The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Framingham, UNITED STATES — TJX, the parent company of discount chains TJ Maxx and Marshalls, is sustaining its upward trajectory as shoppers gravitate to the retailer's discount model.
Comparable sales at the company rose 6 percent, three times higher than analysts’ estimates. That sent the stock up as much as 5.5 percent on Tuesday, the most in almost six months.
“We have been attracting new customers to all our divisions, a significant share of whom are younger customers,” chief executive Ernie Herrman said in a statement.
TJX has avoided much of the pain experienced by its competitors, and hasn’t posted a drop in comparable-store sales since 2009. Consumers have embraced the company’s treasure-hunt experience and liquidation prices, despite a broader shift toward e-commerce and away from physical stores. Its store count reached 4,194 last quarter, which ended Aug. 4.
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Shares of the company, based Framingham, Mass., had already risen 33 percent this year before Tuesday and have been trading at all-time highs. TJX now joins Nordstrom as one of the second quarter's retail winners. With the U.S. economy growing and unemployment low, investors are keying in to see which retailers are taking advantage of the favourable environment.
The company raised its full-year guidance. It now expects adjusted earnings per share to be in the range of $4.10 to $4.14, up from the $4.04 to $4.10 a share range it had been predicting in May.
Neil Saunders, managing director of GlobalData, said there is evidence that consumers are staying loyal to TJX-owned retailers even as their incomes rise.
“Our data show no erosion of shoppers migrating elsewhere as their economic circumstances improve,” Saunders said in an email. “Indeed, if anything, the boost to consumer incomes over the first half of the year has encouraged existing shoppers to visit more often and spend more per visit, especially on apparel.”
By Hema Parmar; editor: Anne Riley Moffat, Jonathan Roeder
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