TJX Companies Inc. (NYSE:TJX)
November 03, 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 November 3, 2011, and I would like to welcome you to our Investor Call to discuss our October 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 and uncertainties 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 October 29, 2011 were $1.9 billion, up 4% over the $1.8 billion achieved during the 4-week period ended October 30, 2010.
For the 39 weeks ended October 29, 2011, sales reached $16.5 billion, up 6% over last year's $15.6 billion.
Consolidated comparable store sales for October 2011 increased 3%, which was at the high end of our expectations. For each of the 13-week third quarter and the 39-week year-to-date period, comp store sales also increased 3%.
There are several points worth noting regarding our October sales. First, comp store sales on both consolidated basis and at our largest division, the Marmaxx Group, came in at the high-end of our expected range. This was despite unseasonably warm weather that had a significant impact in key markets in the U.S. and in Canada, negatively impacting sales in cold-weather apparel categories.
Further, we are pleased with the progress we're making at TJX Europe. Importantly, the month ended on a strong note overall, giving us good momentum as we enter the holiday selling season. While we are pleased that sales came in a bit higher than our most recent guidance, there has also been significant movement in Canadian currency recently. Therefore, we continue to expect third quarter diluted earnings per share to be solidly in the middle of our $1.03 to $1.07 range. This would represent an increase of between 12% and 16% over last year's $0.92 per share in the third quarter.
Now divisional comp store sales for October and the third quarter were as follows. Beginning with our U.S. divisions, at the Marmaxx Group, October comp store sales increased by 3%, again, at the high end of expectations. For the third quarter, comp store sales were up 4%.
I will go into further detail on Marmaxx in a moment. At HomeGoods, comp store sales increased by 7% in October, on top of a 3% increase last year. In the third quarter, comp store sales grew by 5%. We are particularly pleased with HomeGoods' performance and are excited about its prospects in the fourth quarter and beyond.
Moving to TJX Canada, at Winners and HomeSense combined, comp store sales were flat in October. For the third quarter, comps decreased 2%. Unseasonably warm weather had impeded sales of apparel in Canada, while home categories that are less weather-sensitive performed better.
We are encouraged by the progress that Winners is making in the children's category, while we are still working on the Mixed in Missus apparel. We also believe that TJX Canada is well-positioned for holiday gift-giving.
We continue to be pleased with Marshalls in Canada which is receiving a very enthusiastic response and provides a growth catalyst for this division in the short and long-term.
Now to TJX Europe, where we are pleased that our October comp store sales increased by 5% at T.K. Maxx and HomeSense combined. For the third quarter, comp store sales were flat. We believe this division is gaining traction as our efforts to improve the organizational structure and performance are starting to yield better results.
To give some additional color to October's results at the Marmaxx Group. Geographically, the Southwest Florida and the Southeast all performed well above the chain average, as unseasonably warm weather was not an issue in these regions. The Midwest, Mid-Atlantic and West Coast were essentially in-line with the chain. Not surprisingly, the Northeast and New England in particular, where weather was unseasonable for the better part of the month, performed below the chain average.
Regarding merchandise categories at Marmaxx, apparel and home fashions each comped up 3%. Again sales of cold-weather apparel such as coats were on the weaker side.
Summing up, we are particularly pleased with the pickup in business that we've seen at the end of October. We believe that our strength at Marmaxx and HomeGoods, our progress at TJX Europe, and our gift initiatives in Canada bode well for the holiday selling season in the fourth quarter.
We are convinced that in this year's holiday season, value will again be key in the minds of consumers, and we expect that our stores ever-changing, exciting mix of gift items will continue to drive traffic in the months ahead. Again, although we're pleased with October sales, with the recent significant moves in the Canadian dollar, we continue to anticipate that our third quarter diluted earnings per share will be solidly in the middle of our $1.03 to $1.07 estimated range. This forecast would represent another double-digit increase in earnings per share for the third quarter.
We will be reporting third quarter earnings on Tuesday, November 15, 2011. At that time, we will provide monthly comp store sales guidance for November, December and January. Our next sales release for November sales will be on December 1, 2011.
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