While retailers up and down the mall and Main Street have complained about tepid foot traffic, off-price giant The TJX Cos. Inc. said customers are still rolling through its doors.
TJX chief executive officer Ernie Herrman boasted that 2016 was “another terrific year” for the company and said it marked its 21st consecutive year of increases in comparable sales.
The off-price giant has been making big market share gains in recent years, attracting consumers with well-known brands, a treasure-huntlike atmosphere and some solid values.
“We were particularly pleased that customer traffic was the primary driver of our comp increases at every major division, which tells us that our eclectic merchandise mix and amazing values continue to resonate with consumers across our geographies,” Herrman said.
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Cowen & Co. noted that TJX’s “impressive execution” and ability to capture “precious” store traffic in 2016 led it to exceed the equity research firm’s fourth-quarter expectations.
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For the full year, profit from all TJX segments hit $4.3 billion, from $4.1 billion, and income for the fourth quarter reached $678 million, a 4 percent bump. The $33 billion in net sales for the year equals a 6 percent rise over 2016.
TJX posted an increase in net sales for the fourth quarter and 2016 as a whole, with full-year sales totaling $33.2 billion.
The retailer’s consolidated comparable store sales also increased 5 percent. All of the positive results were attributed, at least in part, to increased customer traffic.
TJX also laid out its guidance for the fiscal year ending in 2018 and said it expects diluted earnings per share to come in between $3.80 and $3.89, a 10 to 12 percent increase.
That guidance assumes consolidated sales of between $35.2 billion and $35.6 billion, according to TJX chief financial officer Scott Goldenberg, which would be another 6 to 7 percent increase over 2017.
“Looking ahead, we see many opportunities to continue our successful growth and are pursuing many initiatives to keep driving shoppers to our stores,” Herrman added. “We are making strategic investments in our infrastructure, stores and new seeds to strengthen our leadership positions and allow us to capture additional market share in the U.S. and internationally.”
By February 2018, the company also plans to repurchase up to $1.8 billion in stock under an existing stock repurchase program and during the fourth quarter of 2016, the company spent $525 million repurchasing stock, retiring nearly 7 million shares.
During the 2016 fiscal year, the company added 198 stores and increased its total square footage by 4 percent and Herrman said that even more stores are on the way. He also said in a call with analysts that TJX is launching a second “home concept” store this year, but not one that will compete with its popular HomeGoods locations.
“Our approach will be to differentiate these two U.S. home concepts to encourage customers to shop both stores,” Herrman said.
Outside of the new home offering, which is planned to open later this year, TJX is aiming to reach 4,000 stores from its current 3,800 by the end of fiscal 2017, and over the “long term” hit 5,600 stores.
“We have a clear long-term vision for growth and see an exciting future ahead for TJX both in the U.S. and internationally,” Herrman added.