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6 Months : From Sep 2017 to Mar 2018
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 email@example.com
(END) Dow Jones Newswires
November 14, 2017 13:17 ET (18:17 GMT)
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