FRAMINGHAM, Mass.-A larger-than-expected negative impact from foreign currency exchange rates muted The TJX Cos.’ first-quarter net income to a 0.3 percent increase.
Carol Meyrowitz, TJX’s CEO, said the impact of the exchange rates exceeded the company’s guidance for the quarter. Meyrowitz added that sales in the quarter, which ended on May 3, “were not as strong as we would have liked, predominantly in our apparel business.” Net sales rose 4.9 percent to $6.5 billion, including a same-store sales increase of 1 percent.
First-quarter net sales in the company’s HomeGoods division were up 9.7 percent, including a same-store sales pickup of 3 percent. For the Marmaxx division, net sales edged up 2.4 percent with same-store sales flat in the quarter. On the international side, TJX Europe posted sales gains of 23.9 percent overall and 8 percent for same stores, and TJX Canada recorded a drop of 5.7 percent in overall sales and 1 percent in same-store checkouts.
Companywide gross margin was down 44 basis points to 27.9 percent. Selling, general and administrative expenses rose 5.3 percent in dollars and seven basis points as a percentage of sales, to 16.5 percent.
Meyrowitz said TJX has entered the second quarter “in excellent position.” The company’s inventory levels are lean, she added, and it has “exciting marketing initiatives” (unspecified in a company statement) to drive traffic. “We are very confident in our ability to achieve our plans for the remainder of 2014 and beyond, as we continue to bring value around the world,” she said.