TJ Maxx Parent’s Store Closures in Q4 May Have Caused $1.05 Billion in Lost Sales

The TJX Companies Inc. fell short of earnings and sales expectations as renewed COVID-19-related restrictions kept many of its stores closed during the fourth quarter.

For the three months ended Jan. 30, the off-price retail group logged diluted earnings of 27 cents per share, compared with 81 cents last year. On an adjusted basis, EPS amounted to about 50 cents per share compared with Wall Street’s bet of 62 cents in earnings per share. Revenues fell to $10.94 billion from the prior year’s $12.21 billion, compared with analysts’ predictions of $11.48 billion.

Overall, TJX 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 Q4 2021 against sales for those same days in Q4 2020. It explained that the financial results were affected by temporary shutdowns: While its brick-and-mortar fleet in the United States remained “generally open” the entire quarter, stores in Europe and Canada were closed for a respective 63% and 32% of the period. In total, the Framingham, Mass.-based company had locations shuttered for approximately 13% of Q4 2021.

According to TJX, the European and Canadian closures may have resulted in roughly $950 million to $1.05 billion in lost sales. Based on management’s forecasts of profit dollars on this range of lost sales, the retail group estimated that Q4 2021 earnings per share were negatively impacted by approximately 18 cents to 21 cents.

Currently, about 690 of the company’s portfolio of TJ Maxx, Marshalls and HomeGoods stores remain closed due to government-mandated restrictions on nonessential businesses. The vast majority of these outposts, it shared, are in Europe, where TJX expects units to be temporarily shuttered for 67% of the first three months of the 2022 fiscal year. In total, based on current lockdowns, the company predicted that its fleet will be closed for 11% of the next quarter.

Still, president and CEO Ernie Herrman was positive on the performance of the business: “Our brands, values and exciting gift assortments resonated with customers, and we achieved these results despite numerous COVID-related headwinds. Overall, open-only comp store sales improved each month of the quarter and were positive in January.”

Although open-only comps at Marmaxx — the division including TJ Maxx and Marshalls in the U.S. — dropped 7% in the fourth quarter, HomeGoods recorded a double-digit increase of 12%. TJX’s Canada arm saw a 4% decline in same-store sales, while TJX international grew 2%.

For the first three weeks of Q1 2022, the company shared that overall open-only comp store sales trends were “better” than Q4 2021 despite “unfavorable weather” in the U.S. However, it still expects total sales, pretax margin and earnings per share to be hit by ongoing store closures. It did not provide an outlook for the quarter ahead.

“As we start the new fiscal year, while uncertainty around COVID-19 remains, we feel very good about the strength of the business and our market share opportunities beyond the health crisis,” Herrman added. “We are convinced that our entertaining, treasure-hunt shopping experience; our differentiated, branded merchandise selections; and value proposition will continue to resonate with consumers. We see many opportunities to leverage our flexible business model, gain more customers and continue driving the successful growth of TJX for many years ahead.”

imbox Sponsored

Customer Experience, Revenue Stream and Sustainability Come Wrapped in an IMBOX

Sustainable, footwear protection technology company, IMBOX Protection, is bringing its in-store service to the U.S. market for increased foot traffic and basket size with a new revenue stream.
Learn More

Access exclusive content