TJ Maxx and Marshalls parent TJX Companies Inc. continues to prove the strength of off-price retail.
The department store corporation posted third-quarter earnings that helped send its shares up more than 2% to $60.89 in Tuesday morning trading.
For the period ended Nov. 2, it logged earnings of 68 cents a share — compared with estimates of 66 cents a share — on profits of $828 million. Revenues climbed 6% to $10.45 billion, versus forecasts of $10.32 billion, and same-store sales were up 4% over last year’s 7% gain.
“We are especially pleased that Marmaxx, HomeGoods and TJX Canada each delivered a sequential increase in their comp store sales growth, and TJX International maintained its strong momentum driven by excellent performance in Europe,” said president and CEO Ernie Herrman. “Further, customer traffic was the primary driver of the comp store sales increases at each of these four major divisions.”
The Framingham, Mass.-based firm subsequently raised its full-year earnings per share guidance to a range of $2.61 to $2.63 — a 7% to 8% increase over the previous year’s $2.43 and up from the previous outlook of $2.56 to $2.61.
“Looking ahead, the fourth quarter is off to a solid start, and we have many initiatives underway to keep driving traffic and sales to our stores and online during the holiday season and beyond,” Herrman added. “We are convinced our holiday marketing campaigns will position us as a top shopping destination for exciting gifts at amazing prices. We are seeing fantastic, widespread availability of quality, branded merchandise and are in a great position to capitalize on these opportunities.”
Over the past few years, low-price and discount retailers have consistently bucked industry-wide trends amid retail turbulence spurred by digital disruption, among other factors. Experts believe a significant factor in the success and agility of off-pricers like TJ Maxx and Marshalls has been their ability to offer both cheap prices and a treasure hunt experience that engages shoppers with key brand-name finds.
In late September, Marshalls made a play for e-commerce through the debut of Marshalls.com, which previously served as little more than a store locator. It marked the chain’s attempt to capture market share in the flourishing online channel at a time when off-price retailers continue to eclipse their department store counterparts.
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