TJX has pulled off its 16th consecutive quarter of growing customer traffic to its stores — this time powered by deep discounts that brought younger shoppers to its doorstep.
Unlike many of its peers in physical retail, TJX has weathered the last several uncertain years rather steadily, with consistently growing foot traffic from its loyal and enthused fanbase.
TJX — which offers something of a treasure hunt experience for shoppers looking for designer quality goods at big box prices — has turned out to be a model that has been hard for digital players, like Amazon, to imitate or supplant via eCommerce channels. Younger customers are particularly responsive to the TJX model of non-advertised deep discounts, and in Q2 they drove a 34 percent jump in profit and a 6 percent bump in shares just after the results were announced.
“We have been attracting new customers to all our divisions, a significant share of whom are younger customers. This is great for our business today and for the future,” TJX CEO Ernie Herrman said.
Same-store sales were up 6 percent in the second quarter, crushing the 2.2 percent increase analysts had expected. The company also raised its same store sales growth forecast to between 3 percent and 4 percent — above the 2.4 percent estimate.
“(It is) one of the best business models in retail,” Jefferies Group analyst Janine Stichter said in a client note on Monday.
Net income rose to $739.6 million, or $1.17 per share, from $553 million, or 85 cents per share, this time last year. TJX also raised its full-year adjusted profit forecast to between $4.10 and $4.14 per share from a prior outlook of $4.04 to $4.10 per share.
Comparable store sales in the company’s Marmaxx unit, which includes TJMaxx and Marshalls, rose 7 percent, comfortably beating estimates.