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Soft home rebounds at TJX

Framingham, Mass. – HomeGoods, the 270-store division of TJX Companies, saw first-quarter profits rise nearly 20% -- and soft home helped lead the way, said TJX president and ceo Carol Meyrowitz to analysts this morning.

“Soft home was up about 5%” in the HomeGoods unit, Meyrowitz said, noting, “We are beginning to see top of bed and the sheet business turn around.” She added that the chain’s towel wall also is performing well. HomeGoods, with quarterly sales of $333.2 million, saw profit up 19.6% to $10.2 million. Comps were up 3%, beating the companywide rate of 2%.

Meyrowitz also singled out the HomeGoods Kids initiative, now in 200 stores, as a growing success, and noted that the “Now You Can” ad campaign is showing results.

TJX reported a quarterly sales increase of 6% to $4.1 billion, but income of $162 million was off 1% from the prior-year quarter. Nevertheless for the full year ahead, the company projects earnings from continuing operations (excluding any “computer intrusion” costs) of $1.80 to $1.85: a 10% to 13% increase year-to-year. TJX projects a 3% comp gain.

In the first quarter, missy sportswear was the single biggest disappointment, the company said, due in some part to unseasonably cool and wet spring weather.

Meyrowitz intimated that the uncertain economic climate is not necessarily a bad thing for the 2,500-store off-price leader, and as is customary for TJX executives, she lauded her buying staff for its opportunistic flair. Noting that the chain’s success is built on “intelligent risk-taking” for a merchandise mix that ends up “exciting our customers,” Meyrowitz stated, “It’s not just raining – but it’s pouring merchandising opportunities.”

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