TJX Companies Inc. (NYSE:TJX)
March 2013 Sales Conference
April 11, 2013 12:00 am ET
Sherry Lang - Senior Vice President of Global Communications
Good morning. This is Sherry Lang, Senior Vice President of Global Communications for The TJX Companies. Today is April 11, 2013, and I would like to welcome you to our Investor Call to discuss our March 2013 sales.
Before I begin, please note that the forward-looking statements I make today about the company's results, expectations and plans are subject to risks and uncertainties that could cause actual results and actions to vary materially. These risks and uncertainties are discussed in the company's SEC filings, including, without limitation, the Form 10-K filed April 2, 2013.
Further, these comments are copyrighted by The TJX Companies. Any recording, rebroadcast, reproduction or other use of these comments for profit or otherwise, without prior consent of TJX, is prohibited and a violation of United States copyright laws. [Operator Instructions]
Now to recap the numbers. Sales for the 5-week period ended April 6, 2013, were $2.4 billion, up 5% over the $2.3 billion achieved during the 5-week period ended March 31, 2012. For the 9 weeks ended April 6, 2013, sales reached $4.2 billion, a 6% increase over last year's $4 billion. Consolidated comparable store sales for March 2013 were down 2% and in line with our expected range.
As a reminder, we had planned March comp sales down versus last year due to the timing of Easter and a very strong comp last March.
For the 9-week period ended April 6, 2013, consolidated comp store sales decreased 1%. March sales were within our expected range despite the unusually cold and unfavorable weather patterns across most of the regions in the U.S., Canada and Europe. In U.S. regions not affected by weather, we saw comp sale increases.
Another noteworthy point is that home categories did very well, which is typical when unseasonable weather negatively impacts apparel sales.
Further, overall business trends picked up towards the end of the month as the weather became warmer. April is off to a good start. Inventories are in excellent shape, and we are seeing amazing product in the marketplace, of which we can take advantage.
As to guidance for the first quarter, merchandise margins for the quarter are on track to be higher than last year. And we are narrowing the range of our first quarter earnings per share guidance to $0.60 to $0.62. It's important to note that this represents very solid growth over last year's first quarter, which had the highest EPS growth of that year.
Now divisional comp store sales for March were as follows: Beginning with our U.S. divisions at The Marmaxx Group, comp store sales decreased 3%, which was in line with our expected range. I will go into further detail on Marmaxx in a moment.
At HomeGoods, comp store sales for March increased by a strong 6%, as our excellent performance in this division continues.
Now to TJX Canada, at Winners, HomeSense and Marshalls combined, comp store sales were down 5% in March. Our Canadian business was also affected by the unfavorable weather, as most of the country experienced severely cold weather in March. Further, we saw home categories outperform apparel in Canada.
Moving to TJX Europe. At T.K. Maxx and HomeSense combined, comp store sales were flat versus an extremely strong comp increase last year.
In Europe, too, we saw unseasonable weather as the problem. Our European business started the month off with comps in the double digits, and sales dropped off as the cold weather hit. As an interesting fact, this past March was the coldest March in the U.K. since 1962.
To give some further color to March's results at The Marmaxx Group, geographically, as we've discussed, sales were generally stronger where weather was not an issue. The West Coast was our strongest region, up mid-single digits, and Florida and the Southwest outperformed the chain with positive comps. The Midwest, Southeast and Northeast, which were most impacted by the unfavorable weather, trailed the chain's average.
As to merchandise categories at Marmaxx, apparel comps decreased 5%, and Home Fashions comped up by a strong 7%. Again, it is typical for our home categories to outperform apparel when the weather is unseasonable.
Summing up, I'd like to make 4 points. Even with a negative 2% comp, merchandise margins for the first quarter are on track to be ahead of last year. We saw comp increases in U.S. regions where weather was not an issue. We are seeing amazing amounts of quality product in the marketplace as the cold weather has taken its toll on apparel sales in general.
And finally, April is off to a good start. Again, we are narrowing the range of our first quarter earnings per share guidance to $0.60 to $0.62 over our toughest quarter for EPS growth comparison purposes last year.
Our first quarter guidance continues to be based on a comp-sales assumption in April of a 6% to 8% increase on both a consolidated basis and at The Marmaxx Group. We will be reporting April sales on May 9, 2013.
As a reminder, after the April sales release, we will no longer report monthly sales and will move to a quarterly reporting schedule. Again, we believe this is the right practice for TJX and our shareholders, reflecting the long-term approach we take in planning and running our business.
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