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TJX shares fall on disappointing quarterly sales | TJX shares fall on disappointing quarterly sales |
(about 3 hours later) | |
Retail group TJX has reported soft sales growth, further clouding the outlook for the US retail industry. | Retail group TJX has reported soft sales growth, further clouding the outlook for the US retail industry. |
The owner of chains such as Marshalls, TJ Maxx and HomeSense, said sales at stores open for at least a year rose 1% in its first quarter. | The owner of chains such as Marshalls, TJ Maxx and HomeSense, said sales at stores open for at least a year rose 1% in its first quarter. |
TJX also said profits would decline in the current quarter, sending shares down more than 3% in New York. | TJX also said profits would decline in the current quarter, sending shares down more than 3% in New York. |
The forecast highlighted the challenges facing even discounters, which had been considered a retail bright spot. | |
Stores in many sectors are under pressure as online competitors claim an increasing share of consumer spending. | Stores in many sectors are under pressure as online competitors claim an increasing share of consumer spending. |
But discounters have held their own in recent years, with some firms such as Nordstrom relying on their cut-price brands for growth. | But discounters have held their own in recent years, with some firms such as Nordstrom relying on their cut-price brands for growth. |
The 1% year-on-year sales growth at TJX was the slowest of any quarter since 2014 and marked a major slowdown from last year's 7%. | The 1% year-on-year sales growth at TJX was the slowest of any quarter since 2014 and marked a major slowdown from last year's 7%. |
Chief executive Ernie Herrman said the disappointing results were partly due to bad weather. He said sales picked up at the end of the quarter, echoing observations from other retailers. | Chief executive Ernie Herrman said the disappointing results were partly due to bad weather. He said sales picked up at the end of the quarter, echoing observations from other retailers. |
TJX has more than 3,800 stores worldwide and operates the TK Maxx chain in the UK. | TJX has more than 3,800 stores worldwide and operates the TK Maxx chain in the UK. |
Total sales for the quarter rose 3.2% to $7.8bn despite a slide in sales outside North America. Profits rose 5.5% to $536.3m. | Total sales for the quarter rose 3.2% to $7.8bn despite a slide in sales outside North America. Profits rose 5.5% to $536.3m. |
In Europe, sales in the UK were weaker than on the continent. Executives said they are taking wait-and-see approach, pointing to uncertainty related to Brexit. | In Europe, sales in the UK were weaker than on the continent. Executives said they are taking wait-and-see approach, pointing to uncertainty related to Brexit. |
The firm hopes to expand to more than 5,600 stores globally over the long term, including opening about 250 locations this year. | The firm hopes to expand to more than 5,600 stores globally over the long term, including opening about 250 locations this year. |
This summer the firm will introduce HomeSense to the US market, building on demand for home furnishings. | This summer the firm will introduce HomeSense to the US market, building on demand for home furnishings. |
"In the current volatile retail environment when many other retailers are closing, we are in a great position to be opportunistic," Mr Herrman said. | "In the current volatile retail environment when many other retailers are closing, we are in a great position to be opportunistic," Mr Herrman said. |
TJX said online shopping was helping the company in a way by allowing it to "police" prices and prove to customers it offered good deals. | TJX said online shopping was helping the company in a way by allowing it to "police" prices and prove to customers it offered good deals. |