Open-only comparable-store sales were up 16% from a year earlier.
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TJX ‘s latest earnings report crushed expectations, but that wasn’t enough to assuage investors’ concerns about pandemic-related struggles outside of the U.S.
Shares slid on a rough day for the broader market. TJX stock was down 3.1% to $68.88 shortly after the market opened on Wednesday. The S&P 500 index was down 1.2%
The parent of off-price stores like T.J. Maxx, Marshalls, and HomeGoods (ticker: TJX) reported fiscal first-quarter earnings of 44 cents a share, beating Wall Street’s consensus estimates at 31 cents a share, according to FactSet. Sales of $10.09 billion were up 129% from last year’s pandemic-impacted period, and up 9% from the comparable quarter in 2019. Wall Street analysts had expected sales of $8.61 billion, according to FactSet.
Open-only comparable-store sales, an adjusted metric that compares sales on days existing stores were open to their sales on the same days in 2019, were up 16% from the April quarter two years ago.
Though all of its U.S. stores were back open during the quarter, TJX said 14% of its stores globally were closed due to Covid-19, including 76% of store days in Europe and 25% of store days in Canada. TJX said such store closures hurt sales by about $1.1 billion and reduced earnings by between 21 cents and 24 cents a share.
The company didn’t provide formal financial forecasts for the fiscal second quarter, but CEO Ernie Herrman said that second-quarter open-only comparable- store sale trends have been similar to those in the first quarter.
“While the environment remains uncertain, particularly internationally, we are convinced we are strongly positioned as we emerge from this health crisis,” he said. “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.”.
BMO Capital Markets analyst Simeon Siegel wrote in a note to clients Wednesday that international pressure was worse than expected, but that the company still managed to report better-than-expected sales and gross margins. That has helped the company pay down debt and shore up its balance sheet, Siegel added. He maintained an Outperform rating and $80 price target.
“We continue to expect TJX’s importance in the retail ecosystem to grow for both shoppers and vendors, driving meaningful long-term share opportunity,” Siegel wrote.
MKM Partners analyst Roxanne Meyer was upbeat as well, saying she sees the dip in the stock as a buying opportunity. She has a Buy rating on the stock and a target of $79 for the price.
Sales benefited from demand for apparel, and, especially, home-related goods, she said. “While we believe sales were favorably impacted by stimulus, it is impressive to see that open-only comps in 2Q are in line with 1Q performance, despite what we believe to be tougher open-only compares.”
Write to Connor Smith at [email protected]
