Breach costs at $162 million, Target reports
Target informed the SEC that it has sustained $252 million in gross breach-related expenses since Dec. 2013, when it reported that hackers stole the personal information of 70 million customers.
In Target's Form 8-K filed Feb. 25, the company said it had fiscal 2014 gross expenses related to the breach of $145 million. In fiscal 2013, it had $61 million in gross expenses for a total of $252 million. Target's fiscal year runs February to January.
The breach expenses were off-set by insurance claims, which netted the company $46 million in fiscal 2014 and $44 million in fiscal 2013, for a total of $90 million.
Target told the SEC in a March 2014 fiscal-year filing that to limit exposure to data breach losses the company maintains $100 million of network-security insurance coverage with a $10 million deductible.
Overall, Target's net breach costs stand at $162 million. The number includes adjustments or estimated probable losses "for what we believe to be the vast majority of actual and potential breach-related claims, including claims by payment card networks."
The breach does not appear to have derailed the company's business in any way. In fact, for fiscal 2014, Target's full-year comparable sales grew 1.3 percent and digital channel were up more than 30 percent . Target also paid dividends of $1.2 billion in fiscal 2014, an increase of 19.8 percent above 2013.
Despite the expenses, the company does not list on-going expenses related to the breach as it's greatest risk. In it's 10-K filing last March the company said, "we believe that the greatest risk to our business arising out of the Data Breach is the negative impact on our reputation and loss of confidence of our guests, as well as the possibility of decreased participation in our REDcards Rewards loyalty program which our internal analysis has indicated drives meaningful incremental sales."