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Data-breached TJX Cos. reports profits up 47
FRAMINGHAM, Mass. (2/21/08)--TJX Cos., the Massachusetts discount retailer whose data breach last year became a wakeup call for the nation on identity theft, reported a 47% increase in its fourth-quarter profit over the same period a year ago. The company attributed the boost to improvements in inventory, cost controls and marketing (Associated Press via The New York Times Feb. 20). It also announced it cut the funds set aside for legal reserves by $19 million because of lower-than-expected costs related to the breach. The reduction means TJX's pretax charges from the breach totaled $197 million for the year. The breach compromised more than 100 million credit and debit cards, according to court documents. It stuck credit unions and other financial institutions and card issuers with the costs of replacing cards, monitoring fraud and taking fraud-prevention measures. It also prompted lawsuits and legislative measures related to data breach reimbursement and protecting consumers' information. TJX recently settled some lawsuits brought by banks, and a tentative settlement with consumers is pending a judge's approval. Other litigation and investigations are pending, said the Times. TJX's profits for the fourth quarter ending Jan. 26 rose to $301.1 million, or 66 cents per share, compared with $205.4 million or 43 cents per share during same period a year ago. The company's adjusted results are slightly more than Wall Street estimates, but the company forecast that its first-quarter 2008 profit will be slightly below expectations. TJX's full fiscal year profit was up almost 5% to $771.8 million from the $738 million in 2006. The company, based in Framingham, Mass., owns 2,563 stores, including T.J. Maxx and Marshalls.


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