Contrary to last week’s flood of lackluster first-quarter earnings, Americans are spending—they’re just refusing to pay full whack for anything. And off-price sellers like The TJX Companies are reaping the rewards.
Net sales rose 10 percent in the first quarter of fiscal 2017—from $6.87 billion to $7.5 billion—for the Framingham, Massachusetts-based operator of T.J. Maxx, Marshall’s and Home Goods. Comparable stores sales also improved (up 7 percent over last year’s 5 percent), while diluted earnings per share increased 10 percent from $0.69 to $0.76, or $508 million.
“We are particularly pleased with our very strong customer traffic, which drove the comp increases at every division. This tells us that our strategies to bring consumers exciting values on an eclectic and ever-changing mix of the right fashions and brands, sourced from across the globe, are working,” Ernie Herman, chief executive officer and president, said in a statement Tuesday. “We are confident that we are growing our customer base and gaining market share…We see many opportunities in the U.S. and internationally for continued successful growth.”
During the first quarter, the company increased its store count by 47 stores to end April with a total of 3,661 locations.
By segment, net sales at Marmaxx stores (Marshall’s and T.J. Maxx) rose from $4.5 billion to $4.87 billion and comps increased 6 percent, while Home Goods revenue broke a billion ($1.01 billion, to be exact) and comps grew 9 percent. Net sales at TJX Canada were up from $620 million to $686 million, with a 14 percent increase in comps, and TJX International (Europe and Australia) achieved a 4 percent increase in comps and $981 million in revenue, up from the year-ago period’s $870 million.
The company said total inventories at the end of the first quarter were $3.9 billion, compared with $3.5 billion last year, and consolidated inventories on a per-store basis (including distribution centers, but excluding inventory in transit and e-commerce) were up 7 percent.
Thanks to this strong first-quarter performance, TJX has raised its full-year guidance to between $3.35 and $3.42 diluted earnings per share.
Investors’ eyes now turn to Ross Stores, which will reveal its first-quarter performance on Thursday, and Burlington Stores will follow on May 26.