At Target, the negative impact that the December 2013 breach has had on the the business continues to accelerate. So far company executives have been brought in front of congress, holiday sales numbers fell, two top officials have left the company and the business is in the middle of a multi-million dollar investment to upgrade credit card processing systems, software and hardware.
The latest report from USA Today show that things are only getting worse. The retailer’s first-quarter profit fell 16 percent, below Wall Street estimates. Adjusted earnings, excluding costs related to the breach and other one-time items, were 70 cents a share, 1 cent below analysts’ consensus.
Target officials also announced that the breach sustained during last holiday season cost the company a net of $18 million in the first quarter — $26 million in expenses that was offset by an $8 million insurance claim.
Interim CEO John Mulligan said that these numbers are “in line with expectations,” in a statement to the media.
“While we are pleased with this momentum, we need to move more quickly,” he said. “As a result, we have made changes to our management team and are investing additional resources to drive U.S. traffic and sales, improve our Canadian operations and advance our ongoing digital transformation.”
The security of any retailer’s point of sale system should be a top priority. You do not need to have 110 million consumers affected for a breach to have negative impacts on your business. The right software, hardware and networking is critical for ensuring that company, consumer and payment data is safe.