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UPDATE 2-TJX beats estimates on HomeGoods strength, shares rise

(Adds background, forecast, analyst comment; Updates shares)

Nov 18 (Reuters) - Discount store operator TJX Cos Inc beat estimates for quarterly results on Wednesday, boosted by strong demand for home improvement products at its HomeGoods chain as well as activewear and beauty products during the COVID-19 pandemic.

TJX’s shares, up about 37% this year, rose 4% in premarket trading.

The chain, which also operates Marmaxx stores, has benefited from its diversified product offerings, as people largely staying at home invest in renovating and furnishing their homes even as they spend less on suits and dresses.

U.S. same-store sales at its reopened HomeGoods stores rose 15% in the third quarter ended Oct. 31, cushioning the declines in its other units.

TJX, known for its treasure-hunt shopping experience, now plans to roll out an online HomeGoods store next year, as many analysts have indicated that off-price chains are missing out on the e-commerce boom due to a near-absence of online operations.

TJX’s overall third-quarter net sales fell about 3% to $10.12 billion, but they were above the Refinitiv IBES estimate of $9.36 billion.

Net income rose about 5% to $866.7 million, or 71 cents per share. Analysts had expected a profit of 40 cents.

The chain also said same-store sales at its reopened stores in the first two weeks of the holiday quarter were down 7%, with about 470 stores - most of them in Europe — temporarily closed due to government mandates.

“TJX’s comparable sales trajectory is likely to be a bumpy road ... Q3 is confirmation that the TJX model is continuing to win share, has opportunity on gross margin, and should continue to outperform the market,” Bernstein analyst Jamie Merriman said.

Same-store sales declined 5% at its reopened stores in the reported quarter.

TJX also said it expects to reinstate a quarterly dividend of 26 cents per share in the fourth quarter, representing a 13% increase from the amount it paid in March. (Reporting by Praveen Paramasivam in Bengaluru; Editing by Maju Samuel)

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