Should TJX Be Seeing a Bigger Boost From Earnings?

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TJX Companies Inc. (NYSE: TJX) reported its fiscal first-quarter financial results before the markets opened on Tuesday. The retailer said that it had $1.13 in earnings per share (EPS) on $8.69 billion in revenue, compared with consensus estimates of $1.02 in EPS and revenue $8.47 billion. The same period of last year reportedly had EPS of $0.82 and $7.78 billion in revenue.

During the quarter, the company reported a comparable store sales increase of 3%, compared to 1% in the same period of last year. International comparable sales were up 1%.

In terms of its segments, the company reported as follows:

  • Marmaxx net sales increased 8% year over year to $5.38 billion.
  • HomeGoods net sales rose 13% year over year to $1.27 billion.
  • TJX Canada net sales increased 15% year over year to $853.8 million.
  • TJX International net sales increased about 24% year over year to $1.18 billion.

Looking ahead, the company expects to see EPS to be in the range of $1.02 to $1.04 in the fiscal second quarter and $4.75 to $4.83 for the fiscal full year. The consensus estimates call for $1.10 in EPS for the second quarter and $4.85 for the full year.

On the books, TJX cash and cash equivalents totaled $2.68 billion at the end of the quarter, compared with $2.67 billion in the same period of last year.

Ernie Herrman, CEO and president of TJX, commented:

We are very pleased with our first quarter results as both our consolidated comp store sales growth of 3% and earnings per share exceeded our expectations… Customer traffic was once again the primary driver of our comparable store sales increases at each of our four large divisions. Based on our strong first quarter performance, we are updating our outlook for full-year earnings per share. We believe that the consistency of our customer traffic increases demonstrates the strength and resiliency of our business and our ability to succeed through many types of economic and retail environments. Looking ahead, the second quarter is off to a strong start and we see plentiful opportunities to capitalize on the exciting fashions and brands available to us in the marketplace.

Shares of TJX were last seen up about 1.5% at $85.98, with a consensus analyst price target of $91.95 and a 52-week trading range of $66.44 to $87.31.

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