The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
TJX Companies Inc. lifted its annual profit forecast on Wednesday, banking on easing cost pressures to cushion a pullback in consumer spending on discretionary items.
The T.J. Maxx parent also missed first-quarter revenue estimates and joined bigger retailer Target Corp in forecasting a downbeat second quarter as sticky inflation forces consumers to rethink non-essential purchases such as furniture and kitchenware.
Consumers aren’t necessarily buying home products right now unless it’s essential for everyday use, said Jane Hali and Associates analyst Jessica Ramirez.
TJX’s HomeGoods brand saw US comparable-store sales drop 7 percent in the first quarter. The company had warned in February that the business would slow down for two more quarters.
ADVERTISEMENT
Still, TJX’s gross margin increased by 1 percentage point to 28.9 percent as it started to see expenses ease after months of grappling with sky-high costs related to raw materials, labour and freight.
Shares were up about 3 percent in morning trade as the company also beat expectations for first-quarter profit and maintained its annual sales forecast.
“Investors place more importance on sales than margins, so the sales miss will likely keep the stock from moving much higher,” said UBS analyst Jay Sole.
Net sales rose 3.3 percent to $11.78 billion in the quarter ended April 29, missing estimates of $11.82 billion.
TJX now expects 2024 adjusted profit per share between $3.39 and $3.48, compared with its previous range of $3.29 to $3.41, missing estimates of $3.55, according to Refinitiv IBES.
Its current-quarter forecast for diluted earnings per share of between 72 and 75 cents also came in below estimates of 79 cents. Overall comparable store sales was expected to increase 2 percent to 3 percent, compared with expectations of 3.07 percent.
By Granth Vanaik; Editor Devika Syamnath
Learn more:
ADVERTISEMENT
T.J. Maxx Parent Sees Upbeat Profit as Price Hikes Counter Higher Costs
Discount store operator TJX Cos Inc on Wednesday forecast annual profit above Wall Street estimates after posting upbeat quarterly earnings, as price increases help the T.J. Maxx parent counter a hit from rising costs.
The rental platform saw its stock soar last week after predicting it would hit a key profitability metric this year. A new marketing push and more robust inventory are the key to unlocking elusive growth, CEO Jenn Hyman tells BoF.
Nordstrom, Tod’s and L’Occitane are all pushing for privatisation. Ultimately, their fate will not be determined by whether they are under the scrutiny of public investors.
The company is in talks with potential investors after filing for insolvency in Europe and closing its US stores. Insiders say efforts to restore the brand to its 1980s heyday clashed with its owners’ desire to quickly juice sales in order to attract a buyer.
The humble trainer, once the reserve of football fans, Britpop kids and the odd skateboarder, has become as ubiquitous as battered Converse All Stars in the 00s indie sleaze years.