Strong sales growth
TJX Companies (TJX) has surpassed analysts’ expectations for the seventh time in the past nine quarters. Its net sales of $8.7 billion in the first quarter of fiscal 2019[1. Fiscal Q1 2019 ended on May 5, 2018.] came in ahead of the consensus analyst estimate of $8.5 billion. Investors were impressed with the 11.6% year-over-year growth compared to 3.2% sales growth in the previous year.
The company’s same-store sales grew 3% in the first quarter of fiscal 2019.
TJX Companies attributed its strong net sales growth to increased customer traffic. In the conference call, TJX’s CEO Ernie Herrman stated that the first quarter of fiscal 2019 marked the 15th straight quarter in which the company, as well as its Marmaxx segment (its largest segment), experienced a rise in customer traffic.
Same-store sales of its Marmaxx segment grew 4% in the first quarter of fiscal 2019 compared to flat same-store sales growth sequentially. The segment’s apparel and home categories performed well in the quarter with net sales growth of 8.3% to $5.4 billion.
Same-store sales of its HomeGoods segment grew 2% in the quarter, and net sales increased 13.2% to $1.3 billion. The segment had softer sales at the beginning of the quarter. However, sales improved in March and April.
The company’s international business sales also improved in the first quarter. TJX Canada’s same-store sales growth was 3%, and net sales increased 15.6% to $854 million. Same-store sales of TJX International (comprised of Europe and Australia businesses) increased 1% in the first quarter compared to flat same-store sales growth year-over-year. The segment’s net sales grew 23.8% to $1.2 billion. Its Australia sales continued to be strong. The segment’s European sales were adversely impacted by periods of unfavorable weather early in the fiscal first quarter.
TJX Companies expects its fiscal 2019 sales to grow 5%–6% to $37.7 billion–$37.9 billion. The company kept its same-store sales growth guidance intact in the range of 1%–2% for fiscal 2019.
We’ll look at TJX Companies’ first-quarter margins in the next part of this series.