Despite Sales Gains, TJX Profits Slide

By Don Hogsett -- Home Textiles Today, 2/28/2005 12:00:00 AM

Framingham, Mass. —

Losing ground or losing money in five of its six operating units, despite steady sales growth, diversified retailer TJX Companies Inc. saw fourth quarter profits slide 25.9 percent, to $176.9 million from $238.7 million last year, an earnings shortfall of more than $61 million.

While earnings may have headed south, all the sales arrows were pointing up, and the retailer boosted sales in the closing quarter by 5.4 percent, to $4.3 billion from $4.1 billion, helped by a strong performance at two of its home fashions units, HomeGoods in the U.S. market and HomeSense in Canada. Sales might have climbed even higher, but this year's fourth quarter included one less week of sales than a year ago.

In a lift to the top line, the HomeGoods sales improved 9.9 percent, to $315.7 million from $287.3 million last year. And for all of last year, HomeGoods burst through the billion-dollar market, putting up $1 billion in sales, up 15.6 percent from $876.5 million. But for all the growth in sales, the business was a drag on profits, with earnings plunging by 60.1 percent, to $9.1 million from $22.8 million a year ago.

North of the border, the combination of Winners and HomeSense drove sales higher by 8.1 percent, to $371.9 million from $344.2 million. But profits were just as hard to come by in Canada as in the U.S., and earnings tumbled by 31.1 percent, to $27.9 million.

Sales were virtually flat at Marmaxx, the locomotive that pulls the rest of the train, edging up just 0.2 percent, to $3.0 billion. Marmaxx profits dropped off by 9.5 percent, to $281.5 million from $311.1 million.

The TJX Companies Inc.

TJX Fourth Quarter Segment Results