Target lowers forecast
NEW YORK -- Target has lowered its second-quarter forecast because of costs related to a massive data breach and the repayment of debt.
The Minneapolis-based retailer also said Tuesday it expects sales to be flat at established locations in the U.S., as "guests continue to spend cautiously and focus on value" and promotional discounts are expected to hurt profit margins.
Sales are expected to be "somewhat softer" at Target's stores in Canada as well.
Its shares fell more than three per cent to US$58.39 in pre-market trading.
Target Corp. has been reeling since it announced in December hackers stole millions of customers' credit- and debit-card records.
The theft hurt the chain's reputation and profits and spawned dozens of legal actions. Target is facing troubles on a number of other fronts as well, including the perception its prices are higher than those at WalMart.
The company's expansion into Canada, its first foray outside the U.S., has also been a disappointment.
Analysts have said Target botched its Canadian expansion by moving too aggressively.
Banks' plans a failure
WASHINGTON -- Federal regulators have told the biggest banks in the U.S. their plans for unwinding their operations in case of failure are inadequate to prevent the sort of financial disaster that struck in 2008 and led to a massive government bailout.
The Federal Reserve and the Federal Deposit Insurance Corp. on Tuesday criticized as "not credible" the so-called "living wills" the 11 largest banks were required to submit under the 2010 law overhauling financial regulation. The banks, with US$50 billion or more in assets, include Bank of America, JPMorgan Chase, Citigroup and Morgan Stanley.
The regulators said the banks' plans make unrealistic assumptions about likely developments in case of failure. The regulators gave the banks until July 2015 to come up with improved plans or face possible stricter regulation.
The plans "demonstrate little ability to cope adequately with failure without some form of government support. The economy would almost surely go into crisis," Thomas Hoenig, the FDIC's vice-chairman, said in a statement.
The "living wills" plans are part of the effort to avoid another taxpayer bailout of Wall Street banks in a crisis and to end the marketplace perception the government would step in and rescue them.
-- The Associated Press