TJX profit plunges on costs from massive data breach

TJX Cos. today said its second-quarter profit was cut by more than a half as the operator of discount stores including T.J. Maxx and Marshalls recorded a $118 million charge due to costs from a massive breach of customer data.

The owner of nearly 2,500 stores reported net income of $59 million for the May-July period, or 13 cents per share, compared with a profit of $138.2 million, or 29 cents per share, in the same period a year ago.

Sales rose 9 percent to $4.3 billion, up from $3.99 billion a year ago. Total sales at stores open at least a year, or same-store sales, rose 5 percent.

The after-tax charge from the data breach equalled $118 million, or 25 cents per share. Not counting that expense, TJX's profit for the latest quarter equalled 38 cents per share, up from 29 cents per share in the year-ago period.

On that basis, the performance narrowly beat the consensus forecast of analysts surveyed by Thomson Financial, who expected a profit of 37 cents per share on revenue of $4.32 billion, on average.

TJX disclosed the breach on Jan. 17, and said March 28 that one or more intruders unearthed data from at least 45.7 million credit and debit cards. TJX faces lawsuits from banks, consumers and investors.

The second-quarter charge, which dwarfed the charge the company took in its past two quarters, includes $11 million for costs incurred during the latest quarter, and $107 million for a reserve to cover potential losses.

TJX has reported same-store sales gains of 5 percent in May, June and July, beating analysts' expectations during each period. The company has enjoyed generally brisk sales and stronger results than most other retailers in recent months despite negative publicity about the data theft.

TJX operates T.J. Maxx, Marshalls, HomeGoods, A.J. Wright and Bob's Stores in the United States, Winners and HomeSense stores in Canada, and T.K. Maxx stores in Europe.

Shares fell 38 cents to $27.28 at the open of trading Tuesday. (AP)