TJ Maxx-owner raises annual forecast amid strong customer traffic

Investing.com -- The TJX Companies (NYSE: TJX) raised its annual adjusted profit per share forecast and unveiled better-than-anticipated second-quarter earnings, as the discount department store corporation was boosted by rising traffic from inflation-hit consumers hunting for bargains.

The TJ Maxx parent improved its outlook for full-year adjusted diluted earnings per share to between $3.56 and $3.62, up from its prior guidance of $3.39 to $3.48. Bloomberg consensus estimates had seen the forecast at $3.58.

Chief executive officer Ernie Herrman noted that the business is in an "outstanding position" as it heads into the fall and holiday selling season, highlighted by "excellent opportunities" to drive customer traffic and capture more market share.

"The third quarter is off to a very strong start and we are seeing tremendous off-price buying opportunities in the marketplace," Herrman said.

Shares in the company climbed in premarket U.S. trading on Wednesday.

Demand at TJX Cos retailers, which offer deep price reductions on brands like Alexander McQueen and Jimmy Choo, recovered during the three months ended on July 29.

Comparable store sales grew by 6%, topping expectations of 2.93%, thanks to strength at its HomeGoods label and international demand. Customer traffic increased at every division, Herrman noted.

Meanwhile, a reduction in freight costs helped gross profit margin tick up by 2.6 percentage points to 30.2%, earnings per share of $0.85 also rose from $0.69 year-on-year.

You May Also Be Interested In

• Gordon Haskett cuts TJX Companies rating to Accumulate
• S&P 500 may pull back before midterms, but Citi says buy the dip
• Premarket movers: Crypto stocks rally, Ross Stores jump on upbeat forecast