TJX to Boost Pay for U.S. Employees to $9 an Hour by June--Update

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 [e-mail]

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