TJX Cos. (TJX.N), which owns the Marshalls and TJ Maxx chains, gave investors a hat-trick of good news, including a boosted dividend, planned stock buybacks and same-store sales that beat during the critical holiday quarter.

The company exceeded expectations on comparable sales, a closely watched measure in retail, which came in at 6 per cent in the fourth quarter, exceeding analysts’ 3.5 per cent estimate, according to Consensus Metrix. It forecast 2 to 3 percent same-store sales growth in the coming year, plus earnings per share about in line with analyst estimates.

Key Insights

Chief Executive Officer Ernie Herrman had said heading into the Christmas period that the off-price chain was focusing on gifting and marketing campaigns. It seems the spending paid off: Rising customer traffic was the “primary driver” behind the sales increases in every division, TJX said Wednesday.

After the better-than-expected end to the fiscal year, the company said it plans to boost its dividend by 18 per cent and repurchase as much as US$2.25 billion of stock this year. The company also plans to invest in the business, with new stores and remodels a priority in this coming year’s budget.

Still, the company is facing the same headwinds as other retailers, including soaring freight costs and rising worker wages that are weighing down margins.

Market Reaction

-Shares rose 2.9 per cent as of 8:47 a.m. in New York.