Target announced Tuesday that it had to lower its earnings outlook for the second quarter due to costs related to its recent data breach.
Interestingly, the costs are only expected to increase due to pending litigation and other loss related expenses. From the company:
At this time, the Company is not able to estimate the costs, or a range of costs, related to the data breach. Costs may include liabilities to payment card networks for reimbursements of credit card fraud and card reissuance costs, liabilities related to REDcard fraud and card re-issuance, liabilities from civil litigation, governmental investigations and enforcement proceedings, expenses for legal, investigative and consulting fees, and incremental expenses and capital investments for remediation activities. These costs may have a material adverse effect on Target’s results of operations in fourth quarter 2013 and/or future periods.
The takeaway? Best practices are written for a reason: to protect the company AND their customers.