TJX Posts Solid Earnings Beat on Increased Store Traffic

November 17, 2015 by Chris Lange

TJX Companies Inc. (NYSE: TJX) released its fiscal third-quarter earnings report before the markets opened on Tuesday. The company had $0.86 in earnings per share (EPS) on $7.8 billion in revenue, compared to consensus estimates from Thomson Reuters that call for $0.85 in EPS on $7.73 billion in revenue. The same period from the previous year had $0.85 in EPS on $7.37 billion in revenue.

Consolidated comparable store sales increased 5% over last year’s 2% increase. This broke down to comparable sales of 3% for Marmaxx and 6% for HomeGoods. In terms of the international comps, TJX Canada had 10% and TJX Europe had 7% growth.

The movement in foreign currency exchange rates had a three percentage point negative impact on consolidated net sales growth in the third quarter of fiscal 2016 versus the prior year.

During the third quarter, TJX repurchased a total of $459 million of its stock, retiring 6.4 million shares. It continues to expect to repurchase roughly $1.8 billion to $1.9 billion in stock for the remaining fiscal 2016.

In terms of guidance, TJX expects fourth-quarter EPS to be in the range of $0.91 to $0.93, while the consensus estimates call for $0.98 in EPS in the period.

Carol Meyrowitz, chairman and CEO of TJX, commented on earnings:

We are delighted that strong customer traffic drove our entire consolidated comp and was the primary driver of our comp increases at every division. Our excellent traffic gains and strong performance across our apparel, accessories and home categories, demonstrate that our brands globally are offering the right values and merchandise mix. Again this quarter, we saw strong sales at every division. I am particularly pleased with our ability to simultaneously deliver exceptional value to consumers while maintaining strong merchandise margins, which speaks to the flexibility of our off-price business model. Our goal is to keep serving consumers and growing our market share around the world. To that end, we continue to balance growth with investments in our future to establish a strong foundation in the U.S. and internationally. Further, we were happy to add Trade Secret, an Australian off-price retailer, to our family of companies in October.

On the books, the company had cash, equivalents and short-term investments totaling $2.12 billion at the end of the fiscal third quarter, compared to $2.43 billion in the same period from the previous year.

Shares of TJX were up 3.9% at $68.21 Tuesday morning, with a consensus analyst price target of $81.39 and a 52-week trading range of $59.69 to $76.93.

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