TJX shares fall on poor sales performance
TJX Cos. Inc. disappointed Wall Street, posting its worst quarterly same-store sales performance since 2009, as its fashion apparel failed to click with customers and fewer people bought winter clothes in an unusually hot fall season.
Shares of the off-price retailer, which also issued a full-year profit forecast that was below estimates, were down 4.7 per cent at $67.38 (U.S.) in afternoon trading on Tuesday.
The news took investors by surprise as the company has been holding up well in the face of a broader slowdown in business for bricks-andmortar retailers such as Macy’s Inc. and Nordstrom Inc.
“It was absolutely a fashion miss. … This was, really, on our own part a selection issue and had nothing to do with availability out there,” chief executive Ernie Herrman said, adding that a bulk of the fashion missteps would be fixed in the holiday quarter.
The company said same-store sales for the third quarter were flat despite higher traffic at its stores across divisions. Analysts had expected a 2.2per-cent rise in same-store sales, according to Thomson Reuters I/B/ E/S.
“Investor concerns have been heightened on near-term worries, including warmer weather, hurricanes and peer liquidation sales,” RBC analyst Brian Tunick wrote in a note.
Comparable-store sales in Marmaxx, the company’s biggest and most profitable unit which includes T.J. Maxx and Marshalls stores, fell 1 per cent, surprising analysts who were expecting a 1.4-per-cent rise.
The Framingham, Mass.-based company said it would hit the higher end of its fiscal 2018 adjusted profit forecast of $3.91 to $3.93 a share.
TJX said it expects holiday-quarter same-store sales growth of 1 per cent to 2 per cent. Overall sales rose 6 per cent to $8.8-billion in the third quarter, slightly below the $8.86-billion average estimate. TJX (TJX) Close: $67.94 (U.S.), down $2.82