TJX Posts Q2 Loss But Home Emerges As Bright Spot

Home operations buoyed TJX through a second quarter during which stores reopened after closures related to the COVID-19 pandemic.

Net loss for the quarter was $214.2 million, or 18 cents per diluted share, versus net income of $759 million, or 62 cents per diluted share, in the quarter a year before. TJX came up short of a MarketBeat-published analyst consensus estimate of a nine cent per share loss for the quarter.

The company said it posted comparable stores sales only for locations that were open in the quarter. Versus the year-previous period, Marmaxx comps, including those from open T.J. Maxx and Marshalls stores, were down 6% but those for HomeGoods were up 20%. Open-only TJX Canada comps slid 18% and open-only TJX International comps slipped 1%. Company comp total was down 3%. Open-only comp calculations didn’t include contributions from TJX online operations.

Net sales were $6.67 billion versus $9.78 billion in the year-previous quarter. Store closures during the first third of the quarter hit sales results, TJX pointed out.

TJX is predicting negative comps in the third quarter, with Ernie Herrman, TJX president and CEO, telling a conference call audience that softer traffic related to coronavirus-related consumer reluctance to shop physical stores, a potentially weak back-to-school season and issues related to getting inventory to stores all are having an effect.

Herrman said, “I am incredibly proud of the monumental effort of our associates worldwide to reopen more than 4,500 stores in nine countries, multiple distribution and fulfillment centers, and our e-commerce sites. When we reopened, customer response to our values was beyond what we could have imagined. For the quarter, we were very pleased that both our top and bottom lines well exceeded our internal plans, despite our stores only being open for a little more than two thirds of the second quarter, and that our merchandise margin was excellent. Further, we saw especially strong sales at our HomeGoods and Homesense chains, as well as the home departments within our other chains, across geographies. Specifically, HomeGoods delivered double-digit, open-only comp store sales increases each month of the quarter. As to the future, we are confident that when more customers are comfortable with in-store shopping, we will be in a great position to continue gaining market share as we have for many years. We have been a trusted, value leader for more than 40 years, and we see a long runway of successful growth ahead for TJX.”