Photo by: John Nacion/STAR MAX/I
TJX Companies reported that comparable sales in open stores increased 14% in the third quarter of 2021. Total sales were $12.5 billion, an increase of 20% compared to the third quarter of 2020. This sales trend is continuing into the fourth quarter with open-only comparable stores reporting sales in the mid-teens.
Fully diluted earnings per share were $0,84 an increase of 23.5% compared to earnings per share of $0.68 last year. While the company does not make a projection for the full fiscal 2022 year, indications are that it will exceed expectations since sales are running mid-single digits in the fourth quarter.
The company indicated that sales were strong in the United States, comparable store sales for Marmaxx increased 11% and HomeGoods increased 34%. TJX Canada increased 8% and Europe and Australia increased 10%. However, the company indicated that the U.S, Canada and Europe had no store closures, but Australia had 57% of their stores closed during the third quarter 2022. For the total company, store closures accounted for a loss of 1%.
Please note that open-stores comparisons refer to the fact that the company does not report comparable store sales for stores that were closed during the quarter because of COVID-19 infections. Accordingly, the U.S. and Canada stores reported all comparable store sales, while Europe reported 1% closed stores in 2021 and thus reported on 99% of stores. As Indicated Australia had 57% of their stores closed in 2021 and 25% of stores closed in 2020. For the total company stores were closed 1% in 2021 and 1% in 2020.
TJX companies should have a strong fourth quarter. The consumer is very budget conscious and values in T.J, Maxx stores are very attractive. The indication that sales are mid-double digit in the fourth quarter is an indication that the shopping momentum continues. Management is very excited about the availability of merchandise now. At the end of the quarter merchandise inventory is 32% higher than last year, and management expects to buy more merchandise from top vendors as needed. Late deliveries to major stores, due to the shipping and transportation crisis, may mean that TJX Companies will buy merchandise for pack-away for next year.
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The outlook is very bright for TJX Companies. Home Goods will sparkle in the fourth quarter since its momentum is very strong with sharp values.
POSTSCRIPT: TJX Companies used 21,000 vendors, which assures management of good flow of merchandise. In the current environment, it is likely that there will be fewer markdowns in stores as customers snap up valued priced fashion and home goods.
Last year the company reported in the fourth quarter fully diluted earnings of $0.27 plus debt extinguishment of $0.18 for total earnings of $0.45 It is my expectation that the company will earn $0.60 to $0.75 a fully diluted share.
