TJX profits up on Marmaxx strength

By Don Hogsett -- Home Textiles Today, 5/24/2004 12:00:00 AM

FRAMINGHAM, MASS. —

Helped by a better-than-expected sales and earnings performance at its core Marmaxx retail group, where operating profits shot up 40 percent, first-quarter earnings at parent The TJX Companies rocketed up 48.1 percent, to $168.1 million from $113.5 million last year.

Sales at the off-price giant soared 20.2 percent, to $3.4 billion from $2.8 billion last year, helped by a 28 percent increase at HomeGoods, and a 12.6 percent gain at Marmaxx. Same-store sales improved 8 percent.

Driving the bottom-line improvement, in addition to the stronger sales, TJX bulked up margins, pared costs and held a tight rein on inventories.

Edmond English, president and CEO, said, "We are extremely pleased with our strong first quarter performance, as we achieved top- and bottom-line results that were even greater than the significant year-over-year increases we had planned. We saw great customer response to fresh, spring women's apparel, and continued benefit from our strategy of buying close to need, which helped drive strong comparable store sales and merchandise margins.

"This, along with disciplined expense management, led to significant bottom-line margin expansion. As we enter the second quarter, our inventories are in great shape, and we are well-positioned to take advantage of the numerous in-season buying opportunities in the marketplace."

In the core Marmaxx franchise, sales and earnings both rebounded from depressed year-ago levels, when harsh spring weather hampered business. "Segment profit increased 40 percent to $272 million, well above plan, and segment profit margin reached 11.2 percent, well ahead of expectations," said English.

At HomeGoods, said English, "sales increased 28 percent and comparable-store sales increased 4 percent. Segment profit increased 14 percent above last year to $5 million. HomeGoods' first-quarter results were impacted by a weak comp-store sales performance in April, which was driven by our lighter-than-optimal summer, seasonal inventories, which were in high demand. That said, despite the shortfall in sales, we are pleased with HomeGoods' first quarter growth and continue to be very excited about this unique concept, which offers great values on a rapidly changing assortment of home fashions."

TJX Companies Inc.

First quarter segment results