Great ResignationInflationSupply ChainsLeadership

TJ Maxx raises wages, following Wal-Mart’s lead

February 26, 2015, 12:15 AM UTC
TJX Companies CEO Carol Meyrowitz
FRAMINGHAM, MA - APRIL 12: TJX Companies CEO Carol Meyrowitz is photographed at TJ Maxx in Framingham, MA on Monday, April 12, 2010. She is being featured for the Globe 100. (Photo by Yoon S. Byun/The Boston Globe via Getty Images)
Boston Globe via Getty Images

It didn’t take long for a big retailer to follow the lead of Wal-Mart Stores in raising minimum pay for workers.

TJX (TJX), owner of the T.J. Maxx and Marshalls discount chains, said on Wednesday it would raise its minimum wage to $9 an hour in June and to $10 next year.

The announcement comes less than a week after Wal-Mart (WMT), the world’s largest retailer, announced that it was giving half a million U.S. workers a raise, bringing its minimum hourly pay to $9 in 2015 and $10 next year.

Analysts had predicted that other low-wage employers would be under pressure to follow the lead of Wal-Mart, the largest private U.S. employer with 1.3 million workers.

The moves come against the backdrop of a tightening labor market as the U.S. economy continues to grow at a healthy rate, which has ratcheted up competition for workers. The jobless rate is at a 6-1/2-year low of 5.6 percent.

“This pay initiative is an important part of our strategies to continue attracting and retaining the best talent in order to deliver a great shopping experience, remain competitive on wages in our U.S. markets and stay focused on our value mission,” TJX Chief Executive Carol Meyrowitz said in a statement.

TJX Cos, which also owns the HomeGoods and Sierra Trading Post chains, said higher wages would lower its earnings by 4 percent while the strong dollar would cut earnings by 5 percent in the year ending Jan. 30, 2016.

TJX forecast a profit of 64 to 66 cents per share for the first quarter and $3.17 to 3.25 per share for the full year. Analysts on average were expecting 72 cents per share for the current quarter and $3.50 for the full year, according to Thomson Reuters I/B/E/S.

The company also said it would buy back about $1.8 billion-$1.9 billion of shares this fiscal year.

TJX said its net income for the fourth quarter ended Jan. 31 rose 11.3 percent to $648.2 million, or 93 cents per share. Revenue rose 6.3 percent to $8.3 billion while same-store sales increased 4 percent.

Analysts on average had expected a profit of 90 cents per share and revenue of $8.26 billion.

Shares of TJX reversed earlier losses to trade up 3.3 percent at $69.38.