TJX, the US-based value retailer, has raised its full-year guidance after a strong second-quarter driven by an increase in customer numbers.
The global fashion and homewares retailer, whose fascias include Marshalls, TJ Maxx, HomeGoods and the UK’s TK Maxx, said net profits rose 2.3% to $562.2m (£431.73) in the 13 weeks to July 30.
Like-for-likes rose 4%. Total sales climbed 7% to $7.89bn as it added 14 new stores in the period, bringing its worldwide store estate total to 3,675.
As a result TJX said it expects diluted full-year earnings per share to be between $3.39 and $3.43, compared with $3.33 last year.
Gaining market share
“We are extremely pleased that our comp store sales growth was almost entirely driven by customer traffic,” said TJX chief executive Ernie Herrman.
“We are convinced that we are gaining consumer market share as our excellent values on a compelling selection of brands and fashions are drawing customers to our retail brands around the world.”
At its US Marmaxx division, which incorporates TJ Maxx and Marshalls, like-for-likes rose 4% and at its HomeGoods division like-for-likes climbed 5%.
In the US, the retailer has appeared to buck the trend of other department store chains that have suffered. Last week, Macy’s revealed plans to close 100 stores, about 15% of its total store estate, as it adapts to the ongoing shift to online.
Benefits of economic uncertainty
Analysts suggested TJX was benefiting from the uncertain economic situation.
“In the current macroeconomic environment, we believe the consumer continues to turn to off-price for her shopping needs attracted to the channel’s value priced, trend-right merchandise,” said Stifel analyst Richard Jaffe.
“Additionally, the company’s improved marketing campaign, growing loyalty program and store remodels are successfully driving comps and traffic in our opinion.”
In TJX’s Canadian business like-for-likes rose 9%.
In its international operations, which includes TK Maxx in the UK, like-for-likes increased 2%. However this was a slide in growth compared with last year’s 5% rise.
The retailer said it remains “confident” it can expand its international store estate to 1,100 shops, up from the current total of 551.
On current trading, the retailer said: “The third quarter is off to a solid start, and we see plentiful opportunities for our business in the second half of the year and beyond.”