Target predicts staggering $148m loss over December security breach

By Sooraj Shah
07 Aug 2014 View Comments
targer-customers-have-been-affected-by-the-data-breach

US retail giant Target is expected to file a $148m loss over its disastrous 2013 security breach, which affected 40 million of its customers.

Hackers are believed to have stolen the credit and debit card details of 40 million customers, and 70 million other customer records from Target in a two-month attack. 

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Interim CEO John Mulligan said that since the data breach was publicised last December, the company has focused on "providing clarity on the firm's estimated financial exposure to breach-related claims", including claims from payment card networks.

The company said that its second quarter financial results are expected to include gross expenses of $138m, partially offset by a $38m insurance payment, related to the data breach.

The company added that the estimates involve "significant judgement", but that they may change as new information becomes available.

"It is reasonably possible that the company may incur a material loss in excess of the amount accrued," it stated. However, the company adds that this is unlikely. 

And the breach may have affected ongoing sales. Mulligan said that business at the US retailer in its home region and in Canada "continues to be challenging".

He added: "Results aren't yet where they need to be, we are making progress in our efforts to drive US traffic and sales, improve our Canadian operations and advance Target's digital transformation."

The company's CEO, Gregg Steinhafel, and CIO, Beth Jacob, both resigned after the data breach, and have since been replaced with PepsiCo executive Brian Cornell and former Homeland IT security adviser Bob DeRodes.

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