TJX TJX Companies Inc

By Suzanne Kapner and Allison Prang 

Retailers extended their run of good news on Tuesday with Kohl's Corp. and the parent of T.J. Maxx reporting strong quarterly results.

Kohl's sales excluding newly opened or closed locations rose 3.1% in the three months to Aug. 4. Same-store sales would have increased 4.3% for the period excluding the effects of a promotion that shifted into the first quarter this year from the second quarter last year.

Net sales rose 3.9% to $4.31 billion. Net income rose 40% to $292 million, compared with $208 million a year ago.

TJX Cos. posted a 6% increase in same-store sales. Sales grew across all categories, including a 7% increase in its division that includes the T.J. Maxx and Marshalls chains. Chief Executive Ernie Herrman said foot traffic was up for the 16th consecutive quarter. He said the company was attracting new, younger customers and gaining market share, and noted that the current quarter was "off to a strong start."

Net sales increased 11.6% to $9.3 billion. Net income rose nearly 34% to $740 million, compared with $553 million a year ago

Both companies increased their guidance for the current fiscal year.

Kohl's results weren't good enough to please investors, who had already pushed the stock up 45% this year. The shares fell more than 3% in morning trading to $76.22. TJX shares jumped more than 4% to $106.

"I'm confident the strategies we have in place will position us for long-term growth," Kohl's Chief Executive Michelle Gass told analysts on a conference call.

Ms. Gass said the results were driven by a recovery in apparel, particularly women's clothing. She also noted that Kohl's private brands had their best performance in over five years.

Americans are spending more on everything from jeans to handbags to home furnishings as rising wages and lower unemployment boost disposable income.

The spending spree is helping retailers recover after several difficult years. Last week, Walmart Inc. said its quarterly sales rose at the fastest pace in more than a decade. Other retailers, including Nordstrom Inc. and Home Depot Inc., also reported strong results.

Kohl's has taken steps to compete in a world increasingly dominated by online retailers. Last year, it joined with Amazon.com Inc. to allow shoppers to return items they bought from the online retailer at a limited number of Kohl's stores. The pilot has since been expanded to 100 stores.

In September, Kohl's is launching a brand designed in partnership with Popsugar, a media and technology company. Ms. Gass said Popsugar will use data from its millennial customers to help inform the designs.

Next year, Kohl's will introduce the Nine West shoe, handbag and apparel brands to its stores.

Kohl's now expects earnings per share for the fiscal year to be $4.96 to $5.36, up from a previous range of $4.86 to $5.31. The figures include a loss from the extinguishment of debt.

Like other retailers, Kohl's year-over-year comparisons are skewed by an extra week in fiscal 2017, the result of dividing the retail calendar in 52 weeks of seven days each, which leaves an extra day each year.

TJX now forecasts fiscal earnings per share of $4.83 to $4.88, up from its previous guidance of $4.75 to $4.83.

Write to Suzanne Kapner at Suzanne.Kapner@wsj.com and Allison Prang at allison.prang@wsj.com

(END) Dow Jones Newswires

August 21, 2018 12:50 ET (16:50 GMT)

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