TJX Dips After Missing Estimates, Signaling More Retail Woes

(Bloomberg) -- TJX Companies Inc., the owner of the Marshalls and TJ Maxx chains, reported sales growth that missed analysts’ projections, even as foot traffic into its stores continued to grow. The shares slipped.

• Comparable sales rose 2% in the second quarter, below the average estimate for 3% growth, according to Consensus Metrix, and down from last year’s speedier 6% pace.

Key Insights

• Inventory swelled to $5.1 billion as of the beginning of August, up from $4.5 billion a year earlier. That could be a red flag for investors that less popular items are piling up. Similar issues have plagued other department stores in recent quarters.
• Still, even as same-store sales grew less than expected, the retailer’s popular “treasure hunt” shopping experience is still driving buyers into stores. The company logged its 20th straight quarter of customer traffic increases at TJX and Marmaxx, it said, setting it apart from rivals who haven’t been able to get new shoppers to visit as internet competitors grow.
• TJX’s results add to recent gloomy news from other retailers. Macy’s Inc. slashed its profit outlook for the year and J.C. Penney Co. missed same-store sales estimates last week.

Market Reaction

• The shares fell as much as 3.5% on Tuesday. TJX stock was up 15% this year through Monday’s close.

Get More

• For more on the results, click here.
• For the company statement, click here.

To contact the reporters on this story: Olivia Rockeman in New York at orockeman1@bloomberg.net;Jordyn Holman in New York at jholman19@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Jonathan Roeder

©2019 Bloomberg L.P.