TJX NET DROPS 62 PERCENT; FRAIL APPAREL SALES CITED
NEW YORK — Battered by weak apparel sales, promotional pressures and warm weather, profits at The TJX Cos. tumbled 62 percent in the fourth quarter and 35 percent in the year ended Jan. 28, 1995. TJX Cos. stock fell 1 to 12 1/2 Wednesday on the New York Stock Exchange. “Off-pricers and catalog firms are having a tough time of it,” said Edward Johnson at Johnson Redbook Service.
Bernard Cammarata, president and chief executive officer, said that in the latest year, “We were faced with significant external challenges including an extremely weak apparel cycle, fueled by a lack of fashion and shifting consumer emphasis from apparel to home furnishings.” TJX pointed to the highly promotional retail environment and warm weather for the poor results, but Cammarata added, “There were areas within the company in which our execution was not up to our standards.” Last week, TJ’s archrival Marshalls also reported disappointing results for the fourth quarter. The TJ Maxx stores division failed to post a gain in operating income for the year. Same-store sales were flat, but total sales were up 7 percent. Apparel sales were weak during the year, while shoes, accessories, jewelry, domestics, and giftware all reported solid gains. Same-store sales for non-apparel categories increased 8 percent.
In the latest quarter, the giant off-pricer earned $11.7 million, or 14 cents a share, against $30.7 million, or 39 cents, a year ago. Sales gained 6.9 percent to $1.1 billion from $1 billion.
The firm’s Hit or Miss division was hurt the most by the weakness in apparel and unseasonable weather, posting an operating loss of $4.5 million. Same-store sales declined 7 percent.
With lower than expected sales, increased markdowns and expenses, profits of Chadwick’s of Boston, an off-price catalog operation, fell to $6.1 million from $24.7 million.