What happened

Shares of off-price retailer The TJX Companies (NYSE:TJX) were trading higher on Thursday. The company reported a wider loss than expected, but said that it's already reopening its stores, and that it expects to bounce back well, later in 2020.

As of 2 p.m. EDT today, TJX's shares were up about 6.6% from Wednesday's closing price.

So what

TJX's results from the quarter that ended on May 2 weren't good. The company lost $887 million in the quarter, or $0.74 per share, as revenue declined 52% from the year-ago period to $4.4 billion. 

It's not a surprise that TJX swung to a loss in the period, given that it closed both its physical stores and its online storefront in mid-March amid the COVID-19 pandemic. But its results were worse than Wall Street had expected: Analysts had forecast a loss of $0.15 per share on revenue of $5.17 billion.

A shopper in a department store.

Image source: Getty Images.

So why was the stock up on Thursday? The view ahead looks brighter. Not only has TXJ already reopened about 1,600 of its roughly 4,500 stores (which include the T.J. Maxx, HomeGoods, Marshalls, and Homesense chains), but at stores that have been reopened for more than a week, sales are tracking higher than at the same time last year, CEO Ernie Herrman said. The company expects to have most of its stores reopened by June. 

Now what

There's more reason for optimism, too. TJX is an off-price retailer, meaning that it purchases much of its inventory from full-price retailers looking to offload surplus or out-of-season merchandise, and resells it at a discount. As consumer-discretionary investors know, full-price apparel retailers have been hit especially hard by the pandemic, as cash-strapped consumers hold off on those particularly discretionary purchases. 

For TJX, that means it should have ample opportunities to scoop up inventory at favorable prices from retailers that are paring down (or in some cases, liquidating entirely) in coming months. It could also mean a sustained boom in sales, if consumers wary of spending for full-price merchandise turn to TJX's off-price chains instead.