TJX Q3 tops expectations; to roll out e-commerce for HomeGoods

The TJX Cos. reported third-quarter sales and earnings that beat the Street and said it plans to reinstate its quarterly dividend payment.

The off-price giant reported net income of $866.7 million, or $0.71 per share, in the quarter ended Oct.31, up from $828.3 million, or $0.68 per share, last year. Analysts had expected earnings per share of $0.40.

Sales fell 3.2% to $10.12 billion from $10.45 billion last year. Analysts had forecast sales of $9.38 billion. 

Overall "open-only" comp-store sales fell 5%. (TJX defined open-only comp-store sales as the increase or decrease of sales at stores for the days they were open in Q3 2021 against sales for those same days in Q3 2020.) By brand, sales fell 10% at the Marmaxx division (comprised of Marshalls and TJ Maxx in the U.S.) and were down 7% at TJX Canada.  Comp sales surged 15% at Home Goods as consumers continue to spend on their homes amid the pandemic,

“All of our divisions drove sales above our plans, and our home, beauty, and activewear businesses outperformed at Marmaxx, TJX Canada, and TJX International,” said Ernie Herrman, CEO and president of The TJX Companies. “At HomeGoods, we delivered another quarter of double-digit, open-only comp-store sales growth.”

Herrman added that to leverage the company’s strength in the home category and capitalize on its market share growth opportunities, it plans to rollout e-commerce for HomeGoods later next year.

Herrman said that while significant uncertainty remains around COVID-19, TJX is focused “on bringing consumers exciting gift selections at excellent values,” Herrman said. 

“We plan to ship fresh assortments to our stores and online throughout the holiday selling season,” he said. “Longer term, when we are past this health crisis, we are very confident that we will continue to gain more customers and drive the successful growth of TJX well into the future,” he said. 

During the third quarter, the company generated $4.1 billion of operating cash flow and ended the period with $10.6 billion of cash. Given its “strong liquidity position,” TJX said that it expects to declare a quarterly dividend in December and payable in March 2021. At an expected $0.26 per share, the dividend would represent a 13% increase in the per share dividend compared to the company’s previous dividend paid in March of 2020.

TJX has approximately 470 stores that are temporarily closed due to local government mandates in response to the COVID-19 global pandemic. The vast majority of the stores are located in Europe.

As of October 31, 2020, TJX  operated a total of 4,574 stores in nine countries, the United States, Canada, the United Kingdom, Ireland, Germany, Poland, Austria, the Netherlands, and Australia, and four e-commerce sites. These include 1,272 T.J. Maxx, 1,134 Marshalls, 821 HomeGoods, 48 Sierra, and 34 HomeSense stores in the United States; 280 Winners, 143 HomeSense, and 102 Marshalls stores in Canada; 602 T.K. Maxx and 78 HomeSense stores in Europe; and 60 T.K. Maxx stores in Australia.