Shoppers at TJ Maxx store in New York.

Scott Millin | cnbc

Consumers facing cash crunch may be pulling back on discretionary purchases TargetBut they are spending big on well known brands and home goods at low prices TJX Company

The discounter raised its full-year outlook on Wednesday after reporting a 7.7% year-over-year sales increase and a 23% rise in profit. It cited high customer traffic and the unexpected volume of premium merchandise it acquired from high-end retailers. take off their bloated stock,

Here’s how TJX Company performed during its fiscal second quarter compared to Wall Street’s expectations, based on a survey of analysts by Refinitiv:

  • Earnings per share: 85 cents versus the 77 cents expected
  • Revenue: $12.76 billion versus $12.45 billion expected

The company’s net income for the three-month period ended July 29 was $989 million, or 85 cents per share, compared with $810 million, or 69 cents per share, a year earlier.

Sales rose 7.7% to $12.76 billion from $11.84 billion a year earlier.

Shares of TJX Company climbed more than 4% on Wednesday to hit a new 52-week high.

The TJX Company, which runs TJ Maxx, Marshalls, HomeGoods, Sierra and Homesense in the US, raised its full-year outlook for comparable store sales, pretax profit margin and earnings per share after a strong quarter.

The company now expects comparable store sales to grow 3% to 4%. It anticipates pre-tax profit margin in the range of 10.7% to 10.8% and earnings per share between $3.66 and $3.72. According to Refinitiv, analysts were expecting earnings of $3.59 per share.

Neil Saunders, managing director and retail analyst at GlobalData, said TJX may have had a strong quarter, but the figures paled in comparison to last year when sales were down 1.9% and comparable store sales were up nearly 5%. There was a decline. Still, the retailer is managing to win market share.

As inflation-weary and debt-ridden consumers pull back on high-ticket And use their precious dollars on discretionary goods and services, they’re still looking for deals and spending money on accessories, clothing and home goods at TJX’s many off-price stores. The retailer said traffic growth across all of the company’s divisions led to a strong quarter.

The TJX Company has been able to offer a wide range of premium merchandise because it employs many suppliers, who are full-price, high-end retailers. puffed goods And offloading more stock than usual.

“We’ve had a very strong start to the third quarter and we continue to see tremendous off-price buying opportunities in the market,” Ernie Herrmann, CEO of TJX Companies, said in a news release. “Going forward, we see excellent opportunities to increase sales and customer traffic, gain market share and increase our company’s profitability.”

The home furnishings sector has been under pressure recently as consumers spend money to upgrade living spaces. covid pandemic And then diverted their spending towards experiences and services. Still, TJX’s HomeGoods posted 4% comparable sales growth as consumers are still seeking home decor, pillows and other furnishings.

Meanwhile, Target reported fiscal second-quarter earnings on Wednesday and continues to see growth reduction in expenditure on discretionary items such as clothing and home decor. It slashed its full-year forecast, saying consumers still face pressure from higher inflation in food, beverages and household essentials.


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