Lowered expenses and the elimination of certain losses and impairments helped TJX Companies Inc. grow profits even as sales slumped.
The off-price retailer, whose brands include TJ Maxx, Marshalls and HomeGoods, reported net sales for the second quarter of fiscal 2023 of $11.8 billion, a decrease of 2% versus $12.08 billion the second quarter of fiscal 2022.
U.S. comp store sales decreased 5% versus a 21% increase in U.S. open-only comp store sales in the second quarter of fiscal 2022. Net income for the second quarter of fiscal 2023 was $809.3 million, up 3% year-over-year from $785.7 million. Diluted earnings per share were $.69 versus $.64 per share in the second quarter of fiscal 2022, which included a debt extinguishment charge of $.15 per share.
During the second quarter ended July 30, 2022, the company increased its store count by 21 stores to a total of 4,736 stores and increased square footage by 0.5% over the previous quarter.
For the full year fiscal 2023, the company is updating its expectation for diluted earnings per share to $2.87 to $2.95 and adjusted diluted earnings per share to $3.05 to $3.13, from its previous guidance for diluted earnings per share of $2.94 to $3.01 and adjusted diluted earnings per share of $3.13 to $3.20.
For the full year fiscal 2023, TJX is also updating its expectation for U.S. comparable store sales to a decrease of 2% to 3%, from its previous guidance of an increase of 1% to 2%. The company’s full-year fiscal 2023 outlook implies U.S. comparable store sales in the fourth quarter of fiscal 2023 to be flat to down 1%, compared to a 13% U.S. open-only comp store sales increase in the fourth quarter of fiscal 2022.
“We believe our strong profitability speaks to the strength and flexibility of our off-price business model, sharp execution of our teams, and expense discipline,” said Ernie Herrman, CEO and president of The TJX Companies Inc. “As to the top-line, U.S. comp sales for the second quarter came in lighter than we expected as we believe historically high inflation impacted consumer discretionary spending. While we saw more softness in our home categories, we were very pleased that comp sales in our overall apparel business at Marmaxx were slightly positive every month of the quarter.
“Looking ahead, while we are not immune to macro factors, we are convinced that the flexibility of our off-price business model and the value proposition we offer to a wide range of consumers,” said Herrman. “We are excited about our many initiatives to drive customer traffic and sales for the fall and holiday selling season, and will be emphasizing our value leadership in our marketing. We remain focused on our long-term vision to become an increasingly profitable, $60-billion-plus revenue company.”
As of July 30, 2022, the end of the company’s second quarter, The TJX Companies Inc. operated a total of 4,736 stores in nine countries, the United States, Canada, the United Kingdom, Ireland, Germany, Poland, Austria, the Netherlands, and Australia, and five e-commerce sites. These include 1,290 T.J. Maxx, 1,157 Marshalls, 862 HomeGoods, 62 Sierra, and 40 Homesense stores, as well as tjmaxx.com, marshalls.com, homegoods.com, and sierra.com, in the United States; 295 Winners, 150 HomeSense, and 106 Marshalls stores in Canada; 626 T.K. Maxx and 77 Homesense stores, as well as tkmaxx.com in Europe; and 71 T.K. Maxx stores in Australia.