By Chelsey Dulaney
TJX Cos., the parent company of T.J. Maxx, Marshalls and
HomeGoods, unveiled plans on Wednesday to boost its employee pay to
$9 an hour starting this summer, mirroring a move made last week by
Wal-Mart Stores Inc.
Shares fell 1.7% in premarket trading as the company also gave a
weak outlook for its newly-started fiscal year and current
quarter
By 2016, TJX said it plans to pay all hourly U.S. workers who
have been employed for six months at least $10 per hour. As of last
February, TJX had about 191,000 employees, many of whom work less
than 40 hours a week.
Wal-Mart announced last week that it plans to boost pay for its
U.S. employees to at least $10 an hour by next year, well above the
minimum wage, signaling a tightening labor market and rising
competition for lower-paid workers.
TJX also unveiled plans to boost its quarterly dividend by 20%
and buy back up to $1.9 billion in stock in the year ending next
January.
Still, TJX gave a disappointing outlook for its newly-started
fiscal year, citing foreign exchange impacts that are weighing on
much of corporate America.
For the full year, the company forecast per-share earnings of
$3.17 to $3.25, well below the $3.50 a share analysts had recently
expected, according to Thomson Reuters. The outlook includes a 5%
negative impact from currency.
For its current quarter, TJX projected per-share earnings of 64
cents to 66 cents, below the 72 cents analyst had expected. The
forecast includes a 4% negative impact from currency.
Off-price retailers like TJX have done better than the overall
retail industry lately amid stronger traffic as consumers remain
cost-conscious. Last month, Macy's Inc. said it was considering
starting an off-price business for its namesake brand.
TJX's sales, excluding newly opened or closed locations, grew 4%
in the period, up from 3% growth a year earlier. HomeGoods led
same-store sales growth with an 11% increase, while TJX Canada
posted a 7% increase. The segment that includes T.J. Maxx and
Marshalls posted a 3% increase in same-store sales.
Overall, TJX reported a profit of $648.2 million, or 93 cents a
share, up from $582.3 million, or 82 cents a share, a year earlier.
TJX had forecast per-share earnings of 86 to 90 cents.
Sales grew 6% to $8.3 billion, topping the $8.26 billion
analysts polled by Thomson Reuters had expected.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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