TJX Swings to Wider-Than-Expected Loss - Shares Lower

TJX posted a wider-than-expected second-quarter loss, though the CEO called its profit margin on merchandise "excellent."
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TJX  (TJX) - Get Report swung to a wider-than-expected fiscal-second-quarter loss after the coronavirus pandemic shut many of its stores.

For the quarter ended Aug. 1, the loss was 18 cents a share, compared with profit of $759 million, or 62 cents, in the year-earlier quarter. Analysts surveyed by FactSet were looking for a loss of 10 cents for the latest quarter.

TJX posted revenue of $6.67 billion, down 32% from $9.78 billion in the year-ago quarter. The latest figure beat the FactSet analyst forecast of $6.55 billion.

At last check TJX shares traded at $54.60, down 5%. They have slipped 6% so far this year.

“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,” TJX Chief Executive Ernie Herrman said in a statement.

“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 comparable-store sales increases each month of the quarter.”

Looking at 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,” Herrman said.

At the end of the quarter TJX had $6.6 billion of cash on hand. During the second quarter, it paid off the $1 billion it drew down from its revolving-credit facilities in March 2020.

TJX decided not to declare a dividend for the fiscal third quarter, and has suspended its share buyback.

At quarter-end, TJX operated 4,557 stores, up 12 from the end of the first quarter. More than 4,500, or about 99%, of the stores are now open, TJX said.

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