Off-price retailer TJX Cos, the owner of TJ Maxx and Marshalls, reported stronger than expected quarterly sales and profit as its value offerings continued to lure discount hungry shoppers.
The company that offers branded clothing at discount prices reported said that sales growth cooled less than feared. Same-store sales, a key industry metric, slowed to 3 per cent in the fourth quarter, compared with 6 per cent in the year ago period, but topped projections for 2.6 per cent growth.
Net sales in the quarter increased 6 per cent to $9.5bn just ahead of Wall Street expectations.
The Massachusetts-based company reported a 1.7 per cent increase in net income to $667.9m on analysts’ expectations of $656.8m. Earnings per share rose to $1.03, up from 99 cents in the year ago period and ahead of analysts’ estimates.
Earnings had been held back by wage increases and the strength of the dollar, although foot traffic and sales has remained strong as discount retailers have remained in favour with consumers.
“We were particularly pleased that customer traffic was the primary driver of our comp increases at every major division, which tells us that our eclectic merchandise mix and amazing values continue to resonate with consumers across our geographies,” said Ernie Herrman, chief executive and president. “Our fourth quarter and full year results give us great confidence that we are growing our customer base around the world and gaining market share across all our divisions!”
In its fiscal 2018 outlook, the company said it expected diluted earnings per share to growth 10-12 per cent over its 2017 fiscal year’s $3.46. Continued wage growth and currency exchanges are expected to negatively impact growth, but is expected to be outweighed by comparable store sales growth of 1-2 per cent.
The company also announced plans to increase its dividend by 20 per cent and buy back up to $1.8bn of stock. Shares in the company, which are up 1.8 per cent year to date, were 0.3 per cent higher at $76.47 by mid-morning in New York.