Target's net profit almost halved in the holiday quarter as the third-largest U.S. retailer dealt with the fallout of a massive data breach and warned that costs related to the event could hurt future profits.
Target incurred $61 million in expenses related to the breach during the quarter, but those costs were offset by a $44 million insurance payment, bringing down the impact to $17 million. The retailer said it has not been able to estimate future expenses related to the data breach.
After the earnings announcement, the retail giant's shares rose in premarket trading. (Click here for the latest quote for the company.)
Wednesday marks the first time Target faces Wall Street since the breach, which led to the theft of about 40 million credit and debit card records and 70 million other records with information such as addresses and phone numbers of shoppers compromised.
(Read more: Target CEO'still shaken' by the data breach)
"These costs may have a material adverse effect on Target's results" in the current quarter, the year and future periods, it warned investors on Wednesday.
Net earnings fell to $520 million, or 81 cents a share in the three months that ended on Feb 1, from $961 million, or $1.47 a share, a year earlier.