailer may be a bit nervous given negative publicity following their data issues from earlier this year and the surprise resignation of former CEO Gregg Steinhafel who resigned on May 5, 2014. Experts claim the retail giant may not have done enough over the past four months to assure their shoppers that their data is safe. Target’s shares have dropped about 6% since the CEO Gregg Steinhafel’s resignation.
CEO Gregg Steinhafel may have left due to data breach
Target continues to struggle in a retail environment that is challenging for even the best competitors. For example, even Wal-Mart has struggled over the last quarter, reporting weaker result and slower store traffic than they have had in the past. Wal-Mart suggested the brutal weather in many parts of the country may have been to blame.
While Target shoppers had to contend with the weather, many were also victims of one of the largest security breaches in retail history. Although revenue has increased slightly over the last few months, earnings are down by 20%, with shares dropping from 82 cents last year to 71 cents per share this year. What experts do not know yet is how much sales and profits have been affected by the security breach.
Target argues data is safe after precautions put in place
Interim CEO John Mulligan has been quick to point out that customer’s data is safe. Despite assurances from Target executives, however, some customers have not returned to the store and have not been convinced that they can shop safely and share personal data, such as their credit and debit card data, with Target.
Target announced in December that forty million shoppers who shopped at Target between Nov. 27 and Dec. 15 may have had their credit and debit card information stolen. Up to 70 million Target customers “had information such as their name, address, phone number and e-mail address hacked in the breach.” This breach was considered one of the largest in retail history. Since the security breach Target has upgraded their point of sale systems and has offered discount to shoppers and free security services to review customer’s credit information.
Target struggles with Canadian market
Target has not just struggled with restoring confidence after the security breach and resignation of their CEO, they have also struggled to penetrate the Canadian market. Other stores have also struggled with their international move including Sears.
But Target’s not the only retailer struggling this year. As mentioned above, Wal-Mart and Kohl’s have also reported disappointing numbers. Wal-Mart has faced strong competition against Costco and Amazon. Wal-Mart’s expectations for the second quarter also remain low. To compete online they have started to invest heavily to compete in the online commerce market, and they have also had increased health care costs, which have risen more than expected. Other retailers such as Nordstrom and J.C Penney’s, however, have posted stronger-than-expected sales last week.
Latest posts by Beth (see all)
- Chapter 7 bankruptcy and why it could be a mistake - April 30, 2017
- Chapter 11 bankruptcy What do I need to know? - April 24, 2017
- Chapter 13 what if I cannot make my debt payments? - April 19, 2017