TJX Companies Inc. (NYSE:TJX)
August 04, 2011 7:00 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 August 4, 2011, and I would like to welcome you to our Investor Call to discuss our July 2011 sales.
Before I begin, please note that the forward-looking statements I make today about the company's results and plans are subject to risks and uncertainties that could cause actual results and actions to vary materially. These risks are discussed in the company's SEC filings including, without limitation, the Form 10-K filed March 30, 2011.
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 4-week period ended July 30, 2011, were $1.6 billion, up 8% over the $1.5 billion achieved during the comparable 4-week period ended July 31, 2010. For the 26 weeks ended July 30, 2011, sales reached $10.7 billion, a 6% increase over last year's $10.1 billion. Consolidated comparable store sales for July 2011 increased 4%, which was above our expectations. For the 13-week second quarter, comp store sales grew 4%, which was at the high end of our already raised expectations and on top of the 3% increase last year. For the 26-week year-to-date period, consolidated comp store sales increased 3% over a strong 6% increase last year.
We are very pleased to see our strong trends continue as our 4% consolidated comp increase for July exceeded our expectations. The Marmaxx Group continues to outperform, with comps at this, our largest division, growing by 5% in July. In today's economic environment, we believe that value remains as important as ever to consumers, and that our excellent assortments of quality product at great values are what is driving our increases in customer traffic. We are in an excellent position as we enter the third quarter. The amount of quality product in the marketplace continues to offer us great opportunities, upon which our liquid inventory position enables us to capitalize.
With above-plan sales and continued strength in merchandise margins, we are raising our outlook for second quarter earnings per share. We now expect second quarter earnings per share to be in the range of $0.88 to $0.89, above our previously projected range, compared with $0.74 per share last year on a GAAP basis. This new projected range would represent a 21% to 22% increase over our adjusted earnings per share of $0.73 last year, which excluded a $0.01 per share positive impact from an item impacting comparability described in today's press release available at www.tjx.com.
Divisional comp store sales for July and the second quarter were as follows: Beginning with our U.S. division, at The Marmaxx Group, again, comp store sales increased 5% in July, which was above our already raised expectations and over a 3% increase last year. For the second quarter, Marmaxx comps also increased 5%, which was over a 3% increase last year and at the high end of our most recent guidance. I will go into more detail on Marmaxx in a moment.
Comp store sales at HomeGoods were up 3% in both July and the second quarter compared with strong 6% and 8% increases in July and the second quarter, respectively last year. It's great to see HomeGoods continue to drive excellent results on top of very challenging comparisons, and we believe we have much more opportunity at HomeGoods in front of us.
Now to TJX Canada. At Winners and HomeSense combined, comp store sales decreased 3% in both July and the second quarter compared with strong 7% and 6% increases in July and the second quarter, respectively last year. Comps at our Canadian business were disappointing. Home outperformed apparel, in which we believe we could have executed better specifically in women's and children's, and we are presently focusing on these areas. That said, our inventories and costs remained very tightly controlled, which should benefit profit margins.
Moving to TJX Europe. At T.K. Maxx and HomeSense combined, comp store sales increased to 2% in July. For the quarter, comp store sales in Europe were flat, which was in line with our expectations. We saw trends continue to remain positive in Europe, which is encouraging. We have done a significant amount of work in this business and are seeing progress as we exit the first half, which puts us just about where we thought we'd be by this time. We continue to look for greater improvement in the second half of the year when TJX Europe typically earns the majority of its profit.
To give some further color to July's results at The Marmaxx Group, geographically, comps were strong across the board with the Southwest and New England outperforming the chain. The West Coast and Florida were in line with the chain's average. The Southeast and Midwest slightly trailed the chain. As to merchandise categories at Marmaxx, apparel comps increased 6% and home fashions decreased 1% in July against a 10% increase last year.
Summing up, we are pleased with the consistently strong performance of our business overall. We begin the fall selling season in an excellent position to take advantage of the plentiful buying opportunities that we are seeing in the marketplace for quality branded merchandise. We are excited about the great brands and fresh fashions we are offering to our customers and believe our terrific values, along with our aggressive marketing campaigns, will continue to draw consumers into our stores.
To recap guidance, we now expect second quarter EPS to be in the range of $0.88 to $0.89, which would represent a 21% to 22% increase over last year's adjusted $0.73.
We will be announcing second quarter results on Tuesday, August 16, 2011. We will also provide specific guidance for third quarter earnings at that time, as well as expected monthly comp store sales expectations for August, September and October. We will be reporting August sales on September 1. [Operator Instructions] Thank you and have a good day.