Free Newsletter
Framingham, Mass. – Primarily driven by increases in traffic across all of its nameplates from both new and existing customers shopping more frequently, TJX Cos. beat expectations in the first quarter with significant comps and sales increases.
Net income for the 13-week period, ended April 30, grew 7% to $508.3 million from $474.6 million last year, and a 10% increase in diluted earnings per share to $0.76 versus $0.69.
Net sales were up 10% to $7.5 billion from $6.9 billion, and consolidated comparable store sales increased 7% over last year’s 5% increase.
By division, the company’s largest — Marmaxx – comped up “a very strong” 6%, noted CEO and president Ernie Herrman. Sales grew 8% to $4.9 billion.
“We are very pleased that [the Marmaxx] comp increase was entirely driven by customer traffic and significant gains in units sold,” Herrman added.
HomeGoods comps increased an also “very strong” 9%, also thanks largely to traffic gains, and sales grew 15% to $1.0 billion.
“The enthusiasm of our HomeGoods customers is hard to beat,” Herrman said.
TJX Canada’s 14% comp was called “outstanding” by Herrman. The division – which includes Winners and HomeSense – also posted a 10.6% sales boost to $686 million.
“We are confident that we are growing our customer base and gaining market share,” Herrman said. “We see many opportunities in the U.S. and internationally for continued successful growth…and we have a strategic long-term vision to grow to be a $40 billion company and beyond.”
Among the international growth opportunities TJX Cos. has identified is Trade Secret, its recently acquired business in Australia.
Herrman said the company is in the process of retooling the store to fit TJX’s business model, including the likelihood of adding a HoodGoods-like nameplate to the division sometime soon.
“It is something we are working on as we speak,” he said. “[An all-home store] is also a natural for [Australia].”
Outlining “our major strengths” that differentiate TJX Cos. from its competitors – both bricks-and-mortar and online, Herrman called the company “a global sourcing machine” with “more than 18,000 vendors in 100-plus countries.”
The first quarter representing its 29th consecutive period of comp growth, TJX Cos. is encouraged by the ongoing momentum and has updated its guidance.
For the second quarter, the company expects diluted earnings per share to be in the range of 77 to 79 cents compared to 80 cents last year, and consolidated comparable store sales growth of 2% to 3%.
The company said it has also raised its full-year guidance to reflect its strong first quarter results. For the fiscal year ending January 28, 2017, TJX Cos. now expects diluted earnings per share of $3.35 to $3.42, which would represent a 1% to 3% increase over $3.33 in fiscal 2016, and consolidated comparable store sales growth of 2% to 3%.
Additionally, Herrman noted that there are no store closings planned in 2016 across the entire company. In Q1, TJX Cos. increased its store count by 47 stores to a total of 3,661 total units.
