Off-price retailer TJX blew past quarterly comparable-store sales estimates on Tuesday as big discounts attracted more younger shoppers and generated its 16th consecutive quarter of growth in customer traffic.
Unlike Macy’s and J.C. Penney, which have closed stores and shifted their focus online, TJX has thrived through a period of uncertainty for major U.S. retailers driven by the growth of Amazon.com and other web-based players.
The company’s treasure-hunt style marketing technique, based on unpublicized but deep discounts on apparel and accessories, proved to be a hit with younger customers, driving a 34 percent jump in profit and lifting its shares by 6 percent.
“We have been attracting new customers to all our divisions, a significant share of whom are younger customers. This is great for our business today and for the future,” TJX Chief Executive Officer Ernie Herrman said in a statement.
Same-store sales rose 6 percent in the second quarter, easily beating the 2.2 percent increase analysts had expected, according to Thomson Reuters.The company also raised its same store sales growth forecast to 3 percent to 4 percent, above the average estimate of a 2.4 increase.
“(It is) one of the best business models in retail,” Jefferies analyst Janine Stichter said in a client note on Monday.
The company’s net income rose to $739.6 million, or $1.17 per share, in the second quarter ended Aug. 4, from $553 million, or 85 cents per share, a year earlier.
The retailer also raised its full-year adjusted profit forecast to $4.10 to $4.14 per share from a prior outlook of $4.04 to $4.10 per share.
Comparable store sales in the company’s Marmaxx unit, which includes T.J. Maxx and Marshalls stores, rose 7 percent, comfortably beating estimates.
The Framingham, Massachusetts-based company said net sales during the second quarter rose 11.6 percent to $9.33 billion.
Analysts expected the company to report quarterly earnings of $1.05 per share on revenue of $9.00 billion.-based company said net sales rose to $9.33 billion from $8.36 billion.