Nasty winter blamed for TJX Cos. net income drop

The harsh winter weather plaguing retailers has even proved to be a speed bump for high-flying, off-price darling TJX Cos. Inc.

The Framingham owner of T.J. Maxx, Marshalls and HomeGoods posted fourth-quarter earnings that missed Wall Street estimates and reported markdown-induced lower merchandise margins for the first time in 10 quarters.

"It's not a huge deal at this point," Sterne Agee analyst Ike Boruchow said. But, he added: "For the company to disappoint on earnings and then guide (the first quarter) and next year below the Street, it's not a good thing when your stock is trading at a hefty premium.

TJX shares dropped 
1.15 percent yesterday to $60.29.

The company's net income fell 3.7 percent to $582 million for the period ending Feb. 1, or 81 cents per share. Analysts expected 82 cents per share. Sales rose 1 percent to $7.8 billion.

A very promotional retail environment forced TJX to get aggressive on pricing and make markdowns in January after a slower holiday period to clear inventory ahead of the new season, Boruchow said.

But Wall Street is giving retailers a "pass" right now in terms of missed earnings because of inclement weather, said analyst Ken Perkins of Retail Metrics.

"It's been so severe and so disruptive for so many retailers and particularly for TJX," he said. "They have a very strong presence in the Northeast, mid-Atlantic and Midwest."

But there is concern that TJX and competitor Ross Stores Inc. will have more difficulty buying merchandise this year because other retailers are ordering more cautiously, and manufacturers won't have excess product on hand for them to pick up, Perkins said.

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