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TJX Opens Back Up, But Sees ‘Open-only’ Comp Sales Slipping

Evan Clark
·2 min read

Offprice giant TJX Cos. Inc. opened back up in the second quarter, but is signaling an uneven restart in its business as the world continues to grapple with the coronavirus.

The parent to TJ Maxx and Marshalls said sales fell 31.8 percent for the quarter ended Aug. 1 to $6.7 billion from $9.8 billion a year earlier.

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The company’s 4,557-door fleet was closed for about a third of the quarter, meaning sales were more or less on par with a year ago when the stores were open.

TJX said its “open-only comp sales” — comparable-store sales adjusted to represent just when those were open — slipped 3 percent during the quarter.

However, the company is planning for its open-only comp sales to fall 10 percent to 20 percent for the third quarter.

“This is in-line with the sales trends it has seen since the middle of July and through August month-to-date,” the retailer said. “The company’s wide sales plan range reflects the uncertainty of the current environment and the difficulty in forecasting the impact of the global pandemic on consumer behavior, demand and traffic, in addition to the anticipated slower back-to-school selling season.”

Investors took a cautious stance and sent shares of the firm down 4.6 percent to $54.80 in premarket trading, although the firm still has a market capitalization of over $65 billion.

Second-quarter losses tallied $214 million, down from earnings of $759 million a year earlier — a nearly $1 billion swing that illustrates just how hard the offpricer, which has a relatively small e-commerce operation, was hit by the coronavirus shutdown.

The retailer — one of the largest apparel merchants in the world — has fortified its balance sheet during the crisis and has $6.6 billion in cash on hand.

“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,” said Ernie Herrman, chief executive officer.

“Further, we saw especially strong sales at our HomeGoods and Homesense chains, as well as the home departments within our other chains, across geographies,” Herrman said. “Specifically, HomeGoods delivered double-digit, open-only comp store sales increases each month of the quarter. 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. We have been a trusted, value leader for more than 40 years, and we see a long runway of successful growth ahead for TJX.”