TJX posts bigger quarterly profit
Big labels - small prices: TK Maxx offers a huge range of brands with up to 60% off recommended retail prices.
The company sells apparel and home design brands at lower prices by buying merchandise that department stores return to vendors. It was one of the big winners during the recession as shoppers traded down from more upscale chains.
TJX, based in Framingham, Massachusetts, reported net income of $348 million or 90 cents per share for the second quarter. Analysts, on average, were expecting earnings of 89 cents a share, according to Thomson Reuters I/B/E/S.
The company also expects to earn $3.89-$3.97 a share for the full year on an adjusted basis. Analysts were expecting earnings of $3.95 a share.
TJX's off-price model typically helps draw more customers in tough times, and sales rose 8 percent to $5.5 billion during the quarter.
U.S. consumers have faced high unemployment, stagnant wages and the protracted debate over raising the U.S. government debt ceiling, culminating in the lowest consumer sentiment in more than three decades in August.
The Thomson Reuters/University of Michigan's preliminary August reading on the overall index on consumer sentiment came in at 54.9, the lowest since May 1980.
Comparable sales rose 5 percent at its U.S.-based T.J. Maxx and Marshalls chains. In Europe, where the company runs the T.K. Maxx chain, comparable sales were flat, an improvement over last year's drop of 4 percent.
TJX shares were trading down 1 percent at $53.23 on Tuesday morning on the New York Stock Exchange. They have gained around 36 percent since August last year.
(Reporting by Nivedita Bhattacharjee and Phil Wahba; Editing by Saumyadeb Chakrabarty, Viraj Nair)
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