TJX Breaks Eight-Year Sales Growth Streak -- 2nd Update
November 14 2017 - 01:32PM
Dow Jones News
By Cara Lombardo
TJX Cos., which operates TJ Maxx, Marshalls and HomeGoods
stores, didn't increase its same-store sales for the first time
since 2009, a rare miss for a company that has avoided many of the
problems weighing down the retail sector.
TJX blamed hurricanes and warmer-than-expected weather for the
same-store sales decline in its biggest unit, which includes TJ
Maxx and Marshalls, and flat growth overall in its third quarter. A
year earlier, the metric grew by 5%.
On a conference call with analysts Tuesday, executives said
sales would have been 2% higher excluding the impact from the
hurricanes. Chief Executive Ernie Herrman said the company "could
have done a better job in certain apparel categories," which also
hurt sales. He said, however, that sales improved as the weather
turned colder in late October, and that foot traffic increased
across all major divisions during the period.
"Prior to the hurricanes and unseasonable weather, we were
tracking better," Mr. Herrman said. "We had high hopes and then we
got derailed."
Results have been mixed among U.S. retailers ahead of the key
holiday shopping season. Last week, Macy's Inc.'s same-store sales
fell 4% in its latest quarter, while Kohl's Corp. surprised
analysts with a slight increase. Nordstrom Inc. reported a decline
in overall same-store sales but a slight increase at Nordstrom Rack
stores.
Analysts from Consensus Metrix had expected TJX's overall
same-store sales to increase 2.3%. As many department stores have
struggled to grow sales with more shopping being done online, TJX
had for years bucked the trend, finding a niche alongside Nordstrom
Rack as a low-cost alternative for increasingly price-conscious
consumers.
The last time overall same-store sales didn't increase was the
fiscal fourth quarter of 2009 when sales dropped 2%.
Mr. Herrman said the apparel issues had to do with the selection
of goods by the company's merchants, adding that in some areas the
fashion was too edgy. The company also made a conscious decision to
hold off on bringing in cold-weather apparel and may have waited
too long, he said.
Shares in the company, down 5.8% so far this year, dropped 4.9%
to $67.24 in early trading.
Analysts had expected HomeGoods to contribute a 4% same-store
sales increase and TJ Maxx and Marshalls to post a 1.7% rise.
Instead, HomeGoods sales rose 3% and TJ Maxx and Marshalls sales
slid 1%. Same-store sales rose 4% at stores in Canada and 1% at
stores in Europe and Australia.
The Massachusetts-based company also missed revenue estimates in
its latest quarter, but earnings were in line with analysts'
expectations. For the third quarter, TJX reported a profit of $641
million, or $1 a share, up from $549.8 million, or 83 cents, a year
earlier.
Revenue rose 7% to $8.76 billion. Analysts surveyed by Thomson
Reuters had expected revenue of $8.86 billion.
Suzanne Kapner contributed to this article.
Write to Cara Lombardo at cara.lombardo@wsj.com
(END) Dow Jones Newswires
November 14, 2017 13:17 ET (18:17 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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