TJX Cos. sales jump 9%; Q2 off to 'good start'
TJX Cos. reported better-than-expected earnings and revenue as increased customer traffic fueled sales gains across all its divisions.
“Our terrific first-quarter performance is a testament to the strong execution across the company,” CEO Ernie Herrman said on the earnings call.
The off-price giant also hiked its full-year outlook, saying it is convinced that “the flexibility and resiliency of our business model will continue to be a tremendous advantage."
TJX's net income totaled $1.3 billion, with earnings per share of $1.19 ,for the quarter ended May 2, up 29% from earnings per share of $0.92 in the year-ago quarter. Analysts had expected earnings per share of $1.02.
Net sales increased 9% to $14.32 billion, topping analysts expections of $14 billion. Consolidated comparable sales increased 6%, driven equally by higher average basket size and increased customer transactions, the company said.
By division, same-store sales rose 9% at Home Goods (includes HomeGoods and Homesense stores) and 6% at Marmaxx (includes TJ Maxx, Marshalls and Sierra stores as well as their e-commerce sites), Same-store sales rose 7% at TJX Canada and were up 4% at TJX International.
Gross profit margin improved from 29.5% to 31.3%. The company cited better merchandise margins, gains from inventory and fuel hedging contracts, and cost leverage from higher-than-expected sales volumes.
In the earning statement, Herrman noted that TJX's sales, pretax profit margin and earnings per share were all "well above" its plan.
"The second quarter is off to a good start, and we are excited about the initiatives we have planned to keep driving sales and attract consumers to our retail banners," he said. "Availability of quality, branded merchandise is outstanding, and we are well-positioned to take advantage of the plentiful buying opportunities we are seeing in the marketplace. We are energized by the opportunities we see to drive sales, continue expanding our global footprint, and capture additional market share around the world for many years to come.”
For the full fiscal year, TJX now expects comparable sales growth of 3% to 4%, up from its earlier guidance of 2% to 3%. Earnings per share are expected to be between $5.08 to $5.15, compared to the previous range of $4.93 to $5.02.
During the first quarter, the company increased its store count by 48 stores overall to a total of 5,262 stores across ten countries, including TJ Maxx, Marshalls, HomeGoods, Homesense, and Sierra in the U.S.; Winners, HomeSense, and Marshalls in Canada; TK Maxx and Homesense in Europe, and TK Maxx in Australia.
