More Wall Street Fallout From TJX Data Problem
Written by Evan SchumanFinancial analyst firm CL King & Associates has downgraded TJX (to neutral from strong buy) as fallout from the security data breach and the company’s vague answers continues. “Based on our diminished EPS outlook for FY07, we believe an investment in TJX Cos. is likely to be dead money at this point,” said the firm’s research advisory.
Much of the firm’s concerns are about when the next shoes may drop, especially anything involving the cost of paying for all of these unknowns. “Regarding FY07 expenses related to the data breach, the company stated it is not yet able to reasonably estimate the losses it may incur. Management stated it is unlikely to be able to reasonably estimate such losses at the time earnings are released in FY07,” the advisory said. “The ongoing expense issue includes legal costs, exposure to credit and debit card companies and banks, related fees and expenses, and other possible liabilities.”
-Marc
February 19th, 2007 at 11:28 am
I worked at TJX for three years. Their insistence on rewarding syncophancy rather than competence; their eagerness to outsource both customer and employee data regardless of its sensitivity; their unwillingness to budget time or personnel for quality assurance, and their senior management tripling its own compensation while eliminating all bonuses for the IT staff created an environment suggests to me that what has been revealed is simply the tip of the iceberg.