© Reuters. FILE PHOTO: A T.J. Maxx store which is owned by TJX Cos Inc in Pasadena, California U.S., May 15, 2017. REUTERS/Mario Anzuoni/File Photo
(Reuters) -TJX Cos on Wednesday raised its forecast for annual profit and comparable sales for fiscal 2024, buoyed by steady sales for its discount apparel and accessories and an uptick in demand for home decor goods.
Signs of cooling inflation have boosted demand at off-price retailers such as TJX (NYSE:) Cos, which offers brands ranging from Jimmy Choo to Alexander McQueen at discounts between 20% and 60%.
U.S. comparable sales at the company’s apparel and accessories segment Marmaxx rose 8% in the second quarter. TJX was also supported by a rebound in demand at its HomeGoods outlets, which rose by 4% in the reported quarter, after declining in the last five quarters.
“Bed Bath & Beyond (OTC:)’s bankruptcy has also created an opening for TJX’s HomeGoods banner to grab market share, helping rejuvenate it after several lackluster quarters,” said Insider Intelligence analyst Rachel Wolff.
The HomeGoods owner also benefited from higher prices of some products and freight costs easing sharply, as gross profit margins rose 2.6 percentage points from a year earlier to 30.2% in the quarter ended July 29.
Data from Placer.ai shows foot traffic at T.J. Maxx and Marshalls saw a roughly 17% spurt in June and July as “Back-to-School” shoppers hunted for bargains on schools supplies, clothes and backpacks.
Excluding items, the company reported second-quarter profit of 85 cents per share, topping market expectations of 77 cents.
U.S. comparable sales at the company’s apparel and accessories segment Marmaxx rose 8% in the second quarter. TJX was also supported by a rebound in demand at its HomeGoods outlets, which rose by 4% in the reported quarter.
The T.J. Maxx parent now expects annual adjusted profit for fiscal 2024 between $3.56 and $3.62 per share, compared with its previous forecast of between $3.39 and $3.48 per share.
The company expects overall comparable store sales to be up 3% to 4% for fiscal 2024, compared with its previous view of 2% to 3%.
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