TJX Testing New Home Formats
February 25, 2008-- Home Textiles Today,
Stressing that its own execution and not the economy was to blame for soft sales in the T.J. Maxx and Marshalls stores' home category during the fourth quarter, off-price retailer TJX Companies outlined plans to improve the segment — including a new store prototype now undergoing tests — during the company's earnings call.
"We expect to see home improve in the first half with more opportunity in the back half of the year," said Carol Meyrowitz, president and ceo of the 2,563-unit retailer. "We believe this is an execution issue and we are addressing it," she stressed, adding the merchandise mix was largely to blame: "We were just too mundane and too LY [last year] in our seasonal, and that hurt in the fourth quarter…We believe our own missteps were on execution, specifically in seasonal holiday product, which led to comp weakness."
Even with the disappointment in home categories in the Marmaxx (T.J. Maxx and Marshsalls) unit, TJX posted a year of solid results.
TJX 2007 net earnings of $771.8 million were up 4.6% over $738.0 million in the year prior. Sales were up 7% to $18.6 billion, while comps rose 4% in 2007.
Meyrowitz also lauded the company's HomeGoods format. "HomeGoods' solid performance in 2007 bucked the weak trends of the home industry in other retailers," she said. "The HomeGoods organization drove strong comp sales over solid comps in the previous years."
HomeGoods, currently with a store count of 289, is being considered for growth by 300 additional stores "over time," Meyrowitz noted, and potentially for a larger, 40,000-square-foot box, currently being tested.
Overall, she concluded, the company envisions the potential to grow by an additional 1,500 to 2,000 stores within its current markets.
The TJX Companies, Inc.
|Qtr. 1/26 ($millions)||2007||2006||% change|
a.Results include after-tax charges of $119 million, or $.25 per share, in fiscal 2008 and $3 million (which did not change full-year earnings per share) in fiscal 2007 related to the previously reported unauthorized computer intrusions. Excluding these charges, adjusted diluted earnings per share from continuing operations for fiscal 2008 were $1.91, a 17% increase over $1.63 for the prior year.
|Oper. Income (EBIT)||486.6||380.0||28.0|
|Per share (diluted)||0.66||0.51||29.4|
|Average gross margin||24.4%||23.0%||—|
|Oper. Income (EBIT)||1,242.7||1,246.8||0.0|
|Per share (diluted)||1.66a||1.63a||1.8|
|Average gross margin||24.5%||24.1%||—|