Data breach costs still unknown: Target CEO

Target interim CEO addresses data breach costs
Target interim CEO addresses data breach costs

Target is still not able to estimate the cost of the data breach that affected tens of millions of customer's credit cards, and may not know until late in the second quarter or early third quarter, interim CEO John Mulligan told CNBC's "Street Signs" on Wednesday.

"We're in a place when it comes to the data breach where we don't have visibility yet to potential third-party liabilities and operating expenses they've incurred," said Mulligan, also the company's chief financial officer.

On Wednesday, the nation's third-largest retailer reported first-quarter earnings excluding items of 70 cents per share, down from 82 cents per share in the year-earlier period. However, revenue was better than expected, rising to $17.05 billion from $16.71 billion.

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Analysts had expected earnings of 71 cents per share on $17.01 billion in revenue, according to a consensus estimate from Thomson Reuters.

Target interim CEO: Canadian guests responding better
Target interim CEO: Canadian guests responding better

Target cited fallout from its expansion into Canada for the earnings drop, but Mulligan said there are no plans to pull out of the country.

"We are very focused on improving our operations in Canada," he said, pointing to the recent appointment of a new leadership team.

"We're not where we need to be, but we've begun to get the stores better in stock. We've also begun to see our guests respond better."

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In the U.S., Target will continue to use promotions to try to drive more traffic to its stores, but will focus on balancing out those promotions and its profit margins—something that wasn't as much of a factor immediately after the data breach.

"The first quarter we used a significant amount of promotions and our gross margin rate was down more than a full percentage point. We'll strike more of a balance as we go forward," Mulligan said.

His appointment as interim CEO followed the abrupt departure of Target's chairman and CEO, Gregg Steinhafel, earlier this month.

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However, Mulligan demurred when asked whether he would want the top job on a permanent basis.

"I will be very content to move back to my CFO role when we get the right individual to lead the company going forward."

Target's ideal CEO
Target's ideal CEO

He said whoever the new CEO is will focus on three areas: growing sales and traffic in the U.S., continuing to improve Canada and getting the company to be a "leading omnichannel retailer."

"That third one [is] probably the most important. That's where the market is going, that's where our guests are and we need to accelerate our transformation."

—By CNBC's Michelle Fox.