The TJX Companies Inc. has posted a mixed second quarter, with bigger-than-expected losses but a beat in overall sales.
For the three months ended Aug. 1, the off-price apparel and home retailer logged a loss of $214 million and a loss per share of 18 cents, which was well below analysts’ forecasts for a loss of 10 cents per share. Revenues declined 31.8% to $6.67 billion but still topped market watchers’ bets of $6.57 billion.
According to the company, its financial results were negatively impacted by the temporary closure of its brick-and-mortar fleet for nearly one third of the quarter due to the coronavirus pandemic. It posted a 3% drop in “open-only” comps, which were defined as the increase or decrease of sales at stores for the days they were open in Q2 2021 against sales for those same days in Q2 2020.
At its Marmaxx division, comprised of TJ Maxx and Marshalls, the Framingham, Mass.-based business saw “open-only” same-store sales down 6%, while HomeGoods climbed 20%. TJX Canada was down 18%, and TJX International fell 1%.
Today, more than 4,500 of TJX’s units across nine countries, as well as multiple distribution and fulfillment centers plus its e-commerce sites, have reopened to the public. The retail group added that it has put in place practices to help protect the health of its employees and customers, including social distancing protocols, access to personal protective equipment, enhanced cleaning efforts and occupancy limits. It has also mandated that shoppers wear face masks in its outposts throughout the United States and Canada, while it said it was following regional governmental face mask requirements in Europe and Australia.
“When we reopened, customer response to our values was beyond what we could have imagined,” president and CEO Ernie Herrman said in a statement. “For the quarter, we were very pleased that both our top and bottom lines well exceeded our internal plans, despite our stores only being open for a little more than two-thirds of the second quarter, and that our merchandise margin was excellent.”
The company ended the second quarter with $6.6 billion in cash and paid off the $1 billion it drew down from its revolving credit facilities in March, when the COVID-19 outbreak swept the U.S. At the beginning of the third quarter, it also increased its borrowing capacity with a new $500 million facility. (TJX does not expect to declare a dividend in Q3 2021 and has suspended its share buyback program.)
“As to the future, we are confident that when more customers are comfortable with in-store shopping, we will be in a great position to continue gaining market share as we have for many years,” Herrman added. “We have been a trusted, value leader for more than 40 years, and we see a long runway of successful growth ahead for TJX.”
Ahead of market open, TJX shares were down nearly 6% to $54.10.