A TJ Maxx store in North Miami, Fla., on March 19, 2016.Carlo Allegri/Reuters
TJ Maxx parent TJX Cos TJX-N surpassed market expectations for fourth-quarter results on Wednesday as budget-conscious shoppers flocked to the off-price retailer’s stores in search of holiday deals on apparel, cosmetics and gift assortment.
With interest rates still high, discount retailers such as TJX and Ross Stores have tapped bargain-seeking consumer behavior to take market share from department stores like Macy’s and Nordstrom, analysts have said.
“Off-price ... offers a much more compelling product assortment that is more consumer-centric than a department store, especially in Macy’s,” Jane Hali & Associates senior analyst Jessica Ramirez said.
A day earlier, Macy’s delivered a weaker annual forecast as the upscale retailer struggled with softer store traffic.
Overall comparable store sales at TJX rose 5 per cent in the quarter, beating market expectations of 4.15 per cent, with the company saying that was “entirely driven by increased customer transactions”, indicating robust holiday spending.
However, it forecast fiscal 2025 comparable sales growth of 2 per cent to 3 per cent, below expectations for a 3.72 per cent rise. It expects earnings per share of $3.94 to $4.02, compared with estimates of $4.11.
“TJX is being conservative because we are still in a very volatile time where the consumer continues to be pressured. They will be lapping a very strong 2023 as we go forward,” Ramirez said.
Net sales for TJX’s core Marmaxx segment in the U.S. grew 5 per cent in the quarter, driven by demand for cosmetics and skincare products. Its HomeGoods segment rose 7 per cent.
Its quarterly earnings per share of $1.22 came in above estimates of $1.12, aided by lower freight costs and inventory shrink expense.
TJX also announced a share buyback plan of up to $2.5-billion in fiscal 2025 and said it intends to raise its quarterly dividend in April by 13 per cent to 375 cents per share.
Its shares were largely flat in early trading.