TJX Slips To Loss In Q1, Net Sales More Than Halve

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The TJX Companies Inc. (TJX) Thursday reported a loss for the first quarter, compared to profit in the prior year. Quarterly net sales dropped 52.5 percent, hurt by the temporary closure of its stores due to the Covid-19 pandemic.

"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.

In Thursday pre-market trade, TJX is trading at $54.00 up $3.17 or 6.24 percent.

The company has decided not to declare a dividend for the first quarter of fiscal 2021, and at this time, does not expect to declare a dividend in the second quarter.

The company has drawn down full amount of $1 billion from its revolving credit facilities. It issued $4 billion in aggregate principal of 5, 7, 10 and 30-year senior notes at an average weighted rate of 3.85 percent.

The company started to reopen stores in select states and countries starting from May 2, 2020.As of today, the company has reopened more than 1,600 of its stores worldwide. In the U.S., the company has fully or partially reopened in 25 states, the retailer said.

The company expects to continue reopening stores around the world in a phased approach as more states and countries reopen for retail. The company believes that it could be mostly reopened by the end of June based on current government guidance.

Looking ahead, the company continues to expect its results to be significantly impacted by the ongoing COVID-19 pandemic. Due to the high level of uncertainty around store reopenings, it remains difficult to forecast a financial outlook for the remainder of the year. Therefore, the company does not provide a fiscal 2021 financial outlook at this time.

The company reduced Fiscal 2021 capital expenditure plan to a range of $400 million to $600 million from $1.4 billion.

The off-price apparel and home fashions retailer reported that its net loss for the first quarter was $887.49 million or $0.74 per share, compared to net income of $700.18 million or $0.57 per share in the prior year quarter. Analysts polled by Thomson Reuters expected the company to report a loss of $0.15 per share for the first-quarter. Analysts' estimates typically exclude special items.

The company's first quarter results were negatively impacted by the temporary closure of its stores for approximately half of the quarter due to the COVID-19 pandemic.

The company wrote down inventory by about $500 million as a result of the company's store closures due to the COVID-19 pandemic. It continued to incur payroll expenses while stores were closed.

Net sales for the quarter dropped 52.5 percent to $4.41 billion from $9.28 billion in the prior year. Analysts expected revenues of $5.17 billion for the quarter.

For the month of February, the company reported a 5% consolidated comp increase driven by customer traffic. All four major divisions had a February comp increase of 5% or better.

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