TJX's Sales Growth Cuts Through Gloom Overhanging Retail

   (FROM THE WALL STREET JOURNAL 11/18/15) 
   By Tess Stynes

TJX Cos. said profit in its latest quarter came in better than it expected as strong store traffic boosted sales.

Shares of TJX, the parent company of T.J. Maxx, Marshalls and HomeGoods, rose 3.9% to $68.18 on Tuesday.

The retailer's results eased investor concerns that had been building after lackluster reports last week from department-store operators Macy's Inc. and Nordstrom Inc.

TJX buys some of its goods through closeouts and sells them at discounted prices. Off-price retailers like TJX have been faring better than the overall retail industry as many consumers remain cost-conscious.

TJX said sales at established stores rose 5% in the latest quarter, above its expectations for growth of 2% to 3%. Chairman and Chief Executive Carol Meyrowitz said in prepared remarks Tuesday that strong customer traffic drove sales across the company's apparel, accessories and home-goods categories. Customer traffic remains up in the current quarter, she said.

For the period ended Oct. 31, TJX reported a profit of $587.3 million, or 86 cents a share; it had a profit of $595 million, or 85 cents a share, in the year-earlier period, when it had more shares outstanding. The company had projected per-share earnings of 80 cents to 82 cents for the latest period.

Revenue increased 5.3% to $7.75 billion, in line with analysts' estimates.

Gross margin fell to 29% from 29.4%. The company said that as expected its "wage initiative and increased supply chain costs" cut into margins.

For the year ending Jan. 30, TJX adjusted its outlook to reflect its recent acquisition of Trade Secret, an Australian off-price retailer with 35 stores.

TJX now projects per-share earnings of $3.26 to $3.28 on sales growth of 4% to 5%, excluding newly opened and closed locations. The previous projection was per-share profit of $3.24 to $3.28 on sales growth of 3% to 4%.

TJX's forecast for the current quarter, which now includes costs tied to the Trade Secret acquisition, is for per-share earnings of 91 cents to 93 cents. Analysts polled by Thomson Reuters had put per-share profit at 98 cents.

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November 18, 2015 02:47 ET (07:47 GMT)

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