TJ Maxx and Marshalls’ Winning Streak Continues as Discount Stores Outpace Broader Retail

Shares for The TJX Companies Inc. are surging in premarket trading after the company posted fourth-quarter earnings and sales that bested Wall Street’s forecasts.

As of 9:00 a.m. ET on Wednesday, the firm — parent to off-price retailers TJ Maxx and Marshalls — saw its stock rise more than 7% to $64.00.

During Q4, it logged adjusted earnings per share of 81 cents, versus expectations of 77 cents, on profits of $985 million for the period ended Feb. 1. Revenues also improved 10% to $12.2 billion, compared with predictions of $11.83 billion, and same-store sales climbed 6%.

All of TJX’s retailers, including discount home furnishing store HomeGoods, posted same-store sales increases: Marmaxx (Marshalls and TJ Maxx combined) jumped 6%, while HomeGoods advanced 5%. Abroad, TJX Canada recorded a 4% gain in comps, and TJX International (spanning Europe and Australia) spiked 10%.

“We are extremely pleased with our strong fourth-quarter results, as both sales and earnings per share significantly exceeded our expectations,” President and CEO Ernie Herrman said in a statement. “Looking ahead to 2020, the year is off to a solid start, and our global organization remains focused on bringing great values to shoppers every day. We see plentiful opportunities for TJX in today’s retail landscape and are confident we will continue to capture market share.”

For the full year, TJX anticipates earnings per share in the range of $2.77 to $2.83 — a 4% to 6% increase over the prior year’s $2.67. The firm’s outlook is based on estimated same-store sales growth of 2% to 3% on a consolidated basis as well as at Marmaxx.

The Framingham, Mass.-based company’s results continued to demonstrate the strength of off-pricers. Over the past few years, 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 chains 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.

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