NEW YORK - Target Corp. (TGT) reported a loss in its fourth-quarter, dragged down by its move to discontinue its money-losing foray in Canada. But the discount retailer recorded strong sales as shoppers bought more items over the holiday period.
The results, which included the second consecutive increase in a key sales measure in year, come a little more than a month after the discounter announced it was giving up its business into Canada and focusing on revving up its U.S. business. The decision to close the Canadian business is the first major move by CEO Brian Cornell, who took over the helm last August and who is charged with reclaiming the retailer's image as a purveyor of cheap chic fashions.
The results also show how the company is successfully moving beyond a massive data breach disclosed a week before Christmas 2014 that compromised millions of credit and debit cards. That caused shoppers to flee for months and hurt sales and profits. That was one of the major reasons behind the abrupt departure of Gregg Steinhafel, who resigned last May.
Target is also grappling with industrywide issues. Like other retailers catering to middle income shopper, Target is contending with a customer base that has not benefited from the country's economic recovery because wages remain stagnant. Target also has seen a rapid shift among its shoppers to buy and research on their mobile devices. The discounter has been playing catch-up and revamping its apps and just lowered the threshold for free shipping.
The company said that it lost $2.6 billion, or $4.14 per share, in the three months ended Jan. 31. That compares with a profit of $520 million, or 82 cents per share a year earlier. Target's adjusted earnings were $1.50 per share.
Revenue rose 4.1 percent to $21.7 billion. Revenue at stores opened at least a year rose 3.8 percent. The measure is considered a key indicator of a retailer's health.