The TJX Companies Inc. delivered a solid earnings and sales beat in the first quarter — offering some proof that shoppers are returning to stores amid the government’s fiscal stimulus and a rapid vaccine rollout.
For the three months ended May 1, the off-pricer logged profits of $534 million, or earnings per share of 44 cents, compared with the prior year’s loss of $887 million, or loss per share of 74 cents. Wall Street had anticipated earnings of 31 cents per share. Revenues shot up 129% to $10.1 billion, surging well past consensus bets of $8.62 billion. (It improved 9% from the first quarter of its fiscal 2020 period.)
Overall “open-only” comps rose 16%. (The measure was defined as the increase or decrease of sales at stores for the days they were open in Q1 2022 against sales for those same days in Q1 2020, which the company suggested was a “more useful comparison” than Q1 2021.) HomeGoods saw a “phenomenal” performance, advancing 40%, while the TJ Maxx and Marshalls banners recorded a 12% gain. Internationally, sales at its Canada division climbed 9%, while Europe and Australia jumped 11%.
“We also saw strong open-only comp store sales increases in many other categories and positive open-only comp store sales in overall apparel, which we believe benefitted from consumers beginning to resume more normal activities,” added president and CEO Ernie Herrman.
The financial results, according to TJX, were affected by brick-and-mortar closures: Although its outposts in the United States were open, locations in Europe and Canada were shuttered for roughly 76% and 25% of the quarter, respectively. In total, the retail group’s units were closed for approximately 14% of the three-month period. It estimated that such temporary shutdowns may have cost it $1.1 billion to $1.2 billion in lost sales and contributed to a negative impact on earnings per share of between 21 cents to 24 cents.
“Our U.S. divisions delivered outstanding double-digit open-only comp store sales increases, and sales at our international divisions were very strong when their stores were permitted to be open,” Herrman explained. “Clearly, our treasure-hunt shopping experience, eclectic mix of merchandise, and great brands and values continue to resonate with shoppers across our geographies.”
Today, about 300 of TJX’s stores are still shuttered — all of them in Canada and Europe — due to government mandates related to the COVID-19 pandemic. It projected that its outposts would stay closed for a forecasted 17% and 7% of the second quarter.
Herrman suggested that, at the start of Q2 2022, open-only comp trends “remain similar” to the first quarter. “While the environment remains uncertain, particularly internationally,” he added, “we are convinced we are strongly positioned as we emerge from this health crisis. Looking ahead, we see numerous opportunities to capture additional market share around the world and are excited about the runway for growth we see for TJX.”