While the off-price retailer posted a 7 percent increase in net sales to reach $8.3 billion in the three months ended Oct. 29, better than the 5 percent gain recorded a year ago, consolidated same-store sales increased 5 percent—the same growth rate as last year.
Analysts had expected sales at stores open at least one year to rise 3.6%, per Consensus Metrics, but after comps increased at a slower clip in Q2 (4 percent versus 6 percent the year before), it looks like the bulk of the company’s revenue increase in Q3 came from opening new stores.
In fact, TJX added 110 stores to its base in Q3, increasing its square footage by 4 percent over the same period last year. Included among its U.S. openings were 14 T.J. Maxx locations, 14 Marshalls, 30 HomeGoods and two Sierra Trading Post stores.
“Again this quarter, our comp store sales growth was primarily driven by customer traffic,” chief executive officer and president Ernie Herman said in a press release. “We are convinced that we are gaining consumer market share across all of our divisions. Further, our merchandise margin was up strongly. We have numerous initiatives underway to drive customers to our stores this holiday selling season and keep them coming back.”
Net income for the third quarter was $550 million or 83 cents per diluted share, down from $587 million or 86 cents per diluted share in the year-ago period. Despite this, TJX expects full-year diluted earnings per share in the range of $3.39 and $3.41, up from previous guidance of $3.39 to $3.43.
Herman added, “We remain laser focused on achieving our goals for 2016 and are passionate about surpassing them. We are on our way to becoming a $40 billion-plus company.”