A TJX logo appears in this illustration taken August 18, 2025. REUTERS/Dado Ruvic/Illustration

(Reuters) -TJX Cos raised annual sales and profit forecasts on Wednesday, betting that a wide sourcing network and fresh seasonal assortments will attract bargain-hunting customers to its off-price stores.

Shares of the TJ Maxx parent rose about 3% in premarket trading, after it also beat third-quarter estimates.

The Framingham, Massachusetts-based company has capitalized on a seasonal shift from late-summer to fall fashion, boosted by back-to-school demand. The company has also seen steady appetite for discounted merchandise as rising living costs stretch household budgets.

TJX had previously said its expansive sourcing strategy enables it to offset cost pressures stemming from U.S. tariffs by replenishing inventory as needed, helping avoid a direct hit.

"TJX's sourcing model works in its favor right now: department-store softness means more excess merchandise to buy, and TJX can turn those opportunistic finds into margin wins even with ongoing tariff pressure," said Suzy Davidkhanian, an analyst for Emarketer.

The company expects earnings per share for fiscal 2026 to be between $4.63 and $4.66, compared with its previous forecast of $4.52 to $4.57.

It also expects annual comparable sales to increase 4%, versus its previous expectation of a 3% rise.

TJX, which owns brands such as HomeGoods and Marshalls, competes with rivals such as Ross Stores and Burlington Stores for a share in the overcrowded off-price market. The company also faces fierce competition from fast-fashion chains such as Shein and digital marketplace Amazon, which are expanding their discount offerings.

Its net sales stood at $15.12 billion for the quarter ended November 1, beating analysts' estimate of $14.85 billion, according to data compiled by LSEG. Earnings per share of $1.28 were also above expectations of $1.22.

(Reporting by Chandni Shah in Bengaluru; Editing by Shilpi Majumdar)