- TJX Companies – owner of the TJMaxx, HomeGoods, and Marshalls brands – reported first-quarter earnings on Thursday that showed it’s seeing “pent-up demand” from consumers as it begins to reopen its stores.
- The off-price merchandiser reported its fiscal first-quarter earnings, which missed analyst estimates on both the top and bottom line.
- Despite reporting revenues down more than 50% year-over-year in the quarter, investors bid up TJX as much as 9% on Thursday after digesting the results.
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TJX Companies owns brands like TJMaxx, HomeGoods, and Marshalls.
The company closed all of its stores, distribution centres, and its ecommerce operations in mid-March amid the coronavirus pandemic, which resulted in a more than 50% decline in revenue year-over-year for the quarter.
Here are the key numbers:
Revenue: $US4.41 billion, versus the $US5.13 billion estimateAdjusted earnings per share: -$US0.74, versus the -$US0.12 estimate
The company has started to reopen its stores earlier this month, and to date has reopened more than 1,600 of its stores worldwide.
Of those stores that have reopened, TJX is seeing an increase in sales, according to the company’s earnings release.
“Initial sales overall have been above last year’s sales across all states and countries for the over 1,100 stores that have been reopened for at least a week,” the company said.
TJX CEO Ernie Herrman said the company is seeing pent-up demand from consumers after it was temporarily shut down for 6 weeks.
“We believe this very strong start speaks to our compelling value proposition and the appeal of our treasure-hunt shopping experience, as well as pent-up demand,” Herrman said.
Anecdotal evidence backs up what Herrman said in TJX’s earnings release.
David Schawel, CIO of Family Management Corporation and Twitter handle @DavidSchawel, tweeted on May 17: “I’ve never seen so many people line up to shop at TJ Maxx. The American consumer twitches when they’re away from Home Depot/TJ Maxx for too long.”
The company also said it is seeing plenty of off-price buying opportunities as retailers look to offload merchandise in bulk due to surging inventories caused by the drop in consumer shopping over the past few months.
“We are currently seeing plentiful off-price buying opportunities, which, as we look to the remainder of the year, gives us confidence in having excellent brands and quality merchandise available to us. With our flexible business model and ability to adapt quickly to changing market conditions and customer preferences, we will be pursuing these buying opportunities,” Herrman added.
Shares of TJX surged as much as 8.7% to $US55.29 in Thursday trading.
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