TJX Companies Inc. continues to prove that off-price is the sweet spot in the current retail climate.
The parent of discount retailers Marshalls and T.J. Maxx reported second-quarter results Tuesday that handily topped market forecasts.
The company said its second-quarter net income advanced 2.3 percent year-over-year, to $562.2 million, or 84 cents per diluted share, beating analysts’ estimates for diluted earnings per share of 81 cents.
Net sales for the quarter climbed 7 percent, to $7.9 billion, while consolidated comparable store sales increased 4 percent on top of the prior year’s 6 percent increase.
“It was terrific to see our strong customer traffic and comps continue in the second quarter,” said president and CEO Ernie Herrman in a release. “We are extremely pleased that our comp store sales growth was almost entirely driven by customer traffic. We are convinced that we are gaining consumer market share as our excellent values on a compelling selection of brands and fashions are drawing customers to our retail brands around the world.”
He added, “We believe our robust sales, customer traffic and merchandise margins all speak to the strength of our off-price retail model.”
In lieu of the better-than-expected Q2 results, the company raised its full-year guidance and now expects comp sales to increase 3 percent to 4 percent and earnings per share to be in the range of $3.39 to $3.43.
The firm’s third-quarter predictions, however, may have been softer than expected, weighing on the TJX shares in midday trading. (As of noon ET, TJX shares remained down nearly 5 percent.)
For the third quarter, the company expects diluted EPS in the range of 83 to 85 cents, compared to 86 cents last year, based on an estimated consolidated comparable growth of 2 to 3 percent.
Still, Herrman remained upbeat and said the quarter was “off to a solid start.”
“We see plentiful opportunities for our business in the second half of the year and beyond,” the CEO said. “We remain laser focused on achieving our goals for 2016 and are passionate about surpassing them. We continue on the road to becoming a $40 billion-plus company.”