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TJX says sales recovering after coronavirus slump

(Reuters) - TJX Cos Inc TJX.N said it was seeing very strong sales at its stores reopened post-coronavirus lockdowns, offering hope of a swift recovery after a huge quarterly loss due to closures and a resulting decline in sales, sending its shares up 6% on Thursday.

A T.J. Maxx store which is owned by TJX Cos Inc in Pasadena, California U.S., May 15, 2017. REUTERS/Mario Anzuoni

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

“Although it’s still early and the retail environment remains uncertain, we have been encouraged with the very strong sales we have seen with our initial reopenings,” Chief Executive Officer Ernie Herrman said.

“We believe this very strong start speaks to our compelling value proposition and the appeal of our treasure-hunt shopping experience, as well as pent-up demand.”

TJX, the parent of Marmaxx stores, said it has reopened more than 1,600 of its about 4,500 stores worldwide.

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

“We think TJX traffic disproportionately benefits from its off-mall, high traffic locations as well as its cult-like customer following.”

In contrast, department store chains, including J.C Penney JCP.N and Neiman Marcus, that have been through recessions and economic uncertainties in the past were forced to seek bankruptcy protection as losses mount and mall traffic declines.

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

It said there will be no dividend for the first quarter and also does not expect to pay any in the current quarter.

For the quarter ended May 2, net sales fell 52.5% to $4.41 billion. Net loss came in at $887.5 million, or 74 cents per share.

Reporting by Nivedita Balu in Bengaluru; Editing by Shinjini Ganguli

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