Store closures take $1 billion bite out of TJX sales in Q4

TJX Cos. reported fourth-quarter earnings and sales that missed expectations as its sales took a big hit from store closures around the world. 

The off-price giant reported that its net income totaled $325.5 million, or $0.27 per share for the quarter ended Jan. 30, down from $984.8 million, or $0.81 per share in the year-ago period. Analysts had forecast earnings of $0.62 per share.

Sales fell to $10.94 billion from $12.21 billion last year. Analysts had expected sales of $11.48 billion. By brand, only HomeGoods delivered comp increases, with open-only comp store sales up 12% for the quarter (and 13% for the full year.)

TJX said COVID-related store closures cost it between $950 million and $1.05 billion in lost revenues during the quarter. (TJX stores in Canada were closed for about 32% of the fourth quarter, and European stores were closed 63% of the quarter.). Earnings per share were reduced by 18 cents to 21 cents. 

The company currently has about 690 stores closed due to the pandemic, most in Europe where the company expects stores to be shuttered for about 67% of the first quarter.

In a statement, Ernie Herrman, TJX president and CEO, noted that that the company’s fourth-quarter open-only comp-store sales were down only 3%, exceeding its plan. 

“Overall open-only comp-store sales improved each month of the quarter and were positive in January,” he said. “Further, open-only comp-store sales exceeded our plans across each of our divisions, including at HomeGoods which once again delivered a double-digit increase. We also saw continued strength in our home and beauty departments.” 

Herrman also expressed optimism about the company’s long-term potential. 

“While uncertainty around COVID-19 remains, we feel very good about the strength of the business and our market share opportunities beyond the health crisis,” he said. “We are convinced that our entertaining, treasure hunt shopping experience, our differentiated, branded merchandise selections, and value proposition will continue to resonate with consumers. We see many opportunities to leverage our flexible business model, gain more customers, and continue driving the successful growth of TJX for many years ahead.”

TJX did not provide financial guidance, citing ongoing uncertainty from the coronavirus.