The TJX Cos. is doing its best to shake off the effects of the COVID-19 pandemic, and its HomeGoods division has been providing a particular boost while household products generally have made a significant contribution to financial gains.
In announcing first-quarter results on May 19 Ernie Herrman, TJX president and CEO, said that the company has gained from years of investment in its home-related operations. Although it was not among the essential retailers that could remain open in the United States during the pandemic and despite the fact it has lagged in e-commerce development, TJX shared something with its competitors who continued welcoming shoppers in the pandemic: Pre-pandemic investments proved fortunate in the coronavirus crisis, especially, in this case, those behind the build-out of home products operations not only at the company’s HomeGoods and Homesense banners but also as at T.J. Maxx and Marshalls.
In a conference call covering first quarter results, transcribed by SeekingAlpha, Herrman stated, “We have been aggressively investing in the growth of our home division for many years and are convinced we are set up very well to build upon our market leadership position in the United States.”
Further, he said, “We strengthened our relationships with many of our vendors and have added thousands of new vendors for apparel and home products over the past year. All of this allows us to offer a fresh and exciting mix of quality-branded merchandise to our shoppers every time they visit.”
Herrman added that the home business has not tailed off even as TJX apparel sales have gained recently.
The off-price retailer turned around it’s previous year loss in the quarter, ended May 1. TJX detailed how sales are gaining as it works to get back to a more normal footing compared to the situation a year earlier when shopping restrictions in various regions forced the company to close its stores for half the period.
First-quarter net income was $533.9 million and diluted earnings per share were 44 cents versus a net loss of $887.5 million and 74 cents per diluted share in the coronavirus-hit period a year before.
Net sales for the first quarter of were $10.1 billion, an increase of 129% versus the year-earlier period. In another point of comparison made by TJX, net sales for the first quarter were up 9% versus the same period two years previous, when COVID-19 was not an issue.
First quarter earnings and sales beat Zacks Investment Research estimates of 31 cents and $8.74 billion, respectively.
In addition, TJX calculated comparable-store sales not against the quarter a year prior. Rather, the number is a comparison between comp stores open in the most recent first quarter against comp stores open in the same period in two years before, with TJX stating that the two-year comparison more accurately reflected the company’s condition. So, the company reported a comp gain of 16% in the most recently completed first quarter versus the period two years prior. In the U.S., comps so calculated gained 12% at the Marmaxx division, including the T.J. Maxx and Marshalls operations, and 40% at HomeGoods. Comps in Canada gained 9% while those in the International division, including operations in Europe and Australia, increased 11%. Comps as presented don’t include e-commerce results, TJX pointed out.
In announcing the financial results, Herrman noted, “Once again, we saw phenomenal performance in our home businesses across all of our divisions.”
It’s work noting that TJX locations outside the U.S. still suffered pandemic-related closures in the first quarter, with 2% of stores in Australia, 25% in Canada and 76% in Europe shuttered, according to the company. Those totaled 14% of the store portfolio.
In the quarter, TJX kept opening stores, launching 22 HomeGoods locations, for example, bringing the store total to 843, and five U.S. Homesense locations, bringing the store total to 39. It also added 11 T.J. Maxx locations, to bring the store total to 1,282, 16 Marshalls stores, to bring the store total to 1,147, and four Sierra stores, to bring the store total to 52.
