TJX beats plan in Q2 thanks to home and apparel
Joan Gunin -- Home Textiles Today, August 20, 2013
Framingham, Mass. - Up against strong year-over-year comp and earnings-per-share comparisons, TJX Cos. reported better-than-anticipated results in its second quarter, giving the off-price, multi-nameplate retailer cause to raise its guidance for the year.
Home fashions was credited with helping sales post above plan, as the category experienced a 5% increase overall. The HomeGoods chain comped up 8% with a 15% increase in sales to $690 million.
"Both our apparel and home businesses were very strong across the board, so we are very, very proud of that," noted Carol Meyrowitz, ceo, during the retailer's earnings call this morning.
Marmaxx, which carries home and apparel goods, reported a 4% comp gain as well as an 8% increase in sales to $4.3 billion.
The company's total quarterly net income rose 14% to $480 million, with earnings per share up 18% to 66 cemts. Net sales for the 13 weeks increased 8% to $6.4 billion, and comps were up 4% on top of last year's 7% gain.
Year to date, results included: net income of $932 million, up 11%; EPS up 15% to $1.28 from $1.11; sales up 8% to $12.6 billion; and comps up 3% over last year's 8% increase.
Encouraged by its continued strength, especially in the U.S., TJX Cos. is planning expansions of its Marmaxx and HomeGoods businesses as well as is looking at potentially new markets internationally.
"We continue to aggressively grow Marmaxx and HomeGoods," Meyrowitz said, noting that Marmaxx is nearing a count of 2,000 units.
"We believe long-term growth potential for Marmaxx of 2,400 to 2,600 stores is achievable," she continued. "HomeGoods well outperformed our expectations [in the second quarter], and we think we can take it to 760 to 825 stores."
On a related note, TJX Cos. plans to launch its TJMaxx website in controlled mode this fall. While the company views e-commerce as a to its long-term big factor for long-term growth, the business has to date been "extremely successful without e-commerce," Meyrowitz said.
But an online platform can serve as a way to attract new, untapped shoppers to as well as offer 24 hour shopping to new and existing customers.
Looking ahead, TJX's the third quarter "is off to a solid start and we see many opportunities for the second half of the year and beyond," she summed.
For the fiscal year ending Feb. 1, 2014, the company is raising its guidance for diluted earnings per share to $2.74 to $2.80 versus $2.55 in fiscal 2013. Excluding an estimated 8 cent benefit from the 53 weeks in the company's fiscal 2013 calendar, this guidance would represent an 11% to 13% increase over the adjusted $2.47 in fiscal 2013. TJX expects consolidated comparable store sales growth of 2% to 3%.
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