Victoria’s Secret estimates $10M income hit from cybersecurity breach

The security breach that ruined Victoria’s Secret’s Memorial Day sale is expected to siphon about $10 million from Q2 operating income, the firm’s chief financial officer, Scott Sekella, has said.

Earlier, the company said it shut down corporate systems and its e-commerce website on May 26th and immediately enacted response protocols to contain and prevent unauthorized network access.

Its website was restored on May 29th, but Victoria’s Secret immediately encountered problems. For instance, the incident prevented employees from accessing certain systems and information needed for the release of Q1 results, so it was delayed.

Now, Q1 earnings are out, and even though the famous clothing and lingerie retailer held its top line mostly steady in Q1, Sekella also said that the company is expecting the cyber breach to wipe out about $10 million in expected profit in Q2.

That’s, of course, a significant amount of cash, considering that Victoria’s Secret only expects to make between $15 and $35 million in total profit for the quarter.

The cyber incident at Victoria's Secret followed several such incidents at fashion and retail brands, including Cartier and Marks & Spencer. The latter company said in late May that a sophisticated cyberattack would cost it about 300 million pounds ($403 million) in operating profit.