TJX Companies, Inc., the off-price giant that owns both retailers, reported second-quarter earnings on Tuesday, and executives pointed to millennial and Gen Z customers as key drivers behind its impressive results.
“As much as our core customers are shopping more frequently, we are gaining younger customers,” said Ernie Herrman, the company’s CEO and president, calling the segment’s contribution to its new-customer base “a super, super plus.” The majority of new shoppers coming into T.J. Maxx and Marshalls during the quarter were between the ages of 18 and 34, added CFO Scott Goldenberg, a trend that the retailer expects will carry it into a strong latter half of the year.
Just how strong? Same-store sales at T.J. Maxx and Marshalls rose 7 percent in the second quarter, eclipsing most competitors that have reported in recent weeks. Dillard’s, for instance, reported comparable sales of 1 percent for the second quarter. At Macy’s, they were up 0.5 percent and at Nordstrom 4 percent.
TJX credited customer traffic for the majority of that growth, and while Herrman declined to go into specifics about what exactly young shoppers are buying from the retailers, he said the stores’ “key categories and departments” were a particular focus for younger cohorts. Elsewhere, he noted that “apparel has been rather healthy over the last quarter,” for both T.J. Maxx and Marshalls, “and if that continues, we expect that to be a nice tailwind.”
The company’s success with young shoppers is particularly notable given its relatively small e-commerce footprint. To lure a generation hooked on Amazon into brick-and-mortar stores, Hermann pointed to the retailers’ flexibility, the consistent freshness of its inventory and the “instant gratification of being able to touch and feel the merchandise and take items home the very same day.”
The company increased its earnings guidance for fiscal 2019 from $4.83 to $4.88 per share, and it now estimates full-year comparable-store sales growth will be between 3 and 4 percent. Its shares were trading up more than 4 percent as of 12:15 p.m. EST on Tuesday.