Data breach expenses depress TJX profits

TJX Cos. said today first-quarter profit dipped 1 percent as costs related to a widely publicized breach of customer data offset revenue growth.

Headquartered in Framingham, TJX operates such off-price apparel chains as T.J. Maxx and Marshalls.

Net income for the fiscal 2008 quarter ended April 28 slipped to $162.1 million, or 34 cents per share, from $163.8 million, or 34 cents, a year ago. Excluding charges of $12 million related to the data breach, earnings from continuing operations totaled 37 cents per share in the latest period, up 9 percent year-over-year.

Revenue climbed 6 percent to $4.11 billion from $3.87 billion in the prior-year quarter, although the company said same-store sales fell slightly below plan due to cold and wet weather in the U.S. during March and early April.

The results just missed analysts' consensus estimates for profit of 38 cents per share and revenue of $4.16 billion, according to a Thomson Financial poll.

In January, TJX disclosed that computer hackers broke into its systems and stole customer data. The company said it will incur more costs related to the investigation, enhancing computer security and systems, as well as technical, legal and other fees that could total 2 or 3 cents per share in the second quarter.

Beyond these costs, TJX said it doesn't know how much the data breach will eventually cost, including exposure to credit card companies and banks, various legal proceedings and other expenses.

TJX operates 830 T.J. Maxx, 763 Marshalls, 271 HomeGoods, and 127 A.J. Wright stores, as well as 35 Bob's Stores, in the United States. In Canada, the company operates 185 Winners and 69 HomeSense stores, and in Europe, 211 T.K. Maxx stores.
(AP)