A strong performance in home products helped propel TJX Cos. to a second-quarter Wall Street beat, with total sales, comps and earnings all advancing.
A Zacks Investment Research analyst consensus estimate called for earnings per diluted share of $1.18 and revenue of $15.14 billion.
Consolidated comparable sales increased 4%, with Marmaxx, including T.J. Maxx and Marshalls, up 1%, HomeGoods up 7%, TJX Canada up 6% and TJX International up 7%, the company reported.
Net sales were $15.18 billion, up 5% versus the year-earlier period.
TJX increased its full-year diluted earnings per share guidance to $5.31 to $5.36. Excluding an expected 16-cent net benefit from tariff refunds, adjusted diluted earnings per share are expected to range from $5.15 to $5.20. Previously, the company guided for diluted earnings per share of $5.08 to $5.15. The company continues to expect consolidated comps to gain 3% to 4%.
In a conference call, Ernie Herrman, TJX president and CEO, said the performance of TJX’s HomeGoods team had been notable.
“I think they have been succeeding really over the last number of years at creating a level of excitement and impulse treasure hunt shopping across anything from domestics categories, which are really second to none in value that we deliver,” he said. “You could go to our kitchen department with gadgets to kitchen linens to towels, sheets, giftware, gourmet food from Europe to seasonal decor, wall decor. Everything is hitting on all cylinders. We’ve talked about this before.”
Herrman added that HomeGoods is generating steady traffic not only through its treasure-hunt assortment but also through consumable and staple products shoppers replenish regularly. He also noted that home merchandise now accounts for more than 35% of TJX’s overall business and said that collaboration among home merchants across the company has helped strengthen the diversity of its assortment.
John Klinger, TJX senior executive vice president and CFO, said home categories outperformed apparel during the quarter.
Klinger also made the point: “HomeGoods delivered an outstanding 7% comp sales increase, primarily driven by higher average basket, and customer transactions were also up. We are very pleased to see strength at both our HomeGoods and HomeSense banners, and across all region and income demographic bands. Adjusted segment profit margin was 12.4%, up 240 basis points. Our HomeGoods and HomeSense banners offer customers a highly differentiated mix of home fashions from around the world at compelling values. We are the largest off-price home fashion retailer in the U.S. and believe that we are set up very well to continue to capture an even larger share of the market going forward.”
Looking ahead, Herrman said, “The third quarter is off to a strong start, and we are seeing improvement at our Marmaxx division to start the quarter. Availability of branded, quality merchandise continues to be outstanding, and we have many initiatives in place to drive sales and traffic in the upcoming fall and holiday shopping seasons. Further, we are pleased to share that we are planning to accelerate our store openings to 4% starting next year and now believe we can grow our overall global store base to a total of 7,500 stores in our existing retail banners in our current countries over the long term. We remain very confident in the long runway for growth ahead for TJX, and we are excited about the opportunities we see to bring great values to even more consumers around the world.”
