Strong Traffic Lifts TJX Comps - Analyst Blog


Consolidated same-store sales at The TJX Companies Inc. ( TJX ), an off-price retailer of apparel and home fashions in the U.S. and worldwide, climbed 8.0% year over year in the four-week period ended August 25, 2012. This rate of increase was in line with the year-ago period's growth. As for total sales, it climbed 10.0% for the aforementioned period to $1.9 billion from $1.7 billion in the year-ago period.

As for the 30-week period ended August 25, 2012, comparable sales climbed 8% from the year-ago period. Total sales for the same period went up 10.0% year over year to $12.4 billion.

Sales exceeded management's expectations on the back of higher customer traffic in U.S., Canada and Europe divisions. Marmaxx Group, the company's largest division reported consolidated comparable store sales growth of 9% during the four-week period ended August 25, 2012.

Store Update

As of August 25, 2012, TJX Companies operated 1,010 T.J. Maxx, 900 Marshalls, and 399 HomeGoods stores in the U.S. In Canada it operated 222 Winners, 87 HomeSense, and 13 Marshalls stores. The company operated 339 T.K. Maxx and 24 HomeSense stores in Europe.

As of fiscal year 2012, TJX Companies operated 983 T.J. Maxx, 884 Marshalls, and 374 HomeGoods stores in the U.S. In Canada it operated 216 Winners, 86 HomeSense and 6 Marshall stores. It operated 342 T.K. Maxx and 24 HomeSense stores in Europe.

Future Planning

On the back of the strong sales performance in August 2012, the company raised its fiscal third quarter 2013 earnings guidance to be at the higher end of the previously-announced range of 56 to 59 cents.

TJX Companies has been consistently reporting an increase in comparable store sales for the past several quarters. This reflects its increased customer traffic and demand for the commodities in the company's stores.

We are encouraged by the company's flexible off-price business model that is allowing it to react according to market trends. TJX Companies has a low-cost structure compared to many other traditional retailers. It focuses aggressively on reducing expenses across its segments.

Its close competitor, Kohl's Corporation ( KSS ) reported a 3.4% increase in comparable store sales for the four-week period ended August 25, 2012. Total sales went up 5.3% to $1.5 billion.

Based in Framingham, Massachusetts, TJX Companies owns some popular retail stores like T.J. Maxx, Marshalls, Homegoods, Winners, Homesense and T.K. Maxx. The TJX Companies carries a Zacks #2 Rank (short-term Buy rating).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: KSS , TJX

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