The TJX Companies, Inc. (NYSE: TJX) slipped to a loss in the first quarter of 2021 from a profit last year, due to the negative impact of the temporary closure of its stores for about half of the quarter due to the COVID-19 pandemic.
The vast majority of the variance was a result of lost merchandise margin, corresponding to the lost sales from temporary store closures. The company also had an inventory write-down charge and continued to incur payroll expenses while stores were closed.
The company began reopening its stores on May 2, 2020. While still early, the company is seeing very strong initial sales overall at stores across all states and countries that have been reopened at least a week. The company suspended its share repurchase program and decided not to declare a dividend for Q1 and Q2.
The company lowered fiscal 2021 capital expenditures plan from $1.4 billion to a range of $400-600 million and reduced fiscal 2021 store openings to about 50, paused the majority of its planned store remodels, and delayed a significant portion of its distribution center, home office, and IT spending.
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