TJX announces profit growth, wage hike

Write a Comment

By Emily Micucci

TJX Cos. delivered good news to shareholders and employees Wednesday, as the Framingham-based discount retailer announced profit and sales growth as well as plans to increase wages for U.S. employees at its HomeGoods, Marshalls, T.J. Maxx and Sierra Trading Post sites.

In its fourth quarter, which ended Jan. 31, TJX reported net income of $648.2 million, up from $582.2 million a year earlier. Annual net income rose to $2.2 billion, up from $2.1 billion the previous year, while sales increased 6 percent for both the quarter and the full year.

“We are very pleased to end 2014 with excellent results in the fourth quarter,” CEO Carol Meyrowitz said in an earnings statement, adding that the company’s earnings-per-share growth of 15 percent in the fourth quarter over the previous year, and comparable store sales gains of 4 percent, exceeded expectations.

“We are particularly pleased our (comparable store sales) were almost entirely driven by customer traffic, as consumers responded to our exciting merchandise assortments, amazing values and effective marketing,” Meyrowitz said.

At 93 cents, quarterly earnings per share beat a consensus earnings estimate of 90 cents, according to Zacks Investment Research, up from 81 cents a year earlier. Earnings for the year increased 12 percent to $3.16.

TJX said it intends to increase its common stock dividend to 21 cents per share. That increase is subject to the approval of the company board of directors, and will be payable in June.

TJX also announced plans to repurchase between $1.8 and $1.9 billion of stock during the fiscal year ending Jan. 30, 2016. That’s $100 to $200 million more than last year, and represents 4-percent of the company’s outstanding shares at current prices.

“In fiscal 2016, we plan to continue investing to support our growth while distributing cash to our shareholders. Our capital spending plans include investing in new stores, store remodels and our supply chain and infrastructure.

“Simultaneously, we plan to significantly increase both our regular quarterly dividend and our large share buyback program,” Meyrowitz said.

Minimum wage to rise to at least $10 in 2016

For U.S. store associates, TJX is planning to boost minimum wages for full- and part-time employees to a minimum of $9 per hour beginning in June. Sometime during 2016, all hourly U.S. store associates who have been employed for at least six months will earn at least $10, the company said.

“This pay initiative is an important part of our strategies to continue attracting and retaining the best talent in order to deliver a great shopping experience for our customers, remain competitive on wages in our U.S. markets, and stay focused on our value mission,” Meyrowitz said.