TJX Cos. Q2 sales disappoint
TJX Cos. reported total revenue and comp sales that missed analysts estimates amid increased competition in the off-price sector.
The off-price giant reported net income of $758.9 million and earnings per share of $.62, in line with analysts’ estimates, for the quarter ended August 3, up from $739.6 million and earnings per share of $.58 for the year-ago period.
Net sales increased 4.8% to $9.78 billion, missing estimates of $9.90 billion. Consolidated same-store sales increased 2%, also missing estimates. By division, same-store sales rose 2% at Marmaax U.S. (TJ Maxx and Marshall’s), 1% at TJX Canada and 6% at TJX International.
“We were very pleased that customer traffic drove our consolidated comp and was up at each of our four major divisions,” said Ernie Herrman, CEO and president of The TJX Companies. “This quarter marks the 20th straight quarter of customer traffic increases at TJX and Marmaxx. This speaks to the consistency and fundamental strength of our treasure-hunt shopping experience through many types of retail and economic environments.”
Herrman said the third quarter is off to a solid start.
“We feel great about the terrific availability we are seeing in the marketplace for branded, quality merchandise and our ability to capitalize on the opportunities,” he added.
In comments, analyst Neil Saunders, managing director of GlobalData Retail, noted that while TJX faces increased competition, its biggest challenge is that its customers have not benefitted from the tax and bonus windfalls of last year.
“This means their attitude to buying product has been a little more cautious and conservative, with visit frequency and volumes down marginally,” he said. “When stacked up against some tough prior year numbers, this has flattened the growth curve. Unfortunately, this is a trend that will likely extend into the third quarter as TJX.”
As of August 3, 2019, TJX operated a total of 4,412 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 off-price giant reported net income of $758.9 million and earnings per share of $.62, in line with analysts’ estimates, for the quarter ended August 3, up from $739.6 million and earnings per share of $.58 for the year-ago period.
Net sales increased 4.8% to $9.78 billion, missing estimates of $9.90 billion. Consolidated same-store sales increased 2%, also missing estimates. By division, same-store sales rose 2% at Marmaax U.S. (TJ Maxx and Marshall’s), 1% at TJX Canada and 6% at TJX International.
“We were very pleased that customer traffic drove our consolidated comp and was up at each of our four major divisions,” said Ernie Herrman, CEO and president of The TJX Companies. “This quarter marks the 20th straight quarter of customer traffic increases at TJX and Marmaxx. This speaks to the consistency and fundamental strength of our treasure-hunt shopping experience through many types of retail and economic environments.”
Herrman said the third quarter is off to a solid start.
“We feel great about the terrific availability we are seeing in the marketplace for branded, quality merchandise and our ability to capitalize on the opportunities,” he added.
In comments, analyst Neil Saunders, managing director of GlobalData Retail, noted that while TJX faces increased competition, its biggest challenge is that its customers have not benefitted from the tax and bonus windfalls of last year.
“This means their attitude to buying product has been a little more cautious and conservative, with visit frequency and volumes down marginally,” he said. “When stacked up against some tough prior year numbers, this has flattened the growth curve. Unfortunately, this is a trend that will likely extend into the third quarter as TJX.”
As of August 3, 2019, TJX operated a total of 4,412 stores in nine countries, the United States, Canada, the United Kingdom, Ireland, Germany, Poland, Austria, the Netherlands, and Australia, and three e-commerce sites.