The parent to T.J. Maxx and Marshalls logged first-quarter losses of $887.5 million, down from earnings of $700.2 million a year earlier. Sales for three months ended May 2 fell 52 percent to $4.4 billion from $9.3 billion.
TJX closed its stores on March 19 and furloughed many workers starting April 12 as it took steps to strengthen its balance sheet, drawing $1 billion from its credit facilities, issuing $4 billion in debt, suspended its stock buyback program and cut capital expenditures.
This month, the company has reopened 1,600 of its 4,545 stores globally.
“While it is still early and sales could fluctuate, we are pleased with the very strong sales we have seen in stores where we have reopened so far,” Ernie Herrman, chief executive officer and president, said on a conference call with analysts. “For the 1,100-plus stores that have been opened for at least a week, sales overall have been above last year across all states and countries where we are open. We believe these strong early trends speak to our values on a wide selection of merchandise serving a wide customer demographic, also the loyalty of our valued customers and pent-up demand.”
“Our treasure hunt shopping experience has always provided retail entertainment with our constantly changing merchandise selections,” Herrman said. “In today’s environment, we believe this kind of shopping experience can serve as a break in the day…for our customers, and in the future [it] will continue to be a major draw for consumers to our stores. Also, with a vast majority of our stores located in strip centers and many in close proximity to grocery stores, our store locations are a convenient shopping visit for people making fewer trips from home.”
The off-pricer is seeing a bountiful market in terms of merchandise that is stacking up in the closed stores and warehouses of full-price retailers.
“The marketplace is loaded with inventory, and I am convinced that we’ll have access to plenty of high-quality, branded merchandise to offer consumers the categories they want when they shop us,” the ceo said. “Our buyers have been in touch with many of our vendors throughout this crisis and are staying on top of market and consumer trends.”
Investors are largely standing by TJX, which still has a market capitalization of more than $60 billion.
“TJX is seeing much-better-than-feared traffic in stores that are reopening, suggesting many consumers are comfortable in off-price stores and continue to favor TJX’s value proposition,” said John Kernan, an analyst at Cowen.
“Demand trends in TJX stores open one-plus week and online appear to be outpacing the capacity to flow goods and are above management’s plans,” Kernan noted. “Clearance is mostly selling through at first markdown, better than expected, as TJX makes way for fresher goods from the DCs and places buys ‘surgically’ based on early sales trends.”