Dive Brief:
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TJX Companies, the parent of T.J. Maxx, Marshalls, and Home Goods, Tuesday reported a Q1 revenue increase of 5.8% to $6.86 billion, handily beating expectations of $6.8 billion. The retailer also reported a profit of $474.6 million ($.69 per share) up year over year from $454.3 million ($.64 per share) and past its expectations of $.64 to $.66.
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Same-store sales increased 5%, surpassing the company’s expectations of 2% to 3% growth. Same-store sales rose 3% at T.J. Max and Marshalls stores and 9% at HomeGoods, meeting or exceeding analyst expectations.
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Those same-store numbers were driven by increased customer traffic and conversion and a “strong increase in merchandise margins,” CEO Carol Meyrowitz said in a statement, adding that Q2 continues to be strong and 2015 should sustain the momentum.
Dive Insight:
TJX companies are thriving in a space that is seeing mixed results for other retailers. The brands in general buy factory closeouts and other marked-down merchandise, as do flash-sales and some outlet stores. Yet flash-sales are facing headwinds and even Nordstrom Rack saw an unexpected Q1 slowdown. The stores are generally located in strip malls and other out-of-the-way areas that enjoy cheaper rents than shopping centers or downtowns, giving them an edge over some other off-price stores and retailers in general.
The company also recently announced a bump in its pay for hourly workers, a cost increase that it apparently can afford.