Lower sales from the HomeGoods operation proved a drag on TJX Cos. revenue in the third quarter, but the company still managed to beat a Wall Street earnings estimate.
In the third quarter of fiscal 2023, the TJX Cos. posted net income of $1.06 billion, or 91 cents per diluted share including a five cents tax benefit, versus $1.02 billion, or 84 cents per diluted share, in the year-prior period. With the benefit excluded, TJX still beat a Yahoo Finance-published analyst consensus estimate for earnings per share, which was for 80 cents, but fell short of a revenue estimate of $12.3 billion.
Comparable sales for banners in the United States slipped 2%, the company reported. Comps at Marmaxx, including T.J. Maxx and Marshalls, were up 3% while comps at HomeGoods slid 16%. Net sales increased 3% at Marmaxx, decreased 14% at HomeGoods, decreased 1% at TJX Canada and decreased 16% at TJX International.
Net sales were $12.17 billion, down 3% from the year-before quarter.
Ernie Herrman, TJX president and CEO, said that the company’s third quarter benefited from strong apparel sales and, looking forward through the holiday season, he noted that the company, given the off-price model employed and lots of available goods, is well positioned to serve a consumer pressured by the current economic environment.
Goldbenberg, in the conference call, said average TJX basket was up and traffic was down in the United States, but he added traffic strengthened as the third quarter progressed and was better than the second quarter. HomeGoods margins strengthened, but comps fell against a period of strong growth in household categories across retailing, which can be associated with the COVID-19 pandemic. HomeGoods average basket increased slightly, he said.
In announcing the financial results, Herrman said, “I am very pleased with our third quarter performance. U.S. comparable store sales exceeded our expectations, and overall pretax margin, merchandise margin, and earnings per share were strong. I am particularly pleased with the results at our Marmaxx division, which delivered a 3% comp sales increase, driven by a strong increase in its apparel business. Across our geographies, our values and exciting, treasure-hunt shopping experience continued to resonate with consumers throughout the quarter. Looking forward, while not immune to macro factors, we are convinced that our flexible business model and value proposition will continue to be tremendous advantages, as they have been for more than four decades and through many kinds of retail and economic environments. We are excited about the abundance of deals we see in the marketplace for quality, branded product. Throughout the holiday season, we will be flowing fresh and enticing gift-giving assortments to our stores and online to appeal to our wide customer demographic, and we will be emphasizing our value leadership in our marketing. We remain focused on our long-term vision to become an increasingly profitable, $60-billion-plus revenue company.”
