. (AP Photo/Toby Talbot)
ASSOCIATED PRESS
TJX companies reported 4and quarterly net sales of $13.9 billion. This is a 14% increase from the fourth quarter of 2021. Diluted earnings were $0.78 in the quarter. For the full year, net sales were $48.5 billion, an increase of 16% over last year. Diluted earnings were $2.70, which includes the negative impact of debt. Excluding this debt, fully diluted earnings would have been $2.85, representing the extinguishment charge of $0.15.
That tells half the story. Management said the company had been hit by cost increases in both wages and transportation. Some of the increases will be permanent as management believes salaries will remain at a higher level. On the other hand, freight increases, which stem from rising shipping and ground transportation costs, are expected to ease towards the end of the new fiscal year. Management told a meeting of analysts that it was carefully monitoring freight costs and that it was ready to sign contracts at a lower cost. It would certainly help if the company could rely on less freight cost pressures.
TJX Companies has discovered that a number of its stores around the world have had to close due to the global pandemic caused by COVID-19. Management has identified sales from open offset stores only. International businesses in Europe and Australia have experienced numerous temporary closures. These stores reported comparable sales only for the days they were open. No stores were closed in the United States in the fourth quarter, 12% were closed in Canada. 19% were closed in Europe, 19% in Australia. The total number of business closures was around 4%. For the year as a whole, the total number of business closures was 24%.
Ernie Hermann, CEO and President of TJC Companies, commented on the year’s performance saying, “Over the holiday season and throughout the year, our buyers have responded to our amazing brands, our excellent values and to our inspiring treasure hunt shopping experience Our home-based business across all of our divisions has seen phenomenal performance of open mockup only sales, and overall open only mockup store apparel sales increased to single digits in fiscal year 2022.”
It is interesting to note that inventories at the end of the year increased by $6.0 billion compared to $4.9 billion at the end of the previous year. Management blamed it on the rise in goods in transit. Nonetheless, the company said the availability of quality branded merchandise remains excellent and it is well positioned to bring fresh spring merchandise to stores and online.
The company operated 4,689 stores at year-end. This included 1284 TJMaxx, 1148 Marshalls, 850 Winners, 59 Sierra and 39 Homesense stores as well as tjmaxx.com, marshalls.com, homegoods.com and sierra.com in the United States293 Winners, 147 HomeSense and 106 Marshalls stores in Canada. 616 TKMaxx stores and 77 Homesense stores plus tkmaxx.com in Europe and 68 TKMaxx stores in Australia. Mr. Hermann envisages 6,270 stores in the next few years, he is adding 400 units in the current year.
Management expects sales to increase by around 3% for the first quarter of 2023. It hopes that most stores will be able to open year-round and allow customers to purchase values in stores.
POST SCRIPTUM : The treasure hunt at TJMaxx stores continues to attract value shoppers. Many stores have been renovated and expanded. We believe there is an abundance of banded merchandise available to TJMaxx buyers and that the company will exceed expectations.
