The TJX Cos. Inc. on Tuesday reported higher second-quarter earnings and sales and boosted profit guidance for the year.
This story first appeared in the August 13, 2008 issue of WWD. Subscribe Today.
The off-pricer’s earnings shot up 239.2 percent to $200.2 million, or 45 cents a diluted share. This compared with $59 million, or 13 cents, a year ago, when charges related to attacks on the company’s computer system dragged the bottom line down $118 million. Sales for the three months ended July 26 advanced 7.1 percent to $4.62 billion from $4.31 billion and were up 4 percent on a same-store basis.
The attacks on TJX’s computers subsequently turned out to be part of a global scam. The Justice Department last week charged 11 people with the theft of more than 40 million credit card numbers from retailers including TJX, Forever 21, DSW Inc., BJ’s Wholesale Club Inc. and Barnes & Noble.
The 2,615-door, Framingham, Mass.-based TJX, the largest U.S.-based off-price operation, is using the current economic downturn not only to attract new customers looking for bargains, but to snatch up real estate for its expanding store concepts and fund its plans for global expansion.
“Our core businesses are performing extremely well and funding our growth vehicles such as A.J. Wright and T.K. Maxx Germany,” said Carol Meyrowitz, president and chief executive officer, on a conference call with investors Tuesday.
“I have complete faith that our model will allow us to continue to grow to $30 billion to $40 billion and beyond,” she said.
The 132-door A.J. Wright business, which drove comparable-store sales up 6 percent for the quarter and cut its divisional losses by more than half to $765,000, is one of the concepts that could make a bigger splash.
The chain, which sells accessories, shoes, juniors, young men’s, kids’ and basics, will move into additional markets next year. The U.S. could ultimately support 500 to 1,000 A.J. Wrights, said Meyrowitz.
“This is a very good environment for real estate opportunities for A.J.,” said Meyrowitz.
For the first half, earnings soared 78.2 percent to $394.1 million, or 88 cents a diluted share, on a 6.7 percent sales bump to $8.99 billion.
The firm upped its earnings guidance for the year to $2.26 to $2.31 a share from the $2.20 to $2.25 previously projected. In fiscal 2008, TJX earned $1.66 a share.
Shares of TJX dropped 2.2 percent to $36.17 in New York Stock Exchange trading Tuesday, but Mark Montagna, analyst for C.L. King & Associates, attributed at least some of the decline to investors looking to lock in earlier profits.