Shares of off-price retailer TJX (TJX), which has been a standout performer for the retail industry in recent quarters, dropped as much as 5% on Tuesday after revealing the slowest comparable-store sales growth in 12 quarters and a downward revision to its second-quarter outlook.
The parent company of TJMaxx, Marshalls and HomeGoods revealed earnings of 82 cents a share, three cents above Wall Street’s expectations, while revenues in the first three months of the year rose 3% from the year-ago period to $7.84 billion, light of forecasts for $7.87 billion.
Same-store sales, a key metric for retailers that measures transactions at stores open at least a year, rose 1% in the first quarter after rising 7% during the same time a year ago. The company’s HomeGoods and TJX Canada divisions saw positive increases of 3% each in same-store sales, while those at TJMaxx, Marshalls, and TJX International were flat. For comparison, during the first three months of the prior year, TJX Canada saw a 14% jump in comp sales, while Home Goods rose 9%, TJMaxx and Marshalls gained 6% and TJX International rose 4%.
Despite the growth slowdown during the quarter, CEO Ernie Herman said he is “confident” the company is gaining market share at each of its major divisions as the second quarter gets off to a “solid start.” Despite liquidation sales ahead of store closures at various retailers – including JCPenney (JCP) and Macy’s (M), Herman blamed the weak same-store sales growth…