TJX sees potential to add another 1,300-plus stores
The TJX Companies sees plenty of opportunity to expand its footprint.
The off-price giant reported first-quarter earnings above expectations amid sales gains across all its divisions and said its second quarter is off to a “good start.” On the company's earnings call, TJX CEO Ernie Herrman said the company is "convinced" that significant market share opportunities remain across the U.S., Canada, Europe and Australia.
"Over the long term, we see potential to further expand our store footprint by at least another 1,300-plus stores with our current retail banners in our existing countries alone," he told analysts.
Herrman expressed confidence about the company's ability to keep its stores stocked, noting that its stores receive multiple deliveries each week of fresh branded merchandise "to surprise and excite our customers."
"With our more than 1,300 global buyers sourcing from a universe of more than 21,000 vendors and from over 100 countries, we are confident that there will be plenty of quality branded merchandise available to us to support our growth plans," he said on the call.
First Quarter
TJX's net income rose to $1.07 billion, or $0.93 per share, for the quarter ended May 4, from $891 million, or $0.76 per share, in the year-ago period. Analysts had expected earnings per share of $0.88.
Net sales increased 6% to $12.5 billion in line with estimates. Sales at Marmaxx (includes Marshalls, T.J.Maxx and Sierra) rose 5% to $7.75 billion. HomeGoods sales were up 6% to $2.08 billion. TJX International sales surged 9% to $1.54 billion; TJX Canada sales rose 7% to $1.11 billion.
TJX’s consolidated comparable sales rose 3%, at the high-end of its plan. By division, comps rose 2% at Marmaxx and 4% at HomeGoods. TJX Canada comps rose 4% and international comps were up 2%.
“We saw comp sales growth at every division entirely driven by customer transactions, which underscores the strength of our value proposition,” stated Herrman in the earnings release. “This also gives us confidence in our ability to gain market share across all of our geographies. The second quarter is off to a good start and we see numerous opportunities for our business for the balance of the year that we plan to pursue.”
TJX raised its guidance for the full fiscal year to $4.03 to $4.09 per share from $3.99 to $4.02 per share.
As of May 4, the company held $5.1 billion in cash and equivalents. Total inventories were $6.2 billion versus $6.4 billion last year.
At the end of the quarter, TJX operated a total of 4,972 stores across nine 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.