Target's profits down 46 percent, but some experts think that's not as bad as it sounds

Target's profits down 46 percent, but some experts think that's not as bad as it sounds

UPDATE: Turns out Target's shrinking profits were actually a negative trend and just over a year later, Target has a new CEO, is cutting thousands of corporate jobs, and giving ex-CEO Gregg Steinhafel $61 million.

The headlines suggest doom and gloom -- "Target Earnings Slammed by Data Breach," "Target warns data breach could hurt future profit," "Target Profits Declines on Data Breach Fallout," and so forth.

RELATED: Target lays off 475 workers, won't fill 700 open positions

But dig a little deeper, and things aren't as bad as they might seem upon first blush, some financial experts say.

Yes, Target's fourth-quarter profit of $520 million was down 46 percent from 2012, but as Bloomberg notes, that's actually better than most financial analysts figured headed into this morning's announcement.

The results, bad as they might seem in a vacuum, signal that Target is "regaining customer loyalty after a data breach affected tens of millions of shoppers at the peak of the holiday season," Bloomberg's Renee Dudley writes.

Accounting for an insurance payment, Target's earnings report indicates the massive data breach that was first disclosed about a week before Christmas cost the company $17 million during the fourth quarter. That doesn't sound too bad relative to Target's profits, but the company acknowledges that the breach and measures it's taking to make sure something like it doesn't happen again could have a lingering impact.

SEE ALSO: Target Breach: Top 10 tweets

"At this time, the Company is not able to estimate future expenses related to the data breach," the earnings report says. "These costs may have a material adverse effect on Target's results of operations in first quarter and full-year 2014 and future periods."

In the report, Target CEO Gregg Steinhafel says his company's fourth quarter was looking up before the breach and vows to do everything possible to make Target so enticing that consumers essentially have no choice but to shop there.

"During the first half of the fourth quarter, our guest-focused holiday merchandising and marketing plans drove better-than-expected sales. However, results softened meaningfully following our December announcement of a data breach," Steinhafel said. "As we plan for the new fiscal year, we will continue to work tirelessly to win back the confidence of our guests and deliver irresistible merchandise and offers, and we are encouraged that sales trends have improved in recent weeks."

-- Follow Aaron Rupar on Twitter at @atrupar. Got a tip? Drop him a line at [email protected]

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