TJX Boosts Employee Salaries After Posting Strong Q4

On the heels of a Walmart action, TJX Cos. announced that it would change its pay structure for hourly employees even as it posted net income of $648.2 million, or 93 cents per diluted share, for the fourth quarter ended January 31 versus $582.3 million, or 81 cents per diluted share, in last year’s period. Consolidated comparable store sales advanced 4% versus last year’s quarter.

Diluted earnings per share beat a Zacks consensus estimate of financial analysts by three cents.

In the United States, the company related, HomeGoods comps advanced 11% in the quarter, the fastest same-store growth pace among the company’s divisions. Marmaxx, which includes T.J. Maxx and Marshalls, posed a 3% comp. In Canada, where TJX operates Winners, HomeSense and Marshalls stores, comps gained a combined 7%. In Europe, where TJX operates T.K. Maxx and HomeSense, comps advanced 2%.

Net sales for the fourth quarter were $8.3 billion, up 6% from last year’s period, the company maintained.

For the 52-week fiscal year, TJX net income was $2.22 billion, or $3.15 per diluted per share, versus $2.14 billion, or $2.94 per diluted share, in the year earlier, the company reported. With a second quarter debt extinguishment charge excluded, adjusted diluted earnings per share were $3.16, the company stated, compared with last year’s adjusted $2.83.

Consolidated comps for the year increased 2%, with HomeGoods again leading, up 7%. Europe and Canada each posting 3% comp gains and Marmaxx, a 1% advance.

Net sales were $29.1 billion, a 6% increase over the year prior, according to the company.

Carol Meyrowitz, TJX CEO, said, “We are very pleased to end 2014 with excellent results in the fourth quarter. Our EPS growth of 15% and comp increase of 4% significantly exceeded our expectations. We are particularly pleased our comps were almost entirely driven by customer traffic, as consumers responded to our exciting merchandise assortments, amazing values and effective marketing. Merchandise margins were also very strong. We are also very pleased with our full year 2014 performance. Our adjusted earnings per share growth of 12% over last year’s 15% increase marks our sixth consecutive year of double-digit EPS increases.”

Meyrowitz noted that employee investment is important to the company, and TJX has announced that it would change its pay structure so that U.S. store staffers would earn at least $9 per hour beginning in June. Sometime during 2016, all hourly U.S. store employees on the job for six months or more will earn at least $10 per hour, the company indicated.