TJX First-Quarter Profit Falls 20 Percent

FRAMINGHAM, Mass.-First-quarter net income for The TJX Cos. took a 20 percent dive to $266 million, as rising expenses and reduced gross margin took its toll.

Selling, general and administrative expenses jumped 16 percent in the quarter, which ended on April 30, and rose 191 basis points as a percentage of sales to 18.3 percent. TJX said the rise in expenses occurred because of costs related to the consolidation of the A.J. Wright division and the conversion of the stores into T.J. Maxx, Marshalls and HomeGoods stores. In addition, gross margin dropped 58 basis points in the quarter to 26.7 percent.

These factors offset what Carol Meyrowitz, TJX's CEO, termed "strong sales results in the face of our most challenging year-over-year comparisons of any quarter this year." Net sales in the quarter rose 4 percent to $5.2 billion, including a rise of 2 percent in same-store sales, coming off a 9 percent comparable-store pickup in last year's first quarter. Meyrowitz added that the company's chains were able to boost sales in spite of unfavorable weather in many of the U.S. and Canadian regions in the quarter.

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