HomeGoods still looking good to TJX

Framingham, MA — HomeGoods continues to be a standout performer for TJX Cos. Driven by new store openings, total sales rose 17 percent, while segment profit increased 12 percent, Ted English, president and ceo said during the company's first quarter conference call yesterday. Comps for the division were a decidedly more sluggish -1 percent, he reported, reflecting the overall anemic retail environment.

Yet, the company remains bullish on the division and selling in general. English forecast same-store sales at HomeGoods will rise by 5 percent in May, 5 percent in June, 6 percent in July, for a second quarter comp-store increase of 5 percent. Home merchandise, reflected in HomeGoods, as well as in T.J. Maxx, Marshalls and other divisions, represents about 20 percent of TJX's total business, the company stated. Moreover, English stated that it turns "as fast or faster than apparel."

Companywide, TJX reported frist quarter earnings declined 23 percent, while sales were hurt by cold weather from a late winter, rising only 4.6 percent. The company recorded net income of $113.5 million, or $0.22 a share, a drop from $147.1 million, or $0.27 a share from the year-earlier period. Still, earnings fell in line with forecasts. TJX posted sales of $2.78 billion in the quarter, compared to $2.67 billion last year. Comps declined 2 percent.

Lower-than-expected sales combined with exceptional opportunistic buys resulted in ballooning inventories for the retailer, sending them up 16 percent for the quarter. However, English defended the position, stating that they were a necessary part of the company's business plan and had contributed to above-average margins. Moreover, it's enabled the merchant to work closer in-season than usual, he said. "Business has been tough out there, and vendors have released inventories earlier than they would have [typically]," English said.

He argued that while inventories were higher, total commitments were in-line and the company's open-to-buy was in "great shape."

Home & Textiles Today Staff | News & Commentary

 Home Textiles Today is the market-leading brand covering the home and textiles markets, offering a comprehensive package of print and online products. Home & Textiles Today provides industry news, product trends and introductions, exclusive industry research, consumer data, store operations solutions, trade show news and much more.

Featured Video

  • Live From New York: Fashion Comes Across the Pond

    Camera Icon More Videos

Subscribe to
Home & Textiles Today eDaily
Receive the news you need to know about the trends in the industry delivered right to your inbox.

CURRENT ISSUE

HTT Cover October 2017

See the October 2017 issue of Home & Textiles Today. In this issue, we look at the Top 25 Online Retailers.  H&TT's exclusive annual ranking of the biggest online sellers of home textiles finds that while pure play etailers continue to fly, bricks & clicks are digging into omnichannel. See details!