HomeGoods a bright spot in Q1 for TJX
Furniture Today Staff -- Furniture Today, May 17, 2011
Framingham, Mass. - The TJX Companies ended its first quarter relieved that it had overcome its harshest year-over-year comparisons with comp and sales increases in its U.S. division at both Marmaxx and HomeGoods.
During the off-price chain's earnings call this morning, ceo Carol Meyrowitz described the company's growth last year as "overwhelming," prompting TJX Cos. to expect its first quarter to be "our toughest comparison for this year."
But now with that behind it and the month of May off to "a very strong start, we are looking forward to the next quarter and rest of 2011."
At Marmaxx, includes T.J. Maxx and Marshalls, comps were up 4% over last year's 10% increase, and sales grew by 7.5% to $3.5 billion. Additionally, customer traffic continued to be up regardless of poor weather in certain regions of the country.
HomeGoods experienced a 6% comp gain on top of a 15% increase last year, and sales increased 10% to $503 million.
"Our sharp execution is driving our strong results [at HomeGoods]," she continued. "We're offering great off-price values and an assortment of goods from around the world."
In Canada, while the harsh weather negatively impacted apparel sales, "our home business performed very well. We're excited about the launch of Marshalls in Canada, where our first five stores are now open. And so far, customer response has been very strong."
When asked by an analyst if the company's recent increase in "pack-aways," or early buys, was triggered by price inflation, Meyrowitz explained the company "is never shy on goods, great goods" regardless of timing, and said the company is reluctant to raise its prices.
"We only do [pack-aways] when we see wonderful deals. It's not about mitigating costs, it's about the product itself," she said, later adding "We're really excited about the product available [lately in the marketplace]. Our average ticket is flat today, and our intention is to give our consumer great value. We're pretty excited about the value we're giving our customer. If he world is out there at higher price points, then we have the ability to raise our price points. But we want to keep our distance between everyone else out there."
TJX Cos. overall results for its first quarter, ended April 30, included: a 4% increase in net sales to $5.2 billion; a 2% increase in consolidated comparable store sales; net income of $266 million; and diluted earnings per share of 67 cents.
Customer traffic was another highlight in the quarter, with its rates up over significant prior-year increases, "which reinforces to us that value remains top-of-mind for consumers regardless of the economic environment," Meyrowitz said.
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