Troubled US discount-retailer TJX has seen its profits deteriorate in the wake of the massive data breach, revealed in January, in which details relating to 46 million customer credit cards were stolen by hackers.
According to a US Securities and Exchange Commission filing, the retailer’s net income for the second fiscal quarter 2007, fell sharply by 57%, down $79 million on the year ago quarter. The retailer appears to have been hardest hit by an after-tax, second-quarter charge of $118 million, associated with the breach.
Broken down, the charge represents $11 million for costs incurred during the quarter and a further $107 million of funds reserved for “probable” future losses, the filing said.
The true extent of the financial fall-out of the data breach, among the most reported on corporate data breaches of all time, remains unclear, however. Some analysts predict the breach could ultimately cost in excess of half a billion dollars, due to related litigation fees.
Curiously, however, the retailer’s sales for the quarter rose by $400 million on the year ago quarter, bearing out the old adage that there is no such thing as bad publicity. Such surprising robustness is also a result of the retailer’s iron grip on the discount clothing market.