TJX Cos. said second-quarter earnings rose 7.9% as the retailer benefited from higher sales and increased customer traffic.
The results outpaced expectations, leading the company to raise its outlook for the full year. The off-price seller of brand-name apparel and home furnishings now expects per-share earnings between $3.10 and $3.18, up from its prior forecast of $3.05 to $3.17.
For the current quarter, the company forecast earnings between 81 cents and 85 cents, compared with analysts' forecast for per-share earnings of 85 cents.
The parent of T.J. Maxx, HomeGoods and Marshalls has continued to appeal to budget-conscious consumers during a sluggish economic recovery. For the latest period, the company reported sales growth across regions, with the strongest gains coming from Europe. Rival retailer Ross Stores Inc. is set to report the financial results for its latest fiscal quarter on Thursday.
"Our customer traffic gained momentum throughout the quarter, and was positive in July," TJX Chief Executive Carol Meyrowitz said. "Further, we are pleased with our solid merchandise margins as well as the improved performance of our apparel businesses."
For the period ended Aug. 2, TJX reported a profit of $517.6 million, or 73 cents a share, up from $479.6 million, or 66 cents a share, a year earlier. Excluding special items, earnings were 75 cents a share. The company had expected per-share earnings of 70 cents to 74 cents.
Net sales increased 7.4% to $6.92 billion, slightly above analysts' forecast for $6.88 billion. Same-store sales rose 3%, in line with the company's expectations for 2% to 3% growth. Gross profit margin declined to 28.6% from 28.8%, because of mark-to-market adjustments on hedging instruments and the impact of e-commerce on merchandise margins.