TJX Cos, the US discount retail giant, has raised its annual profit forecast on Wednesday (November 20) thanks to lower costs and strong market demand. As the holiday shopping season, led by Black Friday, approaches, customers plagued by persistent inflation are flocking to discount stores to grab themselves some fashionable new outfits at discounted prices.
In its third-quarter financial report, TJX easily exceeded Wall Street expectations. According to data from the London Stock Exchange Group (LSEG), TJX’s net sales in the third quarter grew by 6% to $14.1 billion, surpassing analysts’ expectations of $13.95 billion.
As the parent company of fashion discount stores like TJ Maxx (or TK Maxx) and Marshalls, TJX Cos has successfully met customers’ needs for value and discounts, even in a situation where inflation pressures are easing, bringing in stable foot traffic and sales.
According to Reuters, BMO Capital Markets analyst Simeon Siegel said, “TJX has always been conservative in its guidance, but its performance remains consistent.” He added, “As the brand gradually shifts to channels beyond traditional wholesale partners, the company continues to capture market share.”
TJX expects annual earnings per share to reach $4.15 to $4.17, higher than the previous forecast of $4.09 to $4.13. However, the company’s annual comparable store sales growth target remains at 3%. TJX’s stock price has risen by 28% this year.
As Black Friday approaches, retailers like TJX, Walmart, and Amazon are offering holiday deals from toys to home goods to attract frugal consumers.
On the same day, Walmart, known for offering customers the lowest prices, also raised its annual forecast. However, smaller competitor Target indicated that holiday sales could be soft due to nonessential items accounting for a larger proportion of its revenue.
After experiencing rapid growth over the past year, TJX, which also owns chain stores like HomeGoods, is still increasing sales, winning value-seeking consumers from department stores like Macy’s and Kohl’s, and gaining favor among young bargain-loving shoppers.
However, its growth rate is slowing down, except for its TJX International stores in Europe and Australia. The company reported earnings per share of $1.14, a slight increase compared to the average expected $1.09, but lower than the expected $1.18. On Wednesday, TJX opened down by 1.3%.
TJX is seeking to boost sales in foreign markets. Last quarter, the company announced the acquisition of a 35% stake in the Dubai-based Brands for Less retailer for $360 million. This privately owned brand is the primary discount retailer in the region.
On Wednesday, TJX announced plans to launch its TK Maxx brand in Spain by early 2026.
Earlier this year, TJX’s European business faced challenges due to execution issues, but the segment saw a 7% growth in comparable sales this quarter, compared to just 1% last year.