The off-price channel continues to win in an otherwise tepid retail environment.
The TJX Companies Inc., owner of discount store chains Marshalls and TJ Maxx, today reported third-quarter results before the market open that topped market watchers’ estimates.
The company said its net sales climbed 7 percent year-over-year, to $8.3 billion, surpassing expectations for net sales of $8.2 billion. Comparable sales also advanced 5 percent.
Reported net income slipped 6 percent year-over-year, to $549.8 million, or 83 cents per diluted share. However, adjusted diluted earnings per share, at 91 cents per share, topped forecasts, which predicted diluted EPS of 87 cents.
TJX president and CEO Ernie Herrman said the company’s mounting comp gains, in particular, significantly exceeded management’s expectations as customers continue to favor the firm’s major off-price banners. (TJX comps also rose 5 percent in the comparable period.)
“We are extremely pleased that our strong momentum in customer traffic and sales continued in the third quarter,” Herrman said in a statement. “Again this quarter, our comp store sales growth was primarily driven by customer traffic. We are convinced that we are gaining consumer market share across all of our divisions. Further, our merchandise margin was up strongly.”
Encouraged by its third-quartet results, the company upward adjusted its outlook for the remainder of the fiscal year. TJX now expects reported diluted EPS of $3.39 to $3.41 and adjusted EPS of $3.46 to $3.48, versus prior guidance of $3.39 to $3.43. Full-year comps are also expected to rise 4 percent.
Herrman said the company has several strategies that it is hoping will sustain its momentum throughout the holiday shopping season.
“We will be offering consumers eclectic gift selections from around the world, all at exciting values, and shipping fresh assortments to our stores right through December and beyond,” Herrman said. “We remain laser focused on achieving our goals for 2016 and are passionate about surpassing them. We are on our way to becoming a $40 billion-plus company.”