Over the past week, the leading U.S. department store operators have released a steady stream of dismal first-quarter results. Unseasonal weather patterns and slower growth in U.S. consumer spending weighed on sales throughout the sector.

However, these headwinds didn't bother TJX Companies (TJX 0.57%) whatsoever. Indeed, the off-price retail giant posted another quarter of strong sales growth, beat its earnings guidance (as well as analysts' estimates), and raised its full-year forecast. This shows that TJX continues to capitalize on the upheaval sweeping across the retail industry.

TJX beats expectations again

Back in late February, management projected that TJX's comparable-store sales would rise 2% to 3% in the first quarter, while earnings per share would come in between $0.53 and $0.54, down from $0.56 a year ago. TJX comfortably beat its forecasts for both metrics, though.

Comp sales rose 5% for the quarter. Net sales increased 7% to $9.3 billion, despite a roughly 1 percentage point headwind from currency fluctuations. That beat the average analyst estimate of $9.2 billion. The TJX International segment -- which encompasses stores in Europe and Australia -- achieved the strongest sales trends last quarter, with comp sales up 8%. That compared to a 1% comp in the prior-year period. Domestic T.J. Maxx and Marshalls stores also outperformed, with 6% comp sales growth.

A woman with a shopping cart outside of a Marshalls store.

TJX posted another quarter of stellar sales growth in Q1. Image source: Marshalls.

TJX did experience some margin compression last quarter. Gross margin fell to 28.5% from 28.9% a year earlier, due to surging supply chain and freight expenses. Meanwhile, operating expenses rose 9.8%, exceeding TJX's revenue growth, mainly due to rising wage levels.

In total, TJX's operating margin fell to 10.1% from 11% a year earlier. However, the company was able to offset this margin pressure through a combination of revenue growth, lower net interest expense, and share buybacks. As a result, EPS ticked up by a penny to $0.57, beating the analyst consensus of $0.55.

Cashing in on big market share opportunities

Over the past 12 months, TJX has posted stronger sales growth than it had achieved in many years. To some extent, that reflects strong economic growth last year. However, TJX's market share gains have accelerated, as well.

Toys R Us and regional department store chain Bon-Ton both liquidated their operations around the middle of last year. Sears and Kmart avoided liquidation, but only by shuttering more than half of their stores since last March. Many other retailers that survived have closed some stores over the past year. TJX appears to be doing a good job of capturing sales from these past and present competitors.

If anything, TJX's market share opportunities could grow over the next few years, as more and more struggling retailers run out of time. Since the beginning of 2019, Midwest-focused general merchandise retailer Shopko and national chains Payless ShoeSource, Gymboree, Crazy 8, and Charlotte Russe have announced that they are going out of business. And just this week, Ascena Retail decided to begin winding down its Dressbarn discount chain. That brought the number of store closures announced this year to more than 7,000.

Guidance is already rising

Based on its strong start to the year, TJX bumped up its full-year forecast on Tuesday. The company is now calling for adjusted EPS between $2.56 and $2.61 -- a penny higher than its initial guidance range. History would suggest that is still a very conservative estimate.

For the second quarter specifically, management expects comparable store sales to rise 2% to 3% and EPS to reach $0.61 or $0.62, up from $0.58 a year ago. This outlook indicates that the labor and freight cost headwinds that weighed on earnings last quarter are already starting to ease up.

TJX stock barely reacted to the earnings report on Tuesday. As a result, it trades for less than 21 times the midpoint of the company's full-year EPS guidance range (which is likely conservative). That's not cheap, but it provides plenty of upside for long-term investors if TJX can continue to gain market share at the expense of its reeling competitors.