Dive Brief:

• TJX Cos., parent company of off-price retailers T.J. Maxx, Marshalls, HomeGoods and Sierra Trading Post, said on Wednesday that Q4 net sales rose 6% to $9.5 billion, down from its 8% increase last year. Q4 consolidated same-store sales rose 3% compared to a 6% increase last year, besting the Consensus Metrix analyst forecast of 2.6% cited by Reuters. 

• TJX posted Q4 net income of $678 million and diluted earnings of $1.03 per share, a 4% increase over the prior year’s 99 cents per share. For the 52-week fiscal year ended January 28, 2017, TJX's net sales rose 7% to $33.2 billion, edging past last year’s 6% increase. Fiscal year consolidated same-store sales rose 5%, same as last year, and fiscal year net income reached $2.3 billion.

• TJX also said Wednesday it will raise its dividend by 20% and repurchase between $1.3 billion and $1.8 billion worth of shares this fiscal year.

Dive Insight:

TJX, a company that has largely staked its sales on brick-and-mortar stores over e-commerce, continued its string of solid performance reports with quarterly results that trumped analyst expectations.

"It is a testament to the strength of TJX that this full fiscal marks the 21st consecutive year of positive same-store sales," GlobalData Retail Managing Director Neil Saunders said in a note emailed to Retail Dive. "There are few in retail that can boast such a long period of sustained performance." 

The 2016 holiday period's results didn't match TJX's fourth quarter prowess last year, but Saunders said that is mostly because last year's results were so strong. "In any case, within the U.S. TJX is still growing well above the market average and is gaining market share in both the apparel and home categories," he noted. 

In his statement Wednesday morning, TJX CEO and President Ernie Herrman employed his characteristic exclamation points as he emphasized that “the year 2016 was another terrific year for TJX on top of many great years!” and credited customer traffic as the primary driver of 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.”

TJX is likely sticking to its physical stores because the company knows its patrons appreciate the company's “treasure hunt” atmosphere — i.e., finding designer gems among racks that feature appealing prices on a range of merchandise from known and unknown brands. Its buyers are also well known for their talent and speed in keeping goods that are on trend and appealingly priced.

“TJX localizes their assortment and it is usually buy-now, wear-now,” according to a Jane Hali & Associates analyst note emailed to Retail Dive. “With off-price resonating with more consumers, we see better shopping experiences offered by the TJX group. They also have been focusing on classifications that are seeing growth, such as activewear and home.”

The shopper journey offered at TJX stores so far has not been replicated online, even with the best search and browse capabilities. The company has even introduced one of its latest acquisitions, catalog and e-commerce retailer Sierra Trading post, to the brick-and-mortar realm by opening 12 stores. "The value proposition of the off-price channel continues to resonate with growth being driven by its store footprint as the sector’s online penetration remains low," Moody's Vice President Christina Boni said in a note emailed to Retail Dive.

TJX's physical store performance is especially notable considering the struggles facing so many rival apparel retailers, according to Saunders. " Given the maturity, especially of the T.J. Maxx and Marshalls concepts, we believe this is an impressive performance," he said of Wednesday's Q$ report. "It also comes against a backdrop where competition in off-price is increasing: both from existing retailers like Macy’s, developing their own discount concepts; and from a rising resale market organized through online auction and marketplace sites."

Furthermore, TJX is well positioned to shrug off pressures from the strong dollar and its boost to wages and will likely continue to gain despite an apparel space fraught with price pressures and fickle consumer demand. 

"Looking ahead, we believe that TJX will continue to grow its share of the market — both in the U.S. and overseas," Saunders wrote. "However, the upcoming quarter is likely to be slightly more pressured in terms of sales growth as the company is lapping a particularly tough comparative. The strong dollar and wage increases may also act as a drag on profitability. That said, these are short term considerations which will easily re-balance as TJX moves through 2017."