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TJX Sales Recover from Quarterly Loss

TJX Cos Inc said it was seeing very strong sales as its stores reopened post-coronavirus lockdowns. This offers hope for a swift recovery after a huge quarterly loss from closures and a resulting decline in sales. This is sending its shares up 6% on Thursday in the stock market.

The discount chain is seen as among the better-positioned retailers as its value-priced goods are attractive to shoppers. They are looking to save money in the face of increased uncertainty about jobs and household finances.

Chief Executive Officer, Ernie Herrman, said, although it’s still early and the retail environment remains uncertain, they have been encouraged.  This comes from the very strong sales they have seen with their initial reopenings.

They believe this very strong start speaks to their compelling value proposition. This also includes the appeal of their treasure-hunt shopping experience, as well as pent-up demand.

Stock market news reports TJX has reopened more than 1,600 of its about 4,500 stores worldwide. The company is the parent of Marmaxx stores.

TJX’s sales update was a sharp contrast to what other mall-based retailers have said. This was according to MKM Partners analyst Roxanne Meyer.

They think TJX traffic disproportionately benefits from its off-mall, high traffic locations, and its cult-like customer following.

TJX Says No Dividend for Q1 and Current Quarter

In contrast, department store chains that have been through recessions and economic uncertainties found it necessary to seek bankruptcy protection. These department store chains include J.C Penney and Neiman Marcus, as losses mount and mall traffic declines.

In March, TJX halted both online and offline operations to prevent its employees from catching COVID-19.

The company said there will be no dividend for the first quarter. Neither does it expect to pay any in the current quarter.

For the quarter ended May 2, its net sales fell 52.5% to $4.41 billion. This was from $9.28 billion a year ago.

In stocks, net loss came in at $887.5 million, or 74 cents per share. This was against earnings of $700.2 million, or 57 cents, a year ago.

The company’s first-quarter results felt a negative impact by the coronavirus pandemic. It continues to expect the ongoing COVID-19 crisis to continue to significantly impact their results.

It said there is a  high level of uncertainty around stores reopening, the current retail environment, and future consumer demand. Therefore it remains difficult to forecast a financial outlook for the remainder of the year.



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