TJX Earnings: Hopeful Signs of Stabilization
Unlike its two biggest rivals in the off-price retail landscape, TJX Companies (NYSE: TJX) does have an e-commerce business. That said, e-commerce accounted for just 2% of the company's sales last year. TJX has focused the bulk of its attention on driving continued growth in store traffic.
That focus on brick-and-mortar sales in non-essential categories meant TJX suffered mightily during the peak of the COVID-19 pandemic earlier this year. However, on Wednesday, the off-price giant reported solid sequential improvement in its sales and earnings trends for the second quarter, which bodes well for its future recovery.
In the first quarter of TJX's 2021 fiscal year, sales plunged by more than 50%, as the company's stores were closed for about half of the period. The sudden closure of its stores also sabotaged earnings and cash flow. TJX took an inventory writedown of approximately $500 million, contributing to its pre-tax loss of $1.3 billion. Cash burn totaled nearly $3.4 billion, as the company kept current on its bills even after sales fell to virtually zero in the back half of the quarter.
Source Fool.com
