By  on November 14, 2017
TJ Maxx and Marshalls

The TJX Cos. saw net sales increase during the third quarter, but business at a range of stores open this time last year was dragged down by record hurricanes, along with a “fashion miss” at some others.President and chief executive officer Ernie Herrman said the quarter’s flat comparable-store sales could be widely attributed to the effect of hurricanes Harvey, Irma and Maria, which hit the southern U.S. and Puerto Rico over the course of a few weeks, but compared to last year’s 5 percent comp gain and Wall Street’s expectation of a more than 2 percent increase, TJX’s stock took a hit.Shares of the off-price retailer fell 4 percent during trading Tuesday to close at $67.94, after hitting its lowest level over the past year earlier in the day. TJX’s high came in mid-2016, hitting $82.87. The comp number also excludes nearly 40 stores, including in hurricane-devastated Puerto Rico.Brian Tunick of RBC Capital Markets said the comp result is “disappointing,” noting there was “deceleration” within all of TJX’s segments, including T.J. Maxx, Marshalls and Homegoods.Ike Boruchow said in a separate note that the hurricanes were “unforeseen negatives” for TJX and other retailers, but that its business model is still “solid” and he still expects it to outperform during holiday.  But dramatic and unseasonably warm weather aren’t totally to blame for the third-quarter sales miss, which counts as TJX’s slowest rate of growth since the height of the Great Recession in 2009. A slowdown in same-store sales began showing at the start of this year, when comp sales rose by just 1 percent.Herrman admitted during a call with financial analysts that a handful of stores suffered during the third quarter from a “lack of appropriate fashion content.”“It was absolutely a fashion miss,” Herrman said. “This was, really, on our own part, a selection issue and had nothing to do with availability out there.”He added that the stores at issue are already being addressed and are on their way to being “improved” for the fourth quarter. Nevertheless, TJX still posted a gain in consolidated net sales for the quarter of $8.76 billion, compared with $8.26 billion a year earlier and net income rose to $641.4 million from $549.7 million.The boost in sales and profits comes from a rapid expansion of stores. TJX opened 139 new locations during the third quarter alone, surpassing its goal of operating 4,000 stores by the end of the fiscal year, and has plans to continue growing. At at the end of the last fiscal year, Herrman said the long-term goal is to operate 5,600 stores worldwide.   TJX also benefitted from a continued increase in foot traffic during the quarter, leaving a mix of positives for the retailer as it heads into an expectedly busy holiday season.“We'll be flowing fresh merchandise to our stores and online multiple times a week so shoppers can expect to see something new every time they visit,” Herrman said. “I am convinced that our stores will have the best gift-giving assortments out there this holiday season.”With that, the company maintained its full year guidance at the high-end of earlier projections. TJX expects diluted earnings per share to hit between  $3.91 and $3.93, about a 13 percent increase over 2016. This is based on a 1 percent to 2 percent growth in consolidated comparable sales and consolidated sales in the $35.6 billion to $35.7 billion range, a 7% to 8% increase over 2016.For More, See:Growth for Ross Stores, TJX Seen as Amazon-ProofDepartment Stores Muddle Toward HolidayCanada Goose Sales Jump During Q3

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