News Byte: Data Breach Socks Target Earnings by 46%

Share this article:
Target's Q4 results are riddled by data breach.
Target's Q4 results are riddled by data breach.
 

During the first half of its fourth quarter, said Target CEO Gregg Steinhafel in an earnings statement released today, the chain's holiday-focused marketing plan “drove better-than-expected sales.” Then the unexpected happened. Anywhere from 70 to 130 million Target customers, by various accounts, had their personal files breached by hackers and Target ended up with worse-than-could-be-imagined results.

Sales for the quarter ending February 1 dropped 6.6% and same store sales dipped 2.5%, but costs of dealing with the massive data breach socked Target net earnings to the tune of 46%—plummeting from $961 million in the 2012 quarter to $520 million.

“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.”

The company said it was not currently able to estimate future expenses of the data breach, though it stated it expected it to adversely affect full-year results for 2014. Among costs it anticipates to bear due to the breach are payments associated with potential claims by the card networks for fraud losses and incremental costs associated with civil litigation, government investigations, consulting fees, and investments for remediation activities.

Share this article:

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in Privacy

Internet of Things Privacy Working Group Begins Forming

Internet of Things Privacy Working Group Begins Forming

Individuals with expertise in Web privacy issues are being sought to begin meetings this summer.

Amended Privacy Act Could Be a Boon to Consumer Trust

Amended Privacy Act Could Be a Boon to ...

A majority of House members now support amendments to ECPA that would limit government access to customer data.

App of the Week: TRUSTe

App of the Week: TRUSTe

Mobile consumers can now take better control of their privacy preferences.