TJX Companies reported stronger-than-expected first-quarter results, driven by increased customer traffic and higher spending across all of its business divisions.
“Our terrific first-quarter performance is a testament to the strong execution across the company,” said Ernie Herrman during the company’s earnings call.
The off-price retailer also raised its full-year guidance, saying it remains confident that “the flexibility and resiliency of our business model will continue to be a tremendous advantage.”
Net income for the quarter ended May 2 totaled $1.3 billion, with earnings per share rising 29% to $1.19 from $0.92 in the prior-year period. Analysts had been expecting earnings per share of $1.02.
Net sales increased 9% year over year to $14.32 billion, ahead of analysts’ expectations of $14 billion. Consolidated comparable sales rose 6%, fueled equally by larger basket sizes and higher customer transaction volumes, the company said.
By division, comparable sales increased 9% at HomeGoods, which includes HomeGoods and Homesense stores. Marmaxx — which includes TJ Maxx, Marshalls, Sierra and their e-commerce operations — posted a 6% same-store sales increase. Comparable sales rose 7% at TJX Canada and 4% at TJX International.
Gross profit margin improved to 31.3% from 29.5% a year earlier. TJX attributed the increase to stronger merchandise margins, benefits tied to inventory and fuel hedging contracts, and leverage from higher-than-expected sales volumes.
In the company’s earnings statement, Herrman said sales, pretax profit margin and earnings per share all came in “well above” internal expectations.
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“The second quarter is off to a good start, and we are excited about the initiatives we have planned to keep driving sales and attract consumers to our retail banners,” Herrman said.
“Availability of quality, branded merchandise is outstanding, and we are well-positioned to take advantage of the plentiful buying opportunities we are seeing in the marketplace. We are energized by the opportunities we see to drive sales, continue expanding our global footprint, and capture additional market share around the world for many years to come.”
For the full fiscal year, TJX now expects comparable sales growth of 3% to 4%, up from its prior forecast of 2% to 3%. The company also raised its earnings outlook, projecting earnings per share between $5.08 and $5.15, compared with its earlier guidance range of $4.93 to $5.02.
During the quarter, TJX added 48 net new stores, bringing its total store count to 5,262 locations across 10 countries.
Its portfolio includes TJ Maxx, Marshalls, HomeGoods, Homesense and Sierra in the U.S.; Winners, HomeSense and Marshalls in Canada; TK Maxx and Homesense in Europe; and TK Maxx in Australia.
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