Target takes $162m hit on data breach expenses
25 February 2015 | 7320 views | 0
Target has so far booked $162 million in expenses related to the data breach it suffered in late 2013 which saw thieves steal the card details of tens of millions of customers.
Reporting its full year financial results, the retailer says that it incurred breach-related expenses of $191 million in 2014, which was partially offset by the recognition of a $46 million insurance receivable. This was on top of fourth quarter 2013 net costs of $17 million.
More expenses could be on their way. In December, a judge gave financial institutions the go-ahead to proceed with their lawsuit against Target over losses associated with the attack. A class action suit is also in the pipeline.
Meanwhile, another retailer recently hit by hackers, Home Depot, says that it incurred a pre-tax net expense of $33 million, or $0.02 per diluted share, related to its data breach, of which $5 million was recognised in the fourth quarter.
In its results statement, the company says its fiscal 2015 diluted earnings-per-share guidance does not include an accrual for other possible losses related to the breach.
"Other than the breach-related costs contained in the Company's fiscal 2014 earnings, at this time the Company is not able to estimate the costs, or a range of costs, related to the breach."