Who delivered higher growth in the first quarter?
TJX Companies’ (TJX) sales grew 6.8% to $9.28 billion in the first quarter of fiscal 2020, which ended on May 4. Analysts had been expecting sales of $9.22 billion. TJX Companies’ same-store sales grew 5% in the quarter. It delivered higher sales growth than rival Ross Stores (ROST) in the period.
Ross Stores’ sales grew 5.8% to $3.80 billion against analysts’ estimate of $3.79 billion in the first quarter of fiscal 2019, which ended on May 4. Ross Stores’ same-store sales grew 2% in the first quarter.
TJX Companies attributed its sales growth to the strength in its Marmaxx division, which is the company’s largest division and houses the T.J. Maxx and Marshalls businesses. Marmaxx’s sales grew 7.8%, and its same-store sales grew 6% driven by strong customer traffic. TJX Companies’ home goods category generated sales growth of 10% driven by strong noncomparable sales (primarily including sales from new stores and e-commerce sales). However, the division’s SSSG (same-store sales growth) of 1% was softer than expected.
TJX Canada’s sales declined 0.7%, and its same-store sales were flat on a year-over-year basis due to unseasonable weather. Sales of TJX International grew 3.9%, and its same-store sales grew an impressive 8%.
Ross Stores’ SSSG was driven by an increase in average basket size. The men’s category performed well in the quarter, but ladies apparel continued to disappoint.
TJX Companies expects its sales to grow in the range of 5%–6% to $41 billion to $41.3 billion in fiscal 2020, which ends on February 1, 2020. TJX Companies expects SSSG in the range of 2%–3% in fiscal 2020. In the second quarter of fiscal 2020, TJX Companies expects sales in the range of $9.8 billion–$9.9 billion compared to $9.3 billion in the second quarter of fiscal 2019. TJX Companies expects SSSG of 2%–3% in the second quarter.
Ross Stores expects its SSSG to be in the range of 1%–2% in the second quarter of fiscal 2019. This outlook represents a slowdown compared to its 5% SSSG in the second quarter of fiscal 2018.