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Young Shoppers Helped TJX See a Stellar Quarter

TJX, the parent company of the T.J. Maxx and Marshalls stores, reported second quarter financial results that beat on both the top and bottom line.

The Massachusetts-based company reported a jump of 11.6% in net sales to $9.33 billion. Analysts were waiting for just $9 billion. Net income rose to $739.6 million, or $1.17 per share, compared to $553 million, or 85 cents per share, a year earlier. Analysts had been waiting for $1.05 a share. The quarter also marked the 16th consecutive quarter of growth in customer traffic.

“We have been attracting new customers to all our divisions, a significant share of whom are younger customers. This is great for our business today and for the future,” said TJX Chief Executive Officer Ernie Herrman.

Same-store sales in the second quarter saw an increase of 6 percent, beating the 2.2 percent increase analysts had expected, according to Thomson Reuters. The company also boosted its same store sales growth forecast to 3 percent to 4 percent, beating the average estimate of a 2.4 increase.

“(It is) one of the best business models in retail,” remarked Jefferies analyst Janine Stichter.

TJX also raised its full-year adjusted profit forecast to $4.10 to $4.14 per share from a previous outlook of $4.04 to $4.10 per share.

CEO Herrman said during the earnings call, “I am extremely pleased with our second quarter results. Both our consolidated comp store sales growth of 6% and earnings per share of $1.17 significantly exceeded our expectations. We saw a sharp execution of our off-price fundamentals by many of our teams across the company, and comp store sales growth was strong at all of our divisions. Further, customer traffic was up for the 16th consecutive quarter at TJX and Marmaxx. Clearly, our terrific brands, eclectic merchandise mix and great values continue to resonate with consumers around the world.”

He added, “We were especially pleased with the very robust performance of our apparel business. We’re convinced that we are attracting new customers, driving more frequent visits to our stores and gaining market share. We are particularly pleased to see that we have been attracting new, younger customers at all divisions, which bodes well for the future. With our very strong second quarter results, we are raising our full year outlook, which Scott will detail in a moment. Looking ahead, the third quarter is off to a very strong start, and we have many opportunities and traffic-driving initiatives planned for the back half of the year. We are confident we will achieve our plans, and as always, we’ll strive to surpass them.”

Many analysts were excited with the results with MKM Partners giving the stock a $120 price target with a “buy” rating while Morgan Stanley upped their price target from $99.00 to $119.00 and gave the company an “overweight” rating.

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