TJX raises full-year profit forecast after quarterly sales beat; announces acquisition of stake in R
TJX Cos Inc raised its full-year profit forecast on Tuesday ahead of the holiday shopping season and reported better-than-expected quarterly same-store sales as the off-price retailer’s steep discounts brought in more shoppers.
TJX, which draws in price-conscious shoppers with the promise of sought-after and luxury brands like Dolce & Gabbana and Calvin Klein at discounts of up to 60%, has been steadily expanding with a program of new store openings and remodeling of existing ones. The company now expects full-year profit of $2.61 to $2.63 per share, compared with its prior forecast of $2.56 to $2.61.
“The fourth quarter is off to a solid start and we have many initiatives underway to keep driving traffic and sales to our stores and online during the holiday season and beyond,” Chief Executive Ernie Herrman said in a statement. The company reported a 4% rise in comparable-store sales for the third quarter, beating the average analyst estimate of a 2.30% rise, according to IBES data from Refinitiv. TJX now expects comparable store sales growth of 3% on a consolidated basis, compared with its prior outlook of 2% to 3% growth. Same-store sales at Marmaxx, TJX’s biggest unit that houses T.J. Maxx and Marshalls stores, rose 4%, also beating estimates of a 2.31% rise. TJX’s net income rose to $828.3 million, or 68 cents per share, in the quarter ended Nov. 2, from $762.3 million, or 61 cents per share, a year earlier. Net sales rose to $10.45 billion from $9.83 billion. Analysts on average had expected a profit of 66 cents per share on net sales of $10.32 billion. Shares of the Framingham, Massachusetts-based company rose 1.4% before the opening bell. On Tuesday, TJX also announced that it has acquired a 25% ownership stake in leading Russian off-price apparel and home fashion retailer Familia. The company bought the stake from Familia’s existing shareholders for $225 million, and gains the right to elect one representative to the Russian retailer’s board of directors as part of the deal. Founded in 2000, Familia currently operates more than 275 stores in over 90 Russian cities, offering customers women’s and men’s clothing, footwear, accessories and household goods. A pioneer in Russia’s off-price segment, the company is a fast-growing business with strong potential. “We are pleased to welcome TJX as a new shareholder,” commented Familia CEO Konstantin Nadezhdin in a release. “TJX has always been the standard we have aspired to at Familia, including their focus on value and operating efficiency. We look forward to moving ahead with TJX as we implement our ambitious growth strategy and take Familia to the next level.” Other Familia shareholders include Goldman Sachs and Baring Vostok, as well as the company’s own founders, all of whom will maintain their investments in the retailer following TJX’s acquisition of a stake. Reuters with Robin Driver
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