TJX Posts Slowest Sales Growth Since 2009 -- Update
November 14 2017 - 10:58AM
Dow Jones News
By Cara Lombardo
Discount retailer TJX Cos., which operates TJ Maxx, Marshalls
and HomeGoods stores, didn't increase its same-store sales for the
first time since 2009, a sign that the off-price chains aren't
immune to broader forces reshaping 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%.
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%.
Chief Executive Ernie Herrman said in prepared remarks that
sales have already improved "as the weather turned more
seasonable."
Shares in the company, down 5.8% so far this year, dropped 3.3%
to $68.33 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.
Write to Cara Lombardo at cara.lombardo@wsj.com
(END) Dow Jones Newswires
November 14, 2017 10:43 ET (15:43 GMT)
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