Retailers wondering where their market share went would do well to look to The TJX Cos. Inc.
The off-pricer, which continued to roll on in the second quarter with a double-digit earnings increase, said it is on track to log more than $25 billion in sales this year. The corporate parent of TJ Maxx and Marshalls is gunning to eventually hit $40 billion, which is the equivalent of adding Gap Inc.’s total sales to its current business.
“All of our businesses in the U.S., Canada and Europe are on track and delivering excellent results,” said Carol Meyrowitz, chief executive officer, on a conference call detailing second-quarter results. “Customer traffic was up significantly over increases last year, which we believe speaks to the strength of our brand, fashion and value…. The numbers speak for themselves.”
Net earnings rose 20.9 percent to $421.1 million, or 56 cents a diluted share, from $348.3 million, or 45 cents, a year earlier. Profits beat analysts’ earnings per share expectations by 1 cent. Sales for the three months ended July 28 rose 8.7 percent to $5.95 billion from $5.47 billion on a 7 percent comparable-store sales gain.
TJX boosted its annual profit projection by 1 cent to a range of $2.39 to $2.45. That projection was seen as conservative by analysts and is well ahead of last year’s earnings of $1.93.
“With our broad U.S. and international reach, we believe our demographic audience is the widest in retail,” said Meyrowitz, who highlighted the company’s offensive prowess.
“We are convinced we will continue to attract more U.S. and international customers with our value,” she said. “Our customer traffic is up midteens over the last three years and continues to increase. While we have made significant market share gains, enormous opportunities remain. Our customer reach indicates that our U.S. penetration is still well below [that of] most U.S. department stores.”
Meyrowitz also noted that TJX is scooping up more real estate, attracting younger customers and has a global span.
Marmaxx, the company’s largest division, has 1,896 doors under the TJ Maxx and Marshalls banners and is seen internally as able to add another 500 stores.
“Marmaxx has been very successful in moderate-income markets and in both densely populated urban markets and rural areas,” Meyrowitz said.