TJX shares fall on disappointing quarterly sales

TJ Maxx store

Retail group TJX has reported soft sales growth, further clouding the outlook for the US retail industry.

The owner of chains such as Marshalls, TJ Maxx and HomeSense, said sales at stores open for at least a year rose 1% in its first quarter.

TJX also said profits would decline in the current quarter, sending shares down more than 3% in New York.

The forecast highlight the challenges facing even discounters, which had been considered a retail bright spot.

Stores in many sectors are under pressure as online competitors claim an increasing share of consumer spending.

But discounters have held their own in recent years, with some firms such as Nordstrom relying on their cut-price brands for growth.

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The 1% year-on-year sales growth at TJX was the slowest of any quarter since 2014 and marked a major slowdown from last year’s 7%.

Chief executive Ernie Herrman said the disappointing results were partly due to bad weather. He said sales picked up at the end of the quarter, echoing observations from other retailers.

TJX has more than 3,800 stores worldwide and operates the TK Maxx chain in the UK.

Image captionTK Maxx opened its first Australian store this year

Total sales for the quarter rose 3.2% to $7.8bn despite a slide in sales outside North America. Profits rose 5.5% to $536.3m.

In Europe, sales in the UK were weaker than on the continent. Executives said they are taking wait-and-see approach, pointing to uncertainty related to Brexit.

The firm hopes to expand to more than 5,600 stores globally over the long term, including opening about 250 locations this year.

This summer the firm will introduce HomeSense to the US market, building on demand for home furnishings.

“In the current volatile retail environment when many other retailers are closing, we are in a great position to be opportunistic,” Mr Herrman said.

TJX said online shopping was helping the company in a way by allowing it to “police” prices and prove to customers it offered good deals.