TJX home biz climbs down off explosive growth, but remains solid

Framingham, Mass. – The blistering pace of growth at TJX Companies was destined to clock out at some point. But the business is still good.

U.S. comp store sales growth rounded down to flat over a 17% increase in U.S. open-only comp store sales in the first quarter of fiscal 2022. And, in the U.S., sales for the HomeGoods division came in down 7% versus last year at $2.03 billion versus $2.14 billion in last year’s first quarter. Comp at HomeGoods declined 7% on top of a 40% increase in the year-ago quarter. The home department comp at Marmaxx was off at a similar pace, also on a strong year-over-year comparison.

“We are still doing a lot of home business. It’s very healthy,” said Ernie Herrman, TJX Companies CEO and president. “So we will continue to buy at a steady pace.”

On the call with investors senior executive vice president and CFO Scott Goldenberg said, “I believe the home goods sales decline was the result of the year-over-year comparison. Our overall markdowns were favorable to pre-pandemic levels. The customer perceptions of our value gap remain strong. We were also hurt by 700 basis points of incremental freight costs.”

TJX Cos.’ initiative to gradually raise prices has largely been accepted by shoppers, which Herrman attributed in part to a focus on fashion goods rather than commodity merchadnise. “Our results are panning out,” he said.

The company is currently planning new stores across a wide customer demographic and will “open more than 1,500 additional stores in current markets with current banners,” Herrmann said on the call. “We have more than 1,200 buyers that are sourcing goods from more than 21,000 vendors in 100 countries.”

Hermann added on the call that visiting stores has become an appealing thing to a lot of customers. “It’s like a treasure hunt and offers entertainment quotient, especially in home goods which allows consumers to be driven by the value equation.”

Goldenberg said on the call that the company is raising guidance for the full year to a range of $51.3 to $51.8 billion. “Even though we had lower than planning first quarter sales, we expect total second quarter sales of $12.0 to $12.2 billion,” he said.