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February 24, 2022

TJX Misses Q4 Street Estimates Despite Strong Comps

By Mike Duff

Contributing Editor

Despite solid comparable-store sales, TJX Cos. fell short of Wall Street sales and earnings expectations in its fourth quarter.

For the fiscal 2022 fourth quarter ended January 29, the TJX posted net income of $940.2 million, or 78 cents per diluted share, versus $325.5 million, or 27 cents per share, in the year-before quarter. Net income for the pre-COVID-19 fiscal 2020 quarter was $984.8 million, or 81 cents per diluted share. 

TJX missed a MarketBeat-published analyst consensus estimate of 91 cents per diluted share and fell short of a $14.19 billion sales estimate as well.

Net sales for the quarter were up 27% to $13.85 billion from the fiscal 2021 and 14% from the fiscal 2020 period, the company reported. Open-only comparable store sales in the United States advanced 13% versus fiscal 2020, with a 10% increase company-wide.

For fiscal 2022 versus fiscal 2020, company-wide, Marmaxx comps, including those from T.J. Maxx and Marshalls, increased 10% in the quarter, while comps for HomeGoods increased 22%. TJX Canada comps increased 1% and those at TJX International slipped 2%.

For full-year fiscal 2022, net income was $3.28 billion, or $2.70 per diluted share, versus $90.5 million, or seven cents per diluted share, in the year-prior quarter. Net income for fiscal 2020 was $3.27 billion, or $2.67 per diluted share.

Adjusted for the effect of a second-quarter debt extinguishment charge, fiscal 2022 diluted earnings per share were $2.85

For the full-year fiscal 2022, net sales were $48.55 billion, up 51% versus fiscal 2021 and 16% from fiscal 2020, the company stated. U.S. open-only comp-store sales advanced 17% compared to fiscal 2020 with a 15% increase company-wide.

Open-only comps are based on days comparable stores remained open in the fourth quarter and full-year during fiscal 2022 and fiscal 2020. They exclude e-commerce and their calculation is on a constant currency basis.

In pointing to the highlights of a challenging quarter, Ernie Hermann, TJX CEO, said in a conference call that comps at U.S. home banners HomeGoods and Homesense, and in-home departments in other stores were excellent. He cited the combination of gifts and values available at TJX banners in the holiday season for the generally strong general comp results.

In the conference call, Scott Goldenberg, TJX CFO, pointed out that TJX had a substantial fourth-quarter increase in average basket across all divisions while U.S. customer traffic gained slightly.

Herrman also said that he saw inflation as an opportunity for TJX, which had been selectively adjusting retails. However, TJX sees it has a chance to take a more strategic approach to pricing going forward, checking against competition and positioning itself to advantage based on established goals.

Hermann said in announcing the financial results, “For the year, U.S. open-only comp sales were up 17% and overall open-only comp-store sales increased 15% over Fiscal 2020, with double-digit increases for both the U.S. businesses and overall TJX every quarter of the year. For the fourth quarter, we saw a 13% open-only comp sales increase for the U.S. and a 10% increase in overall open-only comps, both over 6% comp sales increases in the fourth quarter of fiscal 2020. Fourth-quarter sales were trending higher before the surges in Omicron. During the holiday selling season and throughout the year, our shoppers responded to our amazing brands, excellent values and inspiring treasure hunt shopping experience. Our home businesses across all of our divisions delivered phenomenal open-only comp-store sales performance, and overall apparel open-only comp-store sales increased high-single digits in fiscal 2022. While freight and wage cost pressures remain elevated, we are pleased that our retail pricing strategy is working very well. This gives us confidence in improving our profitability when the macro environment normalizes while continuing to offer exceptional values to customers every day. In a year when we grew sales to nearly $50 billion, we are very confident in our goal of TJX becoming an increasingly profitable, $60 billion-plus company.”

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