TJX EARNINGS TRIPLE IN 3RD PERIOD
NEW YORK — Buoyed by robust performances at its T.J. Maxx and Marshalls chains, TJX Cos. said income tripled in the third quarter to $81.6 million, or 90 cents a share.
The Framingham, Mass.-based retailer, the largest off-pricer in the country, is reaping gains from its successful integration of Marshalls, purchased from Melville Corp. in November 1995, and is anticipating a strong holiday season.
Including $8.8 million in income from Chadwick’s of Boston catalog, which is being sold to Brylane L.P., earnings after a $2.9 million extraordinary charge came to $87.5 million, or 97 cents. The charge reflected the retirement of $89 million of the company’s 9 1/2 percent sinking fund debentures in September.
TJX stock rose 7/8 to 42 1/8 on The New York Stock Exchange Tuesday.
Sales, excluding Chadwicks, in the quarter ended Oct. 26 doubled to $1.72 billion from $861.2 million, reflecting the purchase of Marshalls. Same-store sales climbed 8 percent.
Total proceeds from the Chadwick’s deal are estimated at $300 million including cash, $20 million convertible subordinated notes and Chadwick’s consumer credit card receivables.
The transaction is expected to be completed during TJX’s fourth quarter when the retailer will log a $125 million, or $1.39 a share, after-tax gain.
“Sales at T.J. Maxx and Marshalls were significantly higher than we had expected throughout the quarter, with T.J. Maxx posting a 7 percent comparable-store sales increase and Marshalls posting a 9 percent gain,” said Bernard Cammarata, chairman and chief executive officer. He noted that an increase in profitability at both divisions reflected strong sales and better-than-expected cost savings as a result of the consolidation of the two businesses.
“As we enter the fourth quarter, inventories throughout our company are in excellent condition,” Cammarata said. “We are optimistic about the holiday season, and we expect a significant increase in fourth quarter profits, which should lead to income from continuing operations in the range of $2.20-$2.25 a share for 1996.”
The company also expects to see further cost savings from the T.J. MaxxMarshalls combination and large interest expense savings from repaying substantial debt with the proceeds from the sale of Chadwick’s.