TJX Companies Inc. (NYSE:TJX)
October 06, 2011 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 October 6, 2011, and I would like to welcome you to our investor call to discuss our September 2011 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 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 the United States copyright laws. [Operator Instructions]
Now to recap the numbers. Sales for the 5-week period ended October 1, 2011, were $2.2 billion, up 6% over the $2.1 billion achieved during the comparable 5-week period ended October 2, 2010. For the 35 weeks, ended October 1, 2011, sales reached $14.6 billion, a 6% increase over last year's $13.8 billion. Consolidated comparable store sales for September 2011 increased 4%, which was above our expectations. For the 35-week year-to-date period, consolidated comp store sales increased 3%.
Our September comp sales exceeded our expectations on both a consolidated basis and at The Marmaxx Group. Business rebounded nicely after hurricane Irene, and given the generally sluggish economic environment and some unseasonably warm weather in certain markets, we're particularly pleased. Additionally, sales were not promotionally driven and merchandise margins in September remained solid.
As we move into the holiday selling season, we are excited by our opportunity, both from the perspective of the goods we are seeing in the marketplace and by the gift-giving initiatives and strong marketing that we have planned. While we are very pleased with the momentum of our [indiscernible] business, October is a very weather-sensitive month and foreign exchange rates had been very volatile. Therefore, we are maintaining and are very comfortable with our prior guidance of third quarter diluted earnings per share in the range of $1.03 to $1.07, which would represent a 12% to 16% increase over $0.92 per share last year.
For October, we continue to expect comp sales to increase by 2% to 3% on both a consolidated basis and at The Marmaxx Group. Now divisional comp store sales for September were as follows: Beginning with our U.S. Divisions, at The Marmaxx Group, comp store sales increased by a very strong 5% in September, well above our expectations. I will go into more detail on Marmaxx in a moment. Comp store sales at HomeGoods increased by a very strong 8% in September. It is terrific to see HomeGoods' consistently strong performance continue. Customers are loving HomeGoods' exciting values and our always changing assortments of home fashions from around the world.
Now to TJX Canada. At Winners and HomeSense combined, comp store sales decreased 2% in September compared with a 4% increase last year. Performance in Canada was about where we expected to be at this time. We are seeing progress at this division as we continue to work on improving certain apparel categories, which we have discussed on prior calls.
Moving to TJX Europe. At T.K. Maxx and HomeSense combined, comp store sales decreased 2% in September. Comp sales in Europe were up 3% until the end of the fourth week of the month when weather turned extremely warm in our European markets and significantly hindered demand for fall fashions.
From an execution standpoint, we continue to be encouraged by the progress we are seeing and believe that we will see greater improvement in this business in the key months ahead, despite the weak consumer environment in Europe. To give some further color to September's results at the Marmaxx Group, geographically, comps were strong across the country. The Northeast, mid-Atlantic and Southeast, including Florida, outperformed the chain. The Southwest was in line and the West Coast, only slightly trailed the chain's average. The Midwest, while up low-single digits, trailed the chain.
As to merchandise categories at Marmaxx, apparel comps increased 6% and home fashions increased 3% in September.
Summing up, we are very pleased with our overall performance in September. The marketplace is full of off-price buying opportunities for great brands and we are in an excellent position to offer customers terrific values on exciting gift-giving assortments for the holiday season. Again, while we continue to be pleased with the momentum of our business, October is a very weather-sensitive month and foreign exchange rates have been very volatile. Therefore, we remain very comfortable with our prior guidance of third quarter diluted earnings per share in the range of $1.03 to $1.07.
For October, we continue to expect comp sales to increase by 2% to 3% on both a consolidated basis and at the Marmaxx Group. We will be reporting October sales on November 3, 2011, and third quarter earnings on November 15, 2011.
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