Off-price giant hits it out of the park in Q2 amid surging sales

8/21/2018
Value-seeking consumers helped The TJX Cos. blow past Street estimates in its second quarter, with the chain posting strong sales increases across its divisions.

Net income rose to $739.6 million, or $1.17 per share, in the quarter ended Aug. 4, from $553 million, or 85 cents per share, in the year-ago period. The Street had forecast earnings per share of $1.05. Adjusted EPS was 99 cents.

Revenue rose 12% to $9.33 billion, up from $8.36 billion last year. Analysts had expected sales of $8.99 billion.

Total same-store sales rose 6%, led by Marmaxx (includes T.J. Maxx and Marshalls) with a 7% increase. Same-store sales rose 6% at TJX Canada, 4% at TJX International, and 3% HomeGoods.

“Customer traffic was once again the primary driver of our comp store sales increases at all of our divisions as we continue to reach a very wide customer demographic,” said Ernie Herrman, CEO and president of The TJX Companies. “Further, this marks the 16th straight quarter of customer traffic increases for TJX and Marmaxx. We have been attracting new customers to all our divisions, a significant share of whom are younger customers.”

Neil Saunders, managing director, GlobalData Retailer, commented that TJX’s success in growing its share of shoppers, especially among younger demographics, has important long-term implications.

“Positively, this shows that the concept is future-proof in terms of being relevant to younger cohorts and that there is headroom for further growth, even among digitally savvy consumers,” Saunders said. (Click here for more commentary.)

On the heels of its strong second quarter performance, TJX raised its guidance for full-year earnings per share and comparable store sales growth.

“Looking forward, the third quarter is off to a very strong start and we have many exciting opportunities we are pursuing in the second half of the year,” said Herrman.

As of August 4, 2018, TJX operated a total of 4,194 stores across the the United States, Canada, the United Kingdom, Ireland, Germany, Poland, Austria, the Netherlands, and Australia. These include 1,236 T.J. Maxx, 1,077 Marshalls, 716 HomeGoods, 33 Sierra Trading Post, and 8 HomeSense stores in the United States; 270 Winners, 120 HomeSense, and 79 Marshalls stores in Canada; 552 T.K. Maxx and 61 HomeSense stores, and 42 T.K. Maxx stores in Australia.
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