Nov 17, 2022
TJX lifts sales forecast on demand for discounted apparel
Nov 17, 2022
TJX Cos Inc raised annual same-store sales forecast and beat quarterly profit estimates on Wednesday, as cash-strapped consumers turn to the discount store for affordable clothing and home decor items ahead of the crucial holiday season.
Lower-income consumers, hit by decades-high inflation, have shown a preference for shopping at stores such as TJX that offer branded products at cheaper prices.
Analysts have said that TJX is well-positioned to capture more consumer traffic than other retailers due to its value-positioning, especially with people refreshing their wardrobes as they return to work and attend social events.
Retailer Target Corp, which forecast gloomy holiday-quarter sales on Wednesday as consumers cut back spending on discretionary items, said it expects to offer steeper holiday discounts to clear excess inventory.
Off-price retailers including TJX, which offers a compelling assortment of goods at reasonable prices compared to other brands and companies, will definitely benefit as consumers trade down, said Jessica Ramírez, analyst at Jane Hali and Associates.
Separately, TJX named John Klinger as its new finance chief effective Jan. 29. Klinger succeeds Scott Goldenberg who has been the company's finance head since 2012.
TJX third-quarter gross profit margin fell 0.4 percentage point to 29.1% from a year earlier, as it battles higher freight and labor costs due to lingering supply chain disruptions, the Russia-Ukraine war and surging inflation.
The HomeGoods stores owner expects 2023 same-store sales to decrease 1% to 2%, compared to its earlier forecast of a 2% to 3% drop.
It now sees full-year adjusted profit per share between $3.07 and $3.11, compared with its prior outlook of $3.05 to $3.13.
Excluding items, TJX earned 86 cents per share in the third quarter, topping analysts' estimates of 80 cents, but sales missed estimates.
Shares of the Framingham, Massachusetts-based company were up about 1%.
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