(Reuters) - TJX Cos Inc TJX.N reported a 6 percent rise in quarterly comparable-store sales on Tuesday, topping analysts' estimates as big discounts attracted more younger shoppers and generated the off-price retailer's 16th consecutive quarter of customer-traffic growth.
Unlike Macy's Inc M.N and J.C. Penney Co Inc JCP.N, which have closed stores and shifted their focus online, TJX has stuck to brick and mortar retail, thriving in a period of uncertainty for major U.S. retailers driven by the growth of Amazon.com and other web-based players.
The company’s treasure-hunt style marketing technique, based on unpublicized but deep discounts on branded apparel and accessories, proved to be a hit with younger customers, driving a 34 percent jump in profit and lifting its shares by 5 percent to a record high.
“We have been attracting a significant share of millennial and Gen-Z shoppers among our new customers at each of our divisions...which indeed bodes very well for our future,” TJX Chief Executive Officer Ernie Herrman said.
The 6 percent rise in same-store sales in the second quarter, easily beat the 2.2 percent increase analysts had expected, according to Thomson Reuters I/B/E/S. The company also raised its full-year same store sales growth forecast to 3 to 4 percent, above the average estimate of a 2.4 percent increase.
The company’s Marmaxx unit, which includes T.J. Maxx and Marshalls stores, saw a 7 percent increase in same-store sales as it attracted more new customers, the majority of whom were between the ages of 18 and 34.
Herrman declined to say what products younger customers were buying. However, Jessica Ramirez, an analyst with Jane Hali & Associates, said TJX stocking more trendy active wear and beauty products in its stores was attracting more shoppers.
The company’s net income rose to $739.6 million, or $1.17 per share, in the second quarter ended Aug. 4, from $553 million, or 85 cents per share, a year earlier.
The retailer also raised its full-year adjusted profit forecast.
The Framingham, Massachusetts-based company said net sales during the quarter rose 11.6 percent to $9.33 billion.
Analysts expected the company to report earnings of $1.05 per share on revenue of $9.00 billion.
“...the retail game is still being played firmly in TJX’s ballpark,” Neil Saunders, Managing Director of GlobalData Retail said in an email.
“People simply enjoy the thrill of snagging a bargain.”
Reporting by Uday Sampath in Bengaluru; Editing by Arun Koyyur and Shailesh Kuber
Our Standards: The Thomson Reuters Trust Principles.