Target Corporation (NYSE:TGT) announced its first quarter results May 21, and the beleaguered Target Canada segment has seen its operating loss increase 3.1% to $211 million this quarter from $205 million in the same period last year.
Sales increased from $86 million in 2013’s first quarter to $393 million this year – but last year at the same time, the company only had 24 stores across the country compared with 127 today. This means the amount of sales per store decreased from almost $3.6 million to less than $3.1 million.
Gross margins also dropped significantly over the same period. In 2014’s first quarter, the Canadian chain had a gross margin rate of 18.7%, down from 38.4% last year. The company said this is due to the “continued impact of efforts to clear excess inventory,” while last year there were no clearance markdowns due to the fact that the stores had only been open a short time.
Sales in the company’s American segment also decreased, with a 0.3% drop.
“First quarter financial performance in both our U.S. and Canadian Segments was in line with expectations, reflecting the benefit of continued recovery from the data breach and early signs of improvement in our Canada operations,” said John Mulligan, interim president and CEO, CFO of Target Corporation.
“We need to move more quickly. As a result, we have made changes to our management team and are investing additional resources to drive U.S. traffic and sales, improve our Canadian operations and advance our ongoing digital transformation.”
These results come one day after Target Canada announced it had fired the president of Canadian operations, Tony Fisher.
Mulligan said the company has adjusted its earnings expectations for the remainder of 2014.
