Retailer Target continues to lose money in Canada although it's starting to see an uptick in sales, the parent company's quarterly earnings report shows.

Target Corp. saw its overall profit decline by 16 per cent to $418 million or 66 cents a share, from $498 million or 78 cents a share during the same time a year ago, according to the report released Wednesday. That despite a 2.1 per cent uptick in sales from $16.7 billion to $17 billion.

Most of the new sales came from store openings, as same-store sales declined by 0.3 per cent across the chain as a whole.

'We have not lived up to our potential or expectations over the last year and a half.' - John Mulligan, interim CEO

Its Canadian division, which began opening stores in March 2013, posted sales of $393 million. That's well up from the $86 million posted in its inaugural quarter, but the company only had 24 stores at that time. Now it has more than 100.

Target posted an even wider operating loss of $211 million for the quarter, up from $205 million a year ago.

All in all, the company has lost more than $1 billion since opening up shop in Canada.

Target sacked the man in charge of its Canadian operations on Tuesday and replaced him with a company insider with more than 20 years of retail experience.

"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," interim CEO John Mulligan said.

"We have not lived up to our potential or expectations over the last year and a half," he told reporters on a conference call discussing the results, referring to the company's Canadian operations.

In addition to battling a perception of high prices compared to those in U.S. stores, Target has had numerous supply chain problems where store locations have had a hard time getting the latest merchandise onto store shelves quickly and in a reliable manner.

Canadian woes continue

"We recognize that we've disappointed Canadian guests," Mulligan said. "We think we're a great retailer. We have not lived up to our potential nor our expectations."

Mulligan said the company has no plans to add an online selling portion to its website, saying the chain is focusing on turning around the bricks-and-mortar business for now.

On top of Target's Canadian problems, the company faces uncertainty about costs related to the pre-Christmas data security breach in the U.S. that saw as many as 70 million customers get their information stolen. Target has yet to pay out any potential claims by the payment card networks for counterfeit fraud losses stemming from that. And the company said it was unable to estimate future expenses related to the data breach.

The company is also speeding up its $100-million plan to roll out chip-based credit card technology in all of its nearly 1,800 stores, it said in its earnings release Wednesday.

With files from The Associated Press