TJX lifts sales forecast on demand for discounted apparel, home goods By Reuters

(Reuters) – TJX (NYSE:) Cos Inc raised annual same-store sales forecast and beat quarterly profit estimates on Wednesday, as value-oriented consumers turn to the discount store for affordable clothing and home decor items ahead of the crucial holiday season.

Lower-income consumers have shown a preference for shopping at stores that offer products at cheaper prices as the United States stares at a recession while prices of food and everyday essentials soar.

Analysts have said that TJX is well-positioned to capture more consumer traffic than other retailers due to its value-positioning and as people opt for cheaper alternatives to branded goods.

Consumers have been refreshing their wardrobes as they return to work and attend social events, boosting comparable sales at TJX’s Marmaxx by 3%.

The company’s third-quarter gross profit margin, however, fell 0.4 percentage point to 29.1% from a year earlier, as it battles higher freight and labor costs due to lingering supply chain disruptions, the Russia-Ukraine war and surging inflation.

The discount store operator expects 2023 same-store sales to decrease 1% to 2%, compared to its prior forecast of a 2% to 3% drop.

The HomeGoods stores owner now sees full-year adjusted profit per share between $3.07 and $3.11, compared to prior forecast of $3.05 to $3.13.

Analysts on average expect 2023 profit of $3.10 per share, according to IBES data from Refinitiv.

Excluding items, TJX earned 86 cents per share in the third quarter, topping analysts’ average estimate of 80 cents.

Shares of the Framingham, Massachusetts-based TJX were up marginally in premarket trading.