While a strong jobs market and trillion-dollar tax cuts have consumers feeling better off and opening their wallets once again, it hasn’t quelled their love of bargain hunting.
Off-price retailer T.J. Maxx’s parent company TJX Cos. Inc. said Tuesday that its stores saw more customers walk through their doors during the second quarter in the form of their traditional consumer base, as well as a spike in Millennial shoppers.
“As much as our core customers are perhaps shopping a little more frequently, we are gaining a younger customer,” Ernie Herrman, chief executive officer and president of TJX Cos. Inc. told analysts in a call to accompany the release of the retailer’s second-quarter earnings.
This increased level of footfall translated into more spending at the checkout, with the Framingham, Mass.-based business reporting that same-store sales — a measure of sales in shops open for at least a year — were up 6 percent, beating analysts’ expectations for a 2.2 percent increase, according to a Thomson Reuters poll. This was its best performance in over two years.
Within that, Marmaxx, its largest division which includes the T.J. Maxx and Marshalls chains, delivered a strong 7 percent comparable store sales increase.
“Our teams delivered sharp execution of our off-price fundamentals across the company, and customers responded to our great brands, fashions and eclectic selections at excellent values,” Herrman added in a statement.
He declined to reveal exactly what Millennials had been buying, only saying that much of their spending was in key categories and departments and that some of the company’s growth areas “certainly lend themselves to continue to appeal to younger customers.”
Overall second-quarter net sales came in at $9.3 billion, up 12 percent from a year earlier, while net income was $740 million and diluted earnings per share were $1.17 a share, compared with 85 cents a share last year.
As a result, TJX Cos. raised its guidance for full-year EPS to be in the range of $4.83 to $4.88, representing a 20 to 21 percent increase over the prior year’s $4.04.
Simeon Siegel, an analyst at Instinet, said: “They are attracting new customers to all divisions with a significant share of whom are younger customers, showing the company’s successful evolution from a utility purchase to a sought-after experience.”
Shares for TJX Cos., which also includes TJX Canada and TJX International, closed up 4.74 percent at $106.46.