For the second quarter, HomeGoods comparable sales, which now include those for HomeSense stores in the U.S., came in flat even as overall TJX posted a positive 2% comp.
In a conference call, TJX management said that the flat HomeGoods comp resulted from internal execution issues in specific segments that the company has been addressing. In the conference call, Ernie Herrman, TJX president and CEO, said that HomeGoods comps had incrementally improved as the third quarter began. Overall, weather impact in May hurt second quarter comps across TJX divisions, but Hermann said the metric overall in the third quarter thus far had gained traction.
The flat HomeGoods comp follows rumors at the recent Summer Las Vegas Market that the rollout of the furniture-focused HomeSense store concept had not generated the results TJX expected, although it should be noted that only a handful of HomeSense stores have been open long enough to generate comps. Management in the conference call said freight costs has weighed on HomeSense and, to a lesser extent, HomeGoods but the that the company is looking for ways to mitigate the impact. The company continues to plan additional HomeSense openings for this year and eight to 10 openings for next year.
Comparable store sales at the Marmaxx division, including T.J. Maxx and Marshalls, advanced 2% in the quarter year over year while those at TJX Canada gained 1% and those at TJX International increased 6%.
Net income for the second quarter came in at $759 million, or 62 cents per diluted share, versus $739.6 million, or 58 cents per diluted share, in the fiscal year prior. TJX earnings per diluted share matched a MarketBeat-published analyst consensus estimate.
TJX net sales in the second quarter were $9.78 billion versus $9.33 billion in the period a year before.
By division versus the quarter a year earlier, Marmaxx net sales increased to $6.11 billion from $5.85 billion; HomeGoods net sales increased to $1.42 billion from $1.33 billion; TJX Canada net sales increased to $967.5 million versus $937.7 million; and TJX International net sales increased to $1.28 billion from $1.22 billion.
Segment profit by division versus a year prior at Marmaxx was $855.2 million, up from $830.3 million; at HomeGoods was $128.9 million, down from $142.1 million; at TJX Canada was $118.2 million, down from $138.7 million; and at TJX International was $50.5 million, up from $48.7 million.
Herrman said, “For the second quarter, earnings per share were 62 cents, at the high end of our expectations, and our consolidated comparable store sales increased 2% versus last year’s 6% growth, which was in line with our guidance. We were very pleased that customer traffic drove our consolidated comp and was up at each of our four major divisions. This quarter marks the 20th straight quarter of customer traffic increases at TJX and Marmaxx. This speaks to the consistency and fundamental strength of our treasure-hunt shopping experience through many types of retail and economic environments. The third quarter is off to a solid start. We feel great about the terrific availability we are seeing in the marketplace for branded, quality merchandise and our ability to capitalize on the opportunities. We are excited about our many initiatives underway to keep driving sales and customer traffic throughout the fall and holiday selling season, and have great confidence in our potential to keep gaining market share around the world.”