The TJX Companies Inc. shares are in the red today — down 3.4 percent to $68.38 as of 10:45 a.m. ET — after the firm posted third-quarter sales that fell short of expectations.
As has been the case for many retailers in Q3, the owner of Home Goods and off-price sellers TJ Maxx and Marshalls said its performance during the period was impacted when Hurricanes Irma, Harvey and Maria made landfall in Texas, Florida and Puerto Rico, repectively.
“Certainly, the hurricanes had a negative impact during the quarter,” said TJX president and CEO Ernie Herrman. “Our greatest concern is the well-being of our associates, their families, our customers and everyone affected by these natural disasters, and our hearts go out to the people who have been impacted.”
Still, the company’s sales increased 6 percent to $8.8 billion but were just below market watchers’ forecast for sales of $8.9 billion. Comparable sales remained flat compared with the previous year’s 5 percent gain.
Herrman noted that TJX’s performance was also hit by warmer temperatures in the U.S., which reduced demand for colder-weather apparel.
“While sales were not as strong as we would have liked, we were pleased that sales trends at Marmaxx improved as the weather turned more seasonable,” he added. “Further, customer traffic, or transactions, were strong and up at every major division. Importantly, our consolidated merchandise margin increased, which we believe speaks to the flexibility of our off-price business model.”
Q3 profits gained 16 percent year-over-year to $641.4 million, or $1 per diluted share, which was in line with analysts’ expectations.
Looking ahead, Herrman said the fourth quarter is “off to a strong start” for TJ Maxx and Marshalls — which continue to generally outperform many of their retail peers amid challenging times.
“We see numerous opportunities for the holiday selling season across our retail banners,” TJX’s chief said. “We have excellent inventory liquidity to capitalize on the plentiful opportunities we are seeing for quality branded merchandise in the marketplace … We have many initiatives underway to drive sales and traffic, and are excited about our marketing campaigns.”