Target’s breach-related expenses not covered by insurance have totaled $162 million so far, its latest financial report shows. And experts says the breach could continue to have a financial impact for years to come.
Gross expenses stemming from Target’s data breach in December 2013 have totaled $252 million. But insurance has covered $90 million of that cost. The breach exposed 40 million payment cards and personal information on 70 million customers.
Target incurred $4 million in net breach-related expenses for the fourth quarter of 2014, ending Jan. 31, the company announced Feb. 25 in its latest earnings report. For the full fiscal year, Target had $145 million in net expenses related to the breach, which reflects $191 million of gross expenses offset by a $46 million in insurance coverage.
For 2013, Target had $17 million in net breach-related expenses, with $61 million of gross expenses offset by $44 million worth of insurance coverage.
For the fourth quarter, Target reported a net loss of $2.6 billion, compared to a $352 million profit in the third quarter, its first quarterly profit since the breach (see: Target: First Profit Gain Post-Breach).
While breach response costs are on a downward trend, Target will continue to feel the impact from the breach for years to come, says Rick Holland, principal analyst at Forrester Research. “Litigations like what we are seeing in federal court in Minnesota could drag this painful breach on for quite some time,” he says. In late 2014, a federal judge ruled that class action lawsuits brought by several banking institutions and consumers impacted by the breach could move forward (see: Target Breach Consumer Lawsuit to Proceed).