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Why We Fight

TJX appears to have suffered little financial fallout. Its stock fell just 2 percent yesterday after the company disclosed the new problems, along with its fourth-quarter earnings. For the three months ended Jan. 27, TJX said, profit fell to $205 million from $288 million in the same period a year earlier.

Store closings led TJX to take a $38 million charge, while the cost of investigating the breach and upgrading systems was $5 million through the end of the quarter.

On an earnings webcast with analysts yesterday, TJX executives said that store traffic through the end of January hasn't suffered since its Jan. 17 announcement of the security breach. "I want to assure our shareholders that our operational management team isn't being distracted from our core business or our opportunities to grow," said chief executive Carol Meyrowitz on the webcast.

Mark Montagna, analyst at CL King in New York, said yesterday's share decline had more to do with lower-than-expected earnings guidance TJX gave yesterday than the data problems.

"I don't think that overall Wall Street is seeing it as that big an issue," Montagna said.

He praised TJX's management and noted that other retailers have faced similar security problems. "Once they get this resolved, it's behind them," he said.

"TJX says theft of data may go back to 2005", Boston Globe, 2/22/2007