TJX 2Q Results Beat, Lifts 2013 Profit Forecast

The parent company of T.J. Maxx and Marshalls clothing stores saw net income rise 14 percent during the second quarter, with savvy shoppers continuing to flock to its stores for discounts on designer goods and other wares.

TJX Cos. beat Wall Street expectations, and the company boosted its profit outlook for the year.

Shares jumped more than 6 percent in afternoon trading, and hovered near its 52-week high.

TJX is one of the few retailers to post strong quarterly results this earnings season. Wal-Mart Stores Inc. and Macy’s Inc. fell short of expectations and lowered their forecasts last week. J.C. Penney reported another huge quarterly loss Tuesday.

TJX earned $479.6 million, or 66 cents per share, in the most recent period. That’s up from $421.1 million, or 56 cents per share, in the same quarter last year.

Analysts expected earnings of 63 cents per share, according to a FactSet survey.

Revenue rose 8 percent, to $6.44 billion from $5.95 billion, above Wall Street’s estimate of $6.37 billion. The company experienced better traffic in the period, and shoppers spent more per transaction.

Revenue at stores open at least a year climbed 4 percent, with the strongest increases in its European stores and its HomeGoods chain. This metric is a key indicator of a retailer’s health, because it excludes results from stores recently opened or closed.

One other retailer posting earnings Tuesday was Home Depot, which topped most expectations. An emerging trend suggests that Americans are starting to spend money again as the recession fades in the distance, but they appear to be less willing to spend as freely as they did in the past on clothing and other items, instead holding out for sales and hitting up discount stores and outlets.

For the year, which runs through January, TJX now expects a profit of $2.74 to $2.80 per share. Previously, the Framingham, Mass., company predicted earnings between $2.70 and $2.78 per share. Analysts forecast earnings of $2.82 per share.

For the current quarter, TJX expects earnings of 69 to 72 cents per share, bracketing Wall Street’s 71 cent view.

CEO Carol Meyrowitz said during a conference call that the company remains confident that it will be able to grow its earnings and revenue going forward, in part because there are still many consumers not shopping at its stores regularly. Meyrowitz said that TJX research shows that 75 percent of U.S. consumers haven’t shopped at a T.J. Maxx or Marshalls store in the past year.

“Clearly, we have untapped opportunity, and we are convinced our value proposition will continue to attract more U.S. and international customers,” she said.

Another area of opportunity is online sales. Many shoppers continue to increasingly buy their clothes and home items on the internet, which is already a source of sales growth for many retailers. While TJX does not currently sell its goods online, Meyrowitz said that the company is on track with plans to launch a control-version of its T.J. Maxx website in the late fall.

The retailer runs 1,052 T.J. Maxx, 914 Marshalls and 430 HomeGoods stores in the U.S. It also operates hundreds of stores in Canada and Europe.