TJX Profit Rises 6.1% on Strong Sales

By Tess Stynes

TJX Cos. said its earnings rose 6.1% as the off-price retailer reported better-than-expected sales growth at established stores for the quarter ended in August and raised its guidance for the year.

Shares rose 4.1% to $74.55 in recent premarket trading.

For the year ending Jan. 30, TJX raised its per-share earnings estimate to $3.24 to $3.28 on growth in sales, excluding newly opened or closed locations, of 3% to 4%. TJX previously expected per-share profit of $3.21 to $3.27 on growth in sales, excluding newly opened or closed locations, of 2% to 3%.

For the current quarter, the company forecast per-share earnings of 80 cents to 82 cents. Analysts polled by Thomson Reuters expected per-share profit of 89 cents.

TJX, the parent company of T.J. Maxx, Marshalls and HomeGoods, buys some of its goods through closeouts and sells them at discounted prices. Off-price retailers like TJX have done better than the overall retail industry lately amid stronger traffic as consumers remain cost-conscious.

During the latest quarter, sales excluding newly opened or closed locations rose 6%, topping the company's expectations for growth of 2% to 3%. On that basis, sales increased a combined 4% at its U.S. T.J. Maxx and Marshalls chains and 9% at HomeGoods. Analysts expected a combined increase of 2.9% for the retailer's U.S. T.J. Maxx and Marshalls chains and 4.8% for HomeGoods, according to FactSet.

Chairman and Chief Executive Carol Meyrowitz said the sales growth at established stores was driven by an increase in customer traffic and that the retailer benefited from strong sales across all its divisions as well as solid merchandise margins. Ms. Meyrowitz also said that the current quarter is off to a solid start.

For the period ended Aug. 1, TJX reported a profit of $549.3 million, or 80 cents a share, up from $517.6 million, or 73 cents a share, a year earlier. The year-earlier period included debt-extinguishment charges of two cents a share. The company expected per-share profit of 72 cents to 74 cents.

Revenue increased 6.5% to $7.36 billion, above expectations of analysts polled by Thomson Reuters for $7.26 billion.

Gross margin rose to 29.1% from 28.6%, mostly on the sales growth while merchandise margins were flat despite negative currency impacts and higher supply-chain costs.

Write to Tess Stynes at tess.stynes@wsj.com

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(END) Dow Jones Newswires

August 18, 2015 09:14 ET (13:14 GMT)

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