Hurricanes, fashion missteps take toll on off-price giant
High-flying TJX didn’t fly quite so high in its third quarter, reporting a rare miss in sales.
The TJX Cos. reported flat same-store sales in its third quarter, citing the negative impact of a series of hurricanes during the period, unseasonably warmer temperatures and a fashion miss. Analysts had expected an increase of 2.4%.
Net sales for the quarter, ended Oct. 28, increased 6% to $8.8 billion, slightly below estimates. Same-store sales were flat compared to last year’s 5% increase. By brand, same-store sales were down 1% at Marmaxx (Marshalls and T.J. Maxx), and up 3% at Home Goods and 1% at TJX International.
Net income rose nearly 17% to $641.44 million, or $1 per share, on higher margins, compared to $550 million, or 83 cents per share, in the year-ago period. Gross profit margin came in at 29.8%, up from 29.5% last year.
"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," said Ernie Herrman, CEO and president. "Further, customer traffic, or transactions, were 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."
On the chain’s quarterly call, Herrman also cited fashion missteps, which he said would be corrected in the current quarter.
"It was absolutely a fashion miss ... this was, really, on our own part a selection issue and had nothing to do with availability out there,” Herrman said.
Looking ahead, Hermann said the fourth quarter is off to a strong start.
“We have excellent inventory liquidity to capitalize on the plentiful opportunities we are seeing for quality, branded merchandise in the marketplace," he said.
The retailer expects holiday-quarter same-store sales growth of 1%-2%. It maintained its fiscal 2018 profit forecast at the high-end of the range of $3.91 to $3.93 per share.
During the third quarter, the company increased its store count by 139 stores. As of October 28, 2017, the retailer operated a total of 4,052 stores in nine countries, the United States, Canada, the United Kingdom, Ireland, Germany, Poland, Austria, the Netherlands, and Australia, and three e-commerce sites.
The TJX Cos. reported flat same-store sales in its third quarter, citing the negative impact of a series of hurricanes during the period, unseasonably warmer temperatures and a fashion miss. Analysts had expected an increase of 2.4%.
Net sales for the quarter, ended Oct. 28, increased 6% to $8.8 billion, slightly below estimates. Same-store sales were flat compared to last year’s 5% increase. By brand, same-store sales were down 1% at Marmaxx (Marshalls and T.J. Maxx), and up 3% at Home Goods and 1% at TJX International.
Net income rose nearly 17% to $641.44 million, or $1 per share, on higher margins, compared to $550 million, or 83 cents per share, in the year-ago period. Gross profit margin came in at 29.8%, up from 29.5% last year.
"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," said Ernie Herrman, CEO and president. "Further, customer traffic, or transactions, were 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."
On the chain’s quarterly call, Herrman also cited fashion missteps, which he said would be corrected in the current quarter.
"It was absolutely a fashion miss ... this was, really, on our own part a selection issue and had nothing to do with availability out there,” Herrman said.
Looking ahead, Hermann said the fourth quarter is off to a strong start.
“We have excellent inventory liquidity to capitalize on the plentiful opportunities we are seeing for quality, branded merchandise in the marketplace," he said.
The retailer expects holiday-quarter same-store sales growth of 1%-2%. It maintained its fiscal 2018 profit forecast at the high-end of the range of $3.91 to $3.93 per share.
During the third quarter, the company increased its store count by 139 stores. As of October 28, 2017, the retailer operated a total of 4,052 stores in nine countries, the United States, Canada, the United Kingdom, Ireland, Germany, Poland, Austria, the Netherlands, and Australia, and three e-commerce sites.