Store closures hit TJX hard with big Q1 loss; defers Q2 rent to 2022
With its stores dark for half the quarter due to the COVID-19 pandemic and a weak e-commerce presence (or none at all for some of its brands), The TJX Cos. posted a much wider first-quarter loss than expected.
The off-price giant reported a net loss of $887.5 million, or $0.74 per share, for the quarter ended May 2, compared to a profit of $700.2 million, or $0.57 per share in the year-ago period. Analysts had expected a loss of $0.7 per share.
Revenue totaled $4.41 billion, down from $9.28 billion last year and below expectations of $5.46 billion. In addition to the impact of store closures, TJX said it had shareholder distributions of $480 million prior to the closures, including a share repurchase program that has since been suspended.
TJX said it paid most of its first-quarter rent. It also said it negotiated with many of its landlords to defer some of its April, and a meaningful portion of its second quarter, rent payments to later dates, primarily in fiscal 2022.
The company, whose banners include T.J. Maxx, Marshalls, HomeGoods and Sierra, started to reopen stores in select markets on May 2, including in 25 U.S. states. To date, it had reopened — with new social distancing and safety measures in place — more than 1,600 stores worldwide, with expectations of opening nearly all its 4,545 locations by the end of June. The retailer has also reopened its e-commerce sites in the U.S. and U.K.
Initial sales overall have been above last year’s sales across all states and countries for the over 1,100 stores that have been reopened for at least a week, according to the company.
“Throughout our 43-year history, we have navigated through many challenging economic and retail environments, and I am convinced that we will manage through this as well,” said CEO Ernie Herrman. “While the pandemic has resulted in our making difficult decisions, TJX has always been and remains a fundamentally strong company. We have a senior management team with decades of TJX and off-price retail experience, who are fully dedicated to managing through this crisis while ensuring the long-term stability and strength of TJX and returning the company to its path of long-term, successful growth.”