The TJX Cos. posted on Wednesday an increase in profit of 11% in the fourth quarter and said the company would increase its employee pay to $9 per hour. TJX also announced its plans to expand into another two global markets.
On a downbeat note, the retailer in off-price items said it was expecting a strong U.S. dollar to lower is profit by as much as 5% and the new hikes in wages to lower its earnings by 4% this fiscal year, which ends January 30, 2016.
However, the big story that came out of the earnings report by the company was the hike in wages. TJX said all its hourly workers in the U.S. would start earning a minimum of $9 per hour starting sometime this summer. At sometime during 2016, all U.S. hourly store associates in the U.S. who have worked for the company for six months or more, would earn a minimum of $10 per hour, said the company.
The move by TJX to increase its employees’ wages comes only one week after a similar wage hike was announced by Walmart. The move puts even more pressure on other retailers in the U.S. to follow suit.
Chief Executive Officers Carol Meyrowitz said the quarter that ended January 31 saw TJX post net income of $648.1 million, which was up from the same period one year ago of $582.1 million.
Net sales for the quarter were $8.2 billion, which was an increase of 6% over the same period last year. Sales at same stores were higher by 4% over the increase of 3% from last year.
Growth was led by Homegoods with an increase of 11%, while a 7% increase was seen by Canada. Marshalls and TJ Maxx both posted gains of 3%. We are pleased by same store sales that were driven almost in their entirety by customer traffic as customers responded to exciting merchandise, effective marketing and amazing values.