The TJX Companies, Inc. (NYSE:TJX) Q3 2018 Earnings Conference Call Transcript
Nov 14, 2017 • 11:00 am ET
Ladies and gentlemen, thank you for standing by. Welcome to the JTX Companies (sic) [ TJX Companies ] Third Quarter Fiscal 2018 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instruction) As a reminder, this conference call is being recorded November 14, 2017.
I would like to turn the conference call over to Mr. Ernie Herrman, CEO and President of The TJX Companies, Inc. Please go ahead, sir.
Thanks, Dory. Before we begin, Deb has some opening comments.
Thank you, Ernie, and good morning.
(Forward-Looking Cautionary Statements)
Thank you, and now I'll turn it back over to Ernie.
Good morning. Joining me and Deb on the call is Scott Goldenberg. I want to begin our call today by saying that our hearts go out to all of our associates, their families and everyone who was affected by the recent hurricanes. The personal stories we have heard from our team in the field make it clear how devastating the situation has been to so many people. As an organization, we have extended our help and support to our associates and their families in Texas, Florida and in Puerto Rico, where we opened relief centers in some of our stores. We have made significant corporate contributions to the relief efforts of the American Red Cross and Save the Children and the response to our in-store fundraising campaigns has been tremendous. Thanks to the generosity of our customers. We know the recovery is ongoing and will be long-lasting. As the CEO of this Company, I could not be prouder of how our Organization, our associates and our customers have responded to provide their care and support during such a difficult time.
Moving now to our third quarter results. Third quarter consolidated comp sales were flat versus a strong 5% increase last year. Earnings per share were $1 and at the high end of our plan. During the quarter, the hurricanes negatively impacted our top-and bottom-line results. Additionally, we believe that warmer temperatures in the US during the quarter dampened demand for apparel at Marmaxx. Beyond this, we believe we could have done a better job in certain apparel categories in Marmaxx and therefore left some business on the table. That said, our non-apparel sales were strong. Also, as the weather turned more seasonable in the second half of October, we saw sales trends improve at Marmaxx. Importantly, I am very pleased with our customer traffic, which was up strongly across all four major divisions, including up 2% at Marmaxx for the quarter. Further, merchandise margin was up again, similar to the strong increases we saw in the first and second quarters. This is a testament to the flexibility of our off-price business model. Our buyers capitalized on excellent opportunities in the marketplace, which help drive mark-on. We remained extremely disciplined with our lean inventory levels and we're very strategic in how we flowed merchandise to our stores. The fourth quarter