Home rebounds at TJX Cos. – and is expected to keep on rolling

FRAMINGHAM, Mass. – The home business at TJX Cos. nameplates pivoted back into growth mode across all its U.S. nameplates.

HomeGoods’ comp rose 4%, bouncing back from a 7% decline in Q1 and compared with a 13% decline in the year-ago quarter. The lift was driven by a significant increase in traffic. Total HomeGoods sales climbed 8% to $2.0 billion for the quarter ended July 29.

“We thought there would be incremental improvement. Clearly, it even exceeded our expectations,” company CEO and President Ernie Herrman told investors during a call Wednesday.

At Marmaxx, the division encompassing TJMaxx and Marshalls, home comped up in the high single-digit range. Apparel comped up in the same range. Total division comp rose 8% vs a 2% decline in the year-ago quarter. Total sales at Marmaxx increased 9% to $7.9 billion.

At both HomeGoods and Marmaxx, traffic and comps accelerated month-over-month through the quarter.

Overall company comp rose 6% during the quarter, well above the company’s plan, and was entirely driven by traffic.

Given the momentum, TJX Cos. today raised its guidance for the full year on the top and bottom lines. The company now plans overall comp to rise 3% to 4%, with average ticket down slightly and an increase in units sold.

TJX Cos. is increasing its expectations for pretax profit margin to a range of 10.7% to 10.8% and diluted earnings per share to be in the range of $3.66 to $3.72.

The company’s full-year guidance includes an expected pretax profit margin benefit of approximately 0.1 percentage point and a diluted earnings per share benefit of approximately $.10 due to the 53rd week in the company’s fiscal calendar. Excluding those expected benefits, TJX Cos. now expects the full-year adjusted pretax profit margin to be in the range of 10.6% to 10.7% and adjusted diluted earnings per share to be in the range of $3.56 to $3.62.

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