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Home Depot Still Repairing Data Breach Costs

Like Target, Home Depot knows all too well that the true cost of a payments data breach won’t be known until long after the dust from the cyberattack settles.

While Home Depot’s earnings are on the mend, as the retailer posted a better than expected first quarter earnings, the lingering expenses from the breach will likely be a sore spot for the retailer. In Q1 alone, Home Depot shelled out $7 million in breach-related expenses, the company said during a Tuesday (May 19) first- quarter earnings call. That figure, however, is just a sliver of the breach bucket figure so far, as Home Depot announced in the company’s fourth-quarter 2014 earnings that it had spent roughly $33 million for data breach costs. But that was just 2014 figures, and 2015 should bring more breach-related expenses as more suits get filed against the retailer.

Some estimates suggest that Home Depot has spent somewhere above $50 million to pay back the costs associated with the attack that impacted 56 million payment cards. But the retailer did not provide any forecast about just how widespread the breach scope could reach.

Still, outside of the breach talk that is slowly dialing down, the retailer posted a positive earnings report as it hit a 6.1 percent sales increase, year over year, to $20.9 billion.

“We had a stronger than expected start to the year as we experienced a more normal spring across much of the country and continued recovery of the U.S. housing market,” Craig Menear, Home Depot’s CEO, said in the earnings release.

And that better-than-expected earnings was highlighted in the industry as a potential high point for retail, providing some hope for consumer spending — especially when other major retailers are falling short on quarterly profit.

“This is one more indication that the consumer is spending, but they’re spending more and more on their home, so there’s a shift in spending happening,” Brian Nagel, senior equity analyst at Oppenheimer & Co, said on CNBC’s “Squawk Box.

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