May 20 (Reuters) – TJX raised its annual comparable sales and profit forecasts on Wednesday, banking on resilient demand at its off-price retail stores as budget-conscious consumers increasingly shop for deals amid economic uncertainties.
Shares of the company rose 6% in early trading after it also raised its share buyback target to a range of $2.75 billion to $3.0 billion, from $2.50 billion to $2.75 billion earlier.
Lower-income consumers are increasingly shifting toward discount retailers like TJX, as economic uncertainty stemming from factors such as U.S. import tariffs, the Iran war, and job cuts linked to the AI boom forces them to tighten budgets.
While TJX benefits from the trend, the discount retailer joined other companies in flagging an impact on its profits from elevated fuel costs over the past few months due to the U.S.-Israeli war on Iran.
Meanwhile, the off-price retailer has been ramping up marketing to attract more customers, particularly toward new launches, and has capitalized on strong spring and summer fashion demand.
“The outsized HomeGoods performance also suggests consumers are still willing to spend on items they may not have planned to buy if the value feels right and the assortment creates that element of surprise and discovery,” Emarketer analyst Suzy Davidkhanian said.
Framingham, Massachusetts-based TJX’s overall comparable store sales rose 6%, compared with a 3% rise a year ago.
Its quarterly gross margin rose to 31.3% from 29.5%, supported by favorable inventory and fuel hedges.
The TJ Maxx parent now expects comparable store sales to grow between 3% and 4% in fiscal 2027, up from its prior forecast of 2% to 3% growth.
It also sees annual earnings per share between $5.08 and $5.15, up from its previous forecast of $4.93 to $5.02.
The off-price retailer posted first-quarter revenue of $14.32 billion, compared with analysts’ estimates of $14 billion, according to data compiled by LSEG.
Its quarterly earnings of $1.19 per share beat estimates of $1.02 per share.
(Reporting by Sanskriti Shekhar in Bengaluru; Editing by Leroy Leo)
