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Tough as the holiday season was for many retailers, Wednesday's fourth-quarter earnings report proves that few had it tougher than Target, which was bedeviled during the peak shopping season by one of the largest-ever retail data breaches
That breach cost the company $61 million in the fourth quarter — $17 million in net expenses, and counting a $44 million insurance receivable. That includes paying the card networks to cover losses and expenses related to reissuing cards, lawsuits, government investigations and enforcement proceedings.
Target says it doesn't yet have an estimate of the full cost of the breach. Avivah Litan, a security analyst at technology firm Gartner, puts the costs of the breach between $400 million and $450 million.
The rest of the company's long-awaited fourth-quarter results tell a tale of woe: Net income fell 46% to $520 million, or 81 cents a share, from $961 million, or $1.47, a year earlier, the Minneapolis-based company reported.
At the same time, the discount retailer said that sales fell 5.3%, as many customers were leery about shopping after the breach. Revenue at stores open at least a year fell 2.5%.
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