Business

Target’s profits down $440M after data breach

Target reported a profit drop of $440 million for its fiscal fourth quarter as a result of the credit card breach on Wednesday.

Profit fell to $520 million, or 81 cents a share, from $961 million, or $1.47 a share, a year earlier. Total revenue fell 5.3 percent to $21.52 billion.

The company reported adjusted profit of $1.30 a share, at the top end of its prior guidance range of $1.20 to $1.30 a share.

U.S. comparable sales fell 2.5%, also in line with its previous forecast.

the retailer said the credit card breach it disclosed in December incurred $61 million of total expenses in the fourth quarter reported on Wednesday.

That was offset by a $44 million insurance receivable, reducing the net expense to $17 million, the company said.

Target said the expenses included costs related to investigating the data breach, offering credit-monitoring and identity-theft protection services and Target card-replacement costs.

Target said it based its calculation on an expectation that it would reach negotiated settlements of payment card companies’ potential claims for expenses related to the data breach, but not on any determination that it’s possible Target could be found liable were they to be sued.

Target said the amount doesn’t include any allotments for the potential claims by the payment card companies for counterfeit fraud losses. “At this time we are not able to reasonably estimate a range of possible losses on the payment card networks’ potential claims in excess of the amount accrued,” Target said.

This article originally appeared on Marketwatch.com.