After showing some modest deceleration in the previous quarter, The TJX Companies Inc.’s second-quarter results today offered evidence that the discount channel continues to be a bright spot for tepid retail.
The owner of TJ Maxx, Marshalls and Home Goods said today that its Q2 net sales increased 6 percent year-over-year to $8.4 billion, besting market watchers’ forecasts for sales of $8.3 billion.
Amid sluggish brick-and-mortar sales across much of retail, the discount sellers also pulled off a consolidated-comp store sales gain of 3 percent.
CEO, president and director Ernie Herrman told investors during a conference call today that he’s so bullish about the brick-and-mortar space for the company that he plans to open approximately 260 stores “this year alone.”
“Once again, customer traffic was the primary driver of our consolidated-comp increase,” Herrman said. “We believe our second-quarter performance demonstrates, once again, the strength, consistency and flexibility of our off-price business model. We continue to deliver healthy sales and comp increases in a shifting retail landscape — with the volatility [of] traditional retail and growth of online [in] general.”
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Herrman added that the company was “particularly pleased” with the performance of its apparel and home categories.
Net income slid 1.6 percent to $553 million, or 85 cents per diluted share — but topped analysts’ expectations for diluted earnings per share of 84 cents.
On the heels of the second-quarter momentum, the company improved its full-year outlook. TJX now estimates fiscal 2018 reported EPS to be in the range of $3.89 to $3.93 and adjusted EPS to be in the range of $3.78 to $3.82.
“Looking ahead, we have many growth initiatives planned for the back half of the year,” Herrman said. “The marketplace is loaded with quality branded merchandise across apparel and non-apparel categories.”