While most retailers – both high end and mass market – are struggling, off-price retail chain operator TJX reported better-than-expected quarterly sales and raised its full-year profit forecast as price-conscious shoppers flocked to its stores for discounted clothes and accessories.
Shares of the company, which owns off-price chains T.J. Maxx and Marshalls, rose 4.2 percent to $78.38 in premarket trading on Tuesday. TJX raised its profit forecast for the year ending January 2017 to $3.35-$3.42 per share from $3.29-$3.38.
Off-price retailers, along with popular fast-fashion chains such as Inditex's Zara and H&M, have lured shoppers away from department stores and other mall-based retailers by offering chic and trendy clothes for a steal.
TJX, for instance, sells home furnishings and apparel brands such as Dolce & Gabbana or Juicy Couture priced about 20 to 60 percent lower than at most retailers. "We are particularly pleased with our very strong customer traffic, which drove the comp increases at every division," Chief Executive Ernie Herrman said in a statement.
Sales at U.S. T.J. Maxx and Marshalls stores open for at least two straight fiscal years rose 6 percent in the first quarter, smashing the 3.50 percent increase analysts polled by research firm Consensus Metrix had expected.
TJX's net income rose 7.1 percent to $508.3 million, or 76 cents per share, in the first quarter. Net sales rose 9.9 percent to $7.54 billion.