TJX’s off-price retailing strategies are continuing to pay off, as the company posted strong net sales and earnings in the second quarter, with HomeGoods leading the way.
In the second quarter ended July 30, The TJX Cos. recorded net income or $562.2 million, or 84 cents per diluted share, versus $549.3 million, or 80 cents per diluted share, in the year-earlier period. An analyst average estimate from Zacks Investment Research called for earnings per diluted share of 80 cents.
Overall comparable store sales advanced by 4%, TJX noted. By division, comps at Marmaxx, including T.J. Maxx and Marshalls, gained 4%, while those at HomeGoods gained 5%, those at TJX Canada gained 9% and those at TJX International, including Europe and Australia, gained 2%.
Net sales were $7.88 billion versus $7.36 billion in the quarter a year before.
Ernie Herrman, TJX president and CEO, said, “It was terrific to see our strong customer traffic and comps continue in the second quarter. Our consolidated comparable store sales increase of 4%, over 6% growth last year, and our earnings per share increase of 5% both exceeded our expectations. We are extremely pleased that our comp store sales growth was almost entirely driven by customer traffic. 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. We also are very pleased that our apparel, including accessories, and home businesses both performed well. We saw a strong merchandise margin increase. We believe our robust sales, customer traffic and merchandise margins all speak to the strength of our off-price retail model. With our above-plan second quarter results, we are raising our guidance for full year comp sales to increase 3% to 4% and earnings per share to be in the range of $3.39 to $3.43. 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. We remain laser focused on achieving our goals for 2016 and are passionate about surpassing them. We continue on the road to becoming a $40 billion-plus company.”
During the second quarter, TJX increased its store count by 14 to a total of 3,675 locations, the company reported. Of the 14, four of the new locations were HomeGoods.