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TJX revenue soars in Q1

The nation’s leading off-price retailer reported better-than-expected sales in its first quarter fueled by a strong performance from T.J. Maxx and Marshalls.

The company's net income rose 33.6% to $716.4 million, or $1.13 per share, in the quarter ended May 5, with diluted earnings per share of $1.13. Adjusted earnings per share were 96 cents, short of estimates.

Net sales increased 11.6% to $8.69 billion, beating analysts' estimate of $8.47 billion. Total same-store sales rose 3%, also more than expected, with a 4% increase at the Marmaxx division (T.J. Maxx and Marshalls) and a 2% increase at Home Goods.

“Customer traffic was once again the primary driver of our comparable store sales increases at each of our four large divisions,” said Ernie Herrman, CEO and president TJX Companies. “Based on our strong first quarter performance, we are updating our outlook for full-year earnings per share. We believe that the consistency of our customer traffic increases demonstrates the strength and resiliency of our business and our ability to succeed through many types of economic and retail environments. Looking ahead, the second quarter is off to a strong start.”

Analyst Neil Saunders, managing director, GlobalData, said that TJX’s strong apparel sales was evident that its mature brands “still have some more runway - especially in terms of capturing new customers - without the need to open more stores or grow digitally.” He also said they indicate that TJX's brand philosophy works across all economic conditions.

“Thanks to tax cuts, bonuses, and refunds, most consumers saw their finances improve over the first quarter,” Saunders said. “This includes more constrained households. However, this fillip to income did not change the value mindset. Our data show that even those with rising incomes remain value-conscious and are keen to make their dollars stretch as far as they can. This means the game is still being played firmly in TJX's ballpark.”

Looking ahead, TJX raised its full-year adjusted profit forecast to $4.04 to $4.10 per share, from $4.00 to $4.08,

As of May 5, 2018, the company operated a total of 4,141 stores in nine countries, the United States, Canada, the United Kingdom, Ireland, Germany, Poland, Austria, the Netherlands, and Australia, and three e-commerce sites. These include 1,231 T.J. Maxx, 1,073 Marshalls, 690 HomeGoods, 32 Sierra Trading Post, and 4 Homesense stores in the United States; 269 Winners, 119 HomeSense, and 78 Marshalls stores in Canada; 549 T.K. Maxx and 55 Homesense stores in Europe; 41 T.K. Maxx stores in Australia, and various web sites.
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