Target Corp. will be feeling the financial pain for a while from the theft of credit card numbers and other information from millions of its customers, Reuters reported.
The retailer said Wednesday that its fourth-quarter profit slumped 46 percent. It also reported that revenue slipped 5.3 percent as the breach scared off customers, according to Reuters.
During the holiday shopping season, personal data from millions of Target customers was stolen by hackers who targeted credit card terminals in its stores, Reuters reported. The incident has scared shoppers away, and the company says its profits will be affected well into 2014.
"As we plan for the new fiscal year, we will continue to work tirelessly to win back the confidence of our guests. ... We are encouraged that sales trends have improved in recent weeks," said Gregg Steinhafel, chairman, president and CEO of Target, according to Reuters.
Analysts had expected a profit of 80 cents on revenue of 21.5 billion, according to FactSet estimates, Reuters reported.
The breach resulted in $17 million of net expenses in the fourth quarter, Target said, with $61 million of total expenses partially offset by the recognition of a $44 million insurance receivable. The company said it can't yet estimate how much more the data breach will cost, according to Reuters.
Target said expenses may include payments to card networks to cover losses and expenses for reissuing cards, lawsuits, government investigations and enforcement proceedings, Reuters reported.
The massive data breach compromised 40 million credit and debit card accounts between Nov. 27 and Dec. 15, according to Reuters. Target disclosed the breach Dec. 19 and then on Jan. 10 it said that hackers also stole personal information - including names, phone numbers as well as email and mailing addresses - from as many as 70 million customers.
When the final tally is in, Target's breach may eclipse the biggest known data breach at a retailer, one disclosed in 2007 at the parent company of TJMaxx that affected 90 million records, Reuters reported.
Target is offering free credit monitoring services for a year to those who had their data compromised, according to Reuters.
