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T.J. Maxx owner lowers profit, sales forecast as consumers cut spending

Stock Markets Aug 17, 2022 08:30AM ET
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© Reuters. FILE PHOTO: A T.J. Maxx store which is owned by TJX Cos Inc in Pasadena, California U.S., May 15, 2017. REUTERS/Mario Anzuoni/File Photo
 
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(Reuters) -TJX Cos Inc cut its forecast for annual earnings and same-store sales after quarterly revenue missed estimates on Wednesday, as red-hot inflation forces Americans with lower incomes to slash spending on clothing and home goods.

Analysts had warned that lack of stimulus benefits, as was the case last year, would also hit discretionary spending, particularly hurting discount retailers such as TJX (NYSE:TJX), Burlington Stores (NYSE:BURL) and Ross Stores (NASDAQ:ROST).

"U.S. comp sales for the second quarter came in lighter than we expected as we believe historically high inflation impacted consumer discretionary spending," Chief Executive Officer Ernie Herrman said.

Shares in the company, known for its Marshalls and HomeGoods store chains, fell 1.6% in premarket trading.

TJX Cos, which offers brands such as Calvin Klein and Michael Kors at prices 20%-60% lower than those at other retailers, forecast adjusted per-share earnings of $3.05 to $3.13 in fiscal 2023, compared with its prior forecast of $3.13 to $3.20.

It now expects U.S. same-store sales to decline 2% to 3%, compared with its earlier outlook of 1% to 2% increase as cash-strapped Americans prioritize spending on groceries and other essentials.

Net sales at the T.J. Maxx parent fell to $11.8 billion in the second quarter from $12.08 billion a year earlier, missing analyst expectations of $12.05 billion, according to Refinitiv IBES data.

Excluding items, TJX earned 69 cents per share, compared with market estimates of 66 cents.

T.J. Maxx owner lowers profit, sales forecast as consumers cut spending
 

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