TJX's lean inventories to get leaner

Retail Editor 5, November 16, 2010

Framingham, Mass. - TJX Cos. attributed its strong profit performance to pared down inventories - which generated faster turns with better margins - and said it thinks it can go even leaner.
"As lean as we are, I still believe we have further opportunities to bring inventory down," president and ceo Carol Meyrowitz told analysts during today's third quarter conference call. "We entered the fourth quarter with even leaner inventories and more open-to-buy than last year."
TJX report net income up 14% -- on top of 40% growth in the year-ago quarter - to $372 million, or 92 cents per share. Although average ticket is still slightly down, sales rose 5% to $5.5 billion, with consolidated comps up 1%.
Meyrowitz also said TJX Cos. will pick up the pace next year on openings of Marmaxx nameplates and HomeGoods stores, both of which had good third quarters.
Marmaxx comps rose 1%, on top of a year-ago 9% increase, with $3.5 billion in total sales for the division. Home Goods comps were up 3% against a 13% increase last year with a sales volume of $480 million. Comps at A.J. Wright fell 2% with $198 million in sales, primarily the result of unseasonably warm weather, she said.
Asked about the impact of higher cotton prices, Meyorwitz said they are a good thing.
"Average ticket going up is certainly a benefit to our comp and our average ticket," she said.
Based on third quarter results, the company raised its guidance for the full year, projecting an jump in earnings per share of 17% to 19%.
The company did not raise its outlook on the fourth quarter, continuing to believe earnings will be flat to down 5%.
"The fourth quarter is up against extremely strong results from last year," noted Meyerwitz.

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 Current issue for September 2017

See the September 2017 issue of Home & Textiles Today. In this issue, we look at the Attack of the Killer Third Tier: Monster off-pricers are climbing to the top of the food chain, plus New Products: 40 pages of new products debuting at the New York Home Fashions Market; Home Stores: TJX unveils first U.S. HomeSense store; Clicks to Bricks: Boll & Branch moves from digital to physical retailing; and much more... See details!