The third quarter was a good one for TJX Cos., which now is focused on promoting itself as a holiday gift destination with plenty of choices for gift-giving shoppers.
The company posted net income in the quarter ended October 30 of $1.02 billion, or 84 cents per diluted share, versus $866.7 million, or 71 cents per diluted share, in the year-previous quarter. In a comparison with results prior to the COVID-19 pandemic, TJX posted a net income of $828.3 million, or 68 cents per diluted share, in the fiscal 2020 period, which occurred in the 2019 calendar year.
TJX beat a Yahoo Finance-published analyst consensus diluted earnings per share estimate of 81 cents and topped a $12.27 billion sales estimate as well.
On an only open basis, which TJX describes as pertaining to stores open in the fiscal 2022 third quarter versus stores open for the same days in fiscal 2020, comparable sales advanced 14% for the company overall. Marmaxx, including T.J. Maxx and Marshalls, was up 11%; HomeGoods up 34%; TJX Canada up 8%; and TXJ International, including Europe and Australia, up 10%. The comp figures are on a constant currency basis and exclude e-commerce sales.
Net sales were $12.53 billion versus $10.12 billion in the 2020 quarter and $10.45 billion in the 2019 period, TJX indicated.
In a conference call, Ernie Herrman, TJX president and CEO, said that the company’s operational flexibility allowed it to expand and contract merchandising categories as displayed in stores to keep racks full and give shoppers product choice. Herrman added he is happy with the third quarter’s pre-tax margin increase, as sales growth and merchandise margin more than offset the macroeconomic headwinds in the market. The company has been buying with longer lead times and feels confident about product flow into stores for the holidays, Herrman said.
Positioned as a gift designation for the holidays, the company’s value proposition should make its stores especially attractive as the year wears down. Marketing is set to showcase each division and its value proposition for consumers while also emphasizing the fresh flow of merchandising that will refresh stores on an ongoing basis through the holidays. The launch of e-commerce at HomeGoods this September will provide consumers with an even greater opportunity to purchase domestic items for the holidays. At the same time, TJX will remain focused on growing its pre-tax margin.
Herrman added TJX saw terrific growth in the home business of each of its banners. HomeGoods enjoyed strong increases in both customer traffic and average basket, with divisional profit dollars up 52% versus fiscal 2020, even if they were down a bit from the year-previous quarter.
Herrman said, “Our home businesses across all of our divisions continued their phenomenal performance, and overall apparel open-only comp store sales increased mid-single digits. I want to recognize the extraordinary work and dedication of our global associates, especially our store and distribution center Associates, who are physically coming into work to serve our customers, and the teams throughout the company that have driven these outstanding results despite the global supply-chain challenges. We are extremely well-positioned for the holiday selling season, and overall open-only comp store sales to start the fourth quarter are up mid-teens… We are in an excellent inventory position, with most of the product needed for the holiday season either on hand or scheduled to arrive at our stores and online in time for the holidays. We are very confident in our ability to continue to gain market share, improve our profitability in the medium to long term, and reach our strategic vision of TJX becoming a $60 billion company.”