TJX says it will boost worker pay as its profit rises
Discount apparel retailer TJX (TJX) on Wednesday reported an 11.3% rise in quarterly profit and said it would raise wages in the United States to a minimum of $9 per hour from June.
The move matches Wal-Mart’s (WMT) wage hike announced last week.
TJX also said it would buy back up to $1.8 billion-$1.9 billion of shares this fiscal year, $100 million-$200 million more than last year.
TJX said net income rose to $648.2 million, or 93 cents per share, in the fourth quarter ended Jan. 31 from $582.2 million, or 81 cents per share, a year earlier.
Revenue rose 6.3% to $8.3 billion. Same-store sales increased 4%.
(For more on TJ Maxx, read Beth Kowitt’s recent Fortune feature on the retailer.)
Retail giant Wal-Mart last week said it will lift its minimum U.S. wage to $9 an hour this year and $10 in 2016, raising the ante in a tightening labor market where low-skilled workers easily move between retailers and fast-food chains.
Labor and shareholder activists are expected to use the news to ratchet up pressure on companies that have so far faced less scrutiny than Wal-Mart, the largest private U.S. employer with a workforce of 1.3 million.
“This is the largest retailer out there so I think others are going to have to follow,” said Brian Yarbrough, analyst at Edward Jones, naming Target (TGT) and Staples (SPLS) among other national retailers that may look to revise their pay scales. “All the restaurants are going to be under pressure as well.”
Check out our latest cover story on Target by Fortune’s Phil Wahba.