TJX Cos. (TJX) misses Q2 EPS by 8c, sees Q3 open-only comp store sales decrease of 10% to 20%

(Updated - August 19, 2020 7:56 AM EDT)

TJX Cos. (NYSE: TJX) reported Q2 EPS of ($0.18), $0.08 worse than the analyst estimate of ($0.10). Revenue for the quarter came in at $6.7 billion versus the consensus estimate of $6.57 billion.

• Overall open-only comp store sales (defined below) were down 3% versus last year.

CEO and President Comments

Ernie Herrman, Chief Executive Officer and President of The TJX Companies, Inc., stated, “It was so great to welcome back our Associates and loyal customers around the world this quarter. I am incredibly proud of the monumental effort of our Associates worldwide to reopen more than 4,500 stores in 9 countries, multiple distribution and fulfillment centers, and our e-commerce sites. Across our organization, our Associates worked tirelessly to help us operate safely in the current environment and bring our customers the excellent values we are known for. When we reopened, customer response to our values was beyond what we could have imagined.”

Mr. Hermann continued, “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. Further, we saw especially strong sales at our HomeGoods and Homesense chains, as well as the home departments within our other chains, across geographies. 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.”

Financial Update

The Company ended the second quarter in a strong liquidity position with $6.6 billion of cash. During the second quarter, the Company generated $3.4 billion of operating cash flow and paid off the $1.0 billion it drew down from its revolving credit facilities in March 2020. At the beginning of the third quarter, the Company also increased its borrowing capacity under revolving credit facilities with a new $500 million facility, making a total of $1.5 billion available to the Company. The Company is in a strong financial position and will continue to be prudent with its expenses, capital spending, and shareholder distributions due to the current environment. The Company does not expect to declare a dividend in the third quarter of Fiscal 2021 and has suspended its share buyback program.

Outlook

For the third quarter, the Company is planning overall open-only comp store sales to decrease in the range of 10% to 20%. This is in-line with the sales trends it has seen since the middle of July and through August month-to-date. 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. Due to this uncertainty, the Company does not believe it is currently able to provide meaningful further guidance and is not providing a financial outlook for Fiscal 2021 at this time.

For earnings history and earnings-related data on TJX Cos. (TJX) click here.

You May Also Be Interested In

• Lockheed Martin (LMT) Tops Q1 EPS by 53c, Beats on Revenue; Offers FY24 Guidance
• Kiniksa Pharmaceuticals, Ltd. (KNSA) Misses Q1 EPS by 11c; raises guidance
• General Motors (GM) Tops Q1 EPS by 50c, Raises Guidance