T.J. Maxx Breach Costs Hit $17 Million - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Business & Finance

T.J. Maxx Breach Costs Hit $17 Million

The retailer's quarterly earnings statement showed the massive security breach is expected to cost up to 3 cents per share, on top of the current expenses.

The massive security breach at TJX Companies, Inc. continues to take its toll on the retailer.

The company announced in its first quarterly earnings statement that it took a $12 million hit, or 3 cents per share, because of the loss of more than 45 million credit and debit card numbers that were stolen from its IT systems over an 18-month period. It's considered to be the largest customer data breach on record.

TJX, the parent company of T.J. Maxx, Marshall's, HomeGoods, and other retailers, reported that its net sales from continuing operations for the first quarter of fiscal 2008 increased 6% to $4.1 billion. However, those earnings also included an after-tax charge of $12 million for costs incurred to investigate and contain the intrusion, improve computer security and systems, and communicate with customers, as well as technical, legal, and other fees.

The company also reported that it expects that in the second quarter, it will "continue to incur these types of costs related to the intrusion(s)." And TJX also estimates that those costs will total 2 cents to 3 cents per share.

"Beyond these costs, TJX does not yet have enough information to reasonably estimate the losses it may incur arising from this intrusion, including exposure to payment card companies and banks, exposure in various legal proceedings that are pending or may arise, and related fees and expenses, and other potential liabilities and other costs and expenses," the earnings reported stated.

TJX had recorded a fourth-quarter charge of about $5 million for similar costs related to the security breach. That means at the end of the first quarter, the breach had already cost the company $17 million.

IPLocks, a compliance and database security company, released a report earlier this month estimating that the TJX breach will eventually cost the company $100 per lost record, or a total of $4.5 billion. The company based the estimate on the accumulated costs of fines, legal fees, notification expenses and brand impairment, according to Adrian Lane, the company's chief technology officer.

Last month, TJX was hit with a class-action lawsuit seeking tens of millions of dollars. The Massachusetts Bankers Association, which represents 207 financial institutions, announced that it is filing the suit in federal court in Boston.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
2021 State of ITOps and SecOps Report
2021 State of ITOps and SecOps Report
This new report from InformationWeek explores what we've learned over the past year, critical trends around ITOps and SecOps, and where leaders are focusing their time and efforts to support a growing digital economy. Download it today!
InformationWeek Is Getting an Upgrade!

Find out more about our plans to improve the look, functionality, and performance of the InformationWeek site in the coming months.

News
Becoming a Self-Taught Cybersecurity Pro
Jessica Davis, Senior Editor, Enterprise Apps,  6/9/2021
News
Ancestry's DevOps Strategy to Control Its CI/CD Pipeline
Joao-Pierre S. Ruth, Senior Writer,  6/4/2021
Slideshows
IT Leadership: 10 Ways to Unleash Enterprise Innovation
Lisa Morgan, Freelance Writer,  6/8/2021
Register for InformationWeek Newsletters
Video
Current Issue
Planning Your Digital Transformation Roadmap
Download this report to learn about the latest technologies and best practices or ensuring a successful transition from outdated business transformation tactics.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll