Off-price is on track at TJX
By Staff -- Home Textiles Today, 11/13/2007 1:31:00 PM
Framingham, Mass. – Off-price retailer The TJX Cos. reported third-quarter results today that formed strong evidence that it’s a good time to be an opportunistic merchandiser: Net income of $249 million translated into diluted earnings per share of $0.54, a 13% boost over the same period one year ago.
Sales rose 6% to $4.7 billion, with comps up 3%. The same comp gain applied to the first nine months of the year, with overall sales up 7% to $13.2 billion year-to-date. All results are for continuing operations.
TJX president and ceo Carol Meyrowitz allowed herself to enjoy this observation: “The 13% increase in earnings per share from continuing operations was achieved on top of a very strong 50% increase last year, clearly demonstrating our ability to deliver sustained earnings growth, even in difficult environments and against tough comparisons.”
Meyrowitz added, “We enter the fourth quarter with very clean, fresh inventories, and significantly more liquidity than at this time last year.”
Home furnishings are an apparent success story at TJX.
The company’s segment breakouts show the 287-store HomeGoods chain is outpacing the mainline Marmaxx (T.J. Maxx and Marshalls) division, which has 1,628 stores. On a comp sales basis, Marmaxx was actually down 1% for the quarter, while HomeGoods comps climbed 4%.
And while the Marmaxx unit generated $309 million in profit, down 1% from a year ago, the story at HomeGoods was a 42% leap in profit, to $25 million. Sales at HomeGoods rose more than 10%, to $372 million, while Marmaxx sales edged up 2%, to $3 billion.
The other major driver at TJX is international operations. The Canadian division, consisting of 190 Winners and 71 HomeSense units, scored 15% comps (U.S. – the Canadian$ uptick was 5%), while the U.K.-based T.K. Maxx, with 225 stores, registered a 13% gain in comps (U.S. – the gain in pounds was 6%).
The company noted that through the first nine months of the fiscal year it has taken a total of $130 million in after-tax charges for costs related to the “Computer Intrusion” that resulted in millions of at-risk consumer identities. That is equivalent to about 1% of sales, year-to-date.
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