TJX Enjoys HomeGoods Lift In Sluggish Q1

HomeGoods provided a lift in a first quarter, ended April 29, in which The TJX Cos. posted net income of $536.3 million, or 82 cents per diluted share, versus $508.3 million, or 76 cents per diluted share, in the period a year earlier.

TJX diluted earnings per share topped a MarketBeat published analyst average estimate by three cents although comparable store sales came up a little short of some expectations. According to TJX, changes in foreign currency exchange rates had a one cent positive impact on first quarter earnings per share versus a five cent negative effect in the period a year before.

Comparable store sales advanced 1% overall, with HomeGoods up 3% and Marmaxx, including results from T.J. Maxx and Marshalls, flat versus last year’s quarter. On a constant currency basis, TJX Canada comps gained 3% while TJX International comps were flat.

Net sales increased 3% to $7.78 billion, the company reported, adding that foreign currency exchange rates shifts had a two percentage point negative impact on consolidated net sales growth in the first quarter versus the year-previous period.

Ernie Herrman, TJX president and CEO, said, “For the first quarter, consolidated comparable store sales were up 1% over last year’s strong 7% increase and at the high end of our plan. Earnings per share were 82 cents and above our plan. Comp store sales growth was once again driven by customer traffic. We achieved these results despite the unfavorable weather in parts of the U.S. and Canada compared to last year. We were pleased to see sales trends pick up as the quarter progressed. With our disciplined inventory management, our merchandise margin was up, which speaks to the resiliency and flexibility of our off-price retail model. Further, we are confident that we are gaining market share at each of our four major divisions. The second quarter is off to a solid start, and we have excellent liquidity in our inventories. This positions us extremely well to capitalize on the plentiful buying opportunities we see for exciting fashions and brands in the marketplace and bring them to consumers at amazing values.”

In the quarter, TJX added five T.J. Maxx, four Marshalls and 17 HomeGoods locations in the United States. Worldwide, the company added 50 locations in the quarter to reach 3,862 stores.