T.J. Maxx owner expects holiday sales to be undisturbed by supply crunch

0
11
FILE PHOTO: FILE PHOTO: A T.J. Maxx store which is owned by TJX Cos Inc in Pasadena

By Praveen Paramasivam

(Reuters) -TJX Cos Inc said it was well-positioned for the holiday season, easing concerns of product availability due to supply-chain bottlenecks and sending shares of the discount store operator up to a record high on Wednesday.

Business at discount stores has picked up this year after coronavirus restrictions were eased, as people returning to work and colleges splurged on refreshing their wardrobes.

Shares rose more than 9% to touch an all-time high of $76.94 after the T.J. Maxx owner reported quarterly sales that beat estimates and raised its share buyback plan.

“We are in an excellent inventory position, with most of the product needed for the holiday season either on hand or scheduled to arrive at our stores and online in time for the holidays,” Chief Executive Officer Ernie Herrman said.

Industry-wide supply-chain bottlenecks raised worries that shelves of off-price outlets, including TJX and its rivals Ross Stores and Burlington Stores, might be left without major holiday goods.

However, the HomeGoods parent said inventories as of Oct. 30 were at $6.6 billion, compared with $6.3 billion at the end of the third quarter two years ago.

“This should alleviate investor concerns regarding TJX’s ability to secure inventory across categories and drive healthy sales gains,” Roxanne Meyer, an analyst at MKM Partners, said in a note.

TJX said overall open-only comparable store sales growth for the start of the fourth quarter were up in the mid-teens percentage range over the fourth quarter two years ago.

Net sales rose 24% to $12.53 billion in the third quarter, beating estimates of $12.27 billion, according to Refinitiv IBES data.

Net income gained 18% at $1.02 billion, or 84 cents per share. Analysts had expected 81 cents.

TJX now expects to repurchase shares worth between $1.75 billion and $2 billion this financial year, versus prior forecast of $1.25 billion to $1.50 billion.

(Reporting by Praveen Paramasivam in Bengaluru; Editing by Amy Caren Daniel)

tagreuters.com2021binary_LYNXMPEHAG0MQ-VIEWIMAGE