TJX Cos forecast annual sales and profit below Wall Street estimates on Wednesday, signalling strained discretionary spending among budget-conscious consumers hit by economic uncertainty.
Its shares rose about 2 percent in early trading after it also reported holiday-quarter results that beat expectations.
The TJ Maxx and Marshalls parent faces mounting concerns over declining nice-to-have purchases as living costs rise. Margin pressures are also intensifying, with economic challenges weighing on its primarily lower-income shopper core customer base, leading to smaller basket sizes and softer demand.
Meanwhile, businesses are expected not to lower prices despite the US Supreme Court striking down President Donald Trump’s emergency tariffs, casting a pall on consumer spending.
The company also faces fierce competition from rivals such as Ross Stores, Burlington Stores, Amazon.com and fast-fashion chains like Shein, all of which are expanding their discount offerings.
TJX forecast a rise in annual comparable sales between 2 percent and 3 percent, compared to analysts’ average estimate of 3.5 percent growth. Earnings per share are expected to be between $4.93 and $5.02, compared to an estimate of $5.18 per share, according to data compiled by LSEG.
Analysts view the muted forecasts as conservative. Simeon Siegel, senior managing director at Guggenheim Securities, said TJX was historically known to issue guidance below expectations. David Wagner, head of equity and portfolio manager at Aptus Capital Advisors, said the market had grown accustomed to the company’s conservative forecasts.
The off-price retailer reported a quarterly comparable sales rise of 5 percent, above an estimate of 3.6 percent growth, boosted by the holiday season.
Adjusted earnings per share for the fourth quarter came in at $1.43, surpassing an expectation of $1.39 per share.
TJX also announced an additional share repurchase plan of up to $3 billion.
By Neil J. Kanatt; Editor: Pooja Desai
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