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TJX: HomeGoods brand ‘more and more powerful'

Company kicks off fiscal 2013 with boffo Q1

Framingham, Mass. - Reflecting on the strong first quarter, TJX ceo talked up the HomeGoods division during the company's quarterly conference call this morning.
HomeGoods "is becoming a more and more powerful brand every day," said ceo Carol Meyrowitz. "Customers cannot stop talking about how much they love HomeGoods. We have over 100 markets in the U.S. where we operate a TJMaxx or Marshalls without a HomeGoods store" - presenting new opportunities for the nameplate's expansion.

By the end of Q1, HomeGoods' store count had grown to 383. By comparison, TJX currently operates 990 units and Marshalls is up to 888.

In the U.S. segment, first quarter results were "outstanding," Meyrowitz said. Marmaxx delivered a 10.3% sales increase to $3.9 billion and an 8% comp over last year's 4%. HomeGoods' sales jumped 18.5% to $359 million with a 9% comp increase on top of last year's 6% gain.

Canada, which had its share of struggles in earlier quarters, is making a turn around. The division's Winners and HomeSense nameplates together generated an 8% sales increase to $640 million as well as a 6% comp versus a (3.0) comp decline in 2011's Q1.

Total company sales increased 11% to $5.8 billion and consolidated comparable store sales were up 8%.

Net income for the first quarter ended April 28, climbed 41% to $419 million, or 55 cents per share.

Meyrowitz reiterated - as she has said in recent earnings calls - that TJX Cos. can grow to become a $40 billion company or larger.

With customer transactions up in the mid teens over previous years and a "dramatically widening" demographic reach, TJX Cos.' latest customer research shows it is "attracting younger customers as we grow our customer base for the future," Meyrotwitz explained.

But the research also shows that the company's market penetration "is still well below most U.S. department stores, which translates to tens of millions of untapped consumers in the U.S. alone," she added.

Hence, TJX Cos. is ramping up its store remodel program and investing in its supply chain - among other major efforts - to operate the business "leaner and faster" on the back end.

For the fiscal year, TJX raised its guidance for earnings per share in the range of $2.27 to $2.37, compared with $1.93 in earnings per share in fiscal 2012. Consolidated comps are expected to grow 2% to 3%.


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