The Dixons Carphone PLC (LON:DC) (DC.L) share price has fallen by around 3% following news of a data breach. The company has confirmed in an update released today that there has been unauthorised access to certain data held by the business.
The company has launched an investigation in response, and has added extra security measures to its systems. It has taken action to close off the access and has no evidence that it is continuing. It also has no evidence that any fraudulent use of the data has been undertaken.
Dixons Carphone’s investigation is still ongoing, but it appears as though there was an attempt to compromise 5.9 million cards in one of the processing systems of Currys PC World and Dixons Travel stores. In addition, 1.2 million records containing non-financial personal data such as name, address or email address have also been accessed.
Clearly, this is bad news for the company and shows that cyber crime remains a constant threat to all businesses. It comes at a time when the stock is facing an uncertain future, with its recent performance having been disappointing and investor sentiment being weak.
In the last year the Dixons Carphone share price is down by 40%. That’s a worse performance than other consumer stocks such as Marks and Spencer Group Plc (LON:MKS) (MKS.L) and Whitbread plc (LON:WTB) (WTB.L). The Marks and Spencer share price is down 20%, while Whitbread has moved 2% higher during the same time period.
In my view, Dixons Carphone could experience further declines in its stock price. Investor sentiment could weaken further, and this could cause a fall in its valuation. Therefore, I wouldn’t be surprised if it continues to underperform a number of its sector peers over the near term, since its trading conditions appear to be creating an additional headwind.