With weather impacting sales, TJX posted flat comparable store sales in the third quarter versus the period a year earlier, although HomeGoods comps gained.
Net sales for the third quarter increased 6% to $8.76 billion compared to the year-prior quarter. In the U.S., comps at the Marmaxx Group, which includes the Marshalls and T.J. Maxx operations, slipped 1% from the quarter a year before, while those at HomeGoods gained 3%. Comps at TJX Canada increased 4% and those at TJX International, including operations in Europe and Australia, advanced 1% versus the year-earlier quarter.
Third quarter net income was $641.4 million, while diluted earnings per share came in at $1, versus net income of $549.8 million, or 83 cents per diluted share, in the previous third quarter. Earnings per diluted share for the third quarter matched a Zacks Investment Research analyst average estimate.
“For the third quarter, consolidated comparable store sales were flat versus last year’s strong 5% increase,” said Ernie Herrman, TJX president and CEO. “Certainly, the hurricanes had a negative impact during the quarter. Additionally, we believe that warmer temperatures in the U.S. during the quarter dampened demand for apparel at our Marmaxx division. While sales were not as strong as we would have liked, we were pleased that sales trends at Marmaxx improved as the weather turned more seasonable. Customer traffic, or transactions, was strong and up at every major division. Importantly, our consolidated merchandise margin increased, which we believe speaks to the flexibility of our off-price business model. Overall, our organization sharply executed our off-price fundamentals of opportunistic buying, lean inventory discipline and being strategic and targeted in the flow of merchandise to our stores, which helped drive margins.”
The fourth quarter, Herrman added, “is off to a strong start, and we see numerous opportunities for the holiday selling season across our retail banners. We have excellent inventory liquidity to capitalize on the plentiful opportunities we are seeing for quality, branded merchandise in the marketplace. We will be offering consumers eclectic gift selections from around the world, at compelling, off-price values, and shipping fresh assortments to our stores and online throughout December and beyond. We have many initiatives underway to drive sales and traffic and are excited about our marketing campaigns.”