FRAMINGHAM, Mass. – In a rare misstep, TJX Cos.’ largest division under-performed during the second quarter, but strength at its other banners more than made up for the shortfall.
Comp at MarMaxx – which accounts for 60% of total sales – rose just 1% during Q2. That was off-pace not only for the division (comprised of U.S. T.J. Maxx and Marshalls stores), but also well below the comps generated by TJX’s other nameplates.
During this week’s quarterly call with investors, executives declined to specify which categories fell short. Impulse items received a mention, but CEO and President Ernie Herrman described the miss as self-inflicted, involving just a handful of merchandise areas.
“We could have been sharper at having the right goods in the right stores at the right time,” he said. The problems have been addressed, he added, and the early third quarter trend is moving in the right direction.
He also noted that home sales out-performed apparel sales at the company during Q2.
Comp at the U.S. HomeGoods and Homesense division increased 7% on top of a 5% increase in the year-ago quarter. Higher average backets led the way, although transactions also rose. Net sales jumped 10% to $2.5 billion. “Even some of the high-ticket areas are doing really, really well,” Herrman said.
Home now accounts for more than 35% of TJX’s business across the corporation, he added.
Total company net sales for the quarter ended Aug. 1 rose 5% to $15.2 billion, with consolidated comp up 4%.
Net income was $1.5 billion and diluted earnings per share up 24% to $1.36. Excluding a 14 cents net benefit from IEEPA tariff refunds, adjusted diluted earnings per share were $1.22, up 11% compared with the prior year.
TJX Cos. received $331 million in tariff refunds during the quarter and expects the outstanding amount of its refunds to arrive in the third quarter.
