TJX Companies Inc TJX:NYSE

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TJX Raises Full-Year Guidance as Its First-Quarter Results Beat Expectations

10:05AM ET 5/21/2019 MT Newswires
TJX (TJX) on Tuesday raised its full-year earnings and comparable sales guidance as the discount apparel and home goods retailer posted better-than-expected fiscal first-quarter results.

The Framingham, Mass.-based parent of TJ Maxx and Marshalls said it now expects diluted earnings per share for the year ending Feb. 1 to be between $2.56 and $2.61, up from the adjusted $2.45 the year before. The outlook is based its estimate of 2% to 3% same-store sales growth. In February, the company said it expected EPS of $2.55 to $2.60.

TJX said that in its first quarter ended May 4, it earned $0.57 per diluted share, up one penny from the prior-year period and two cents above the consensus from Capital IQ. Sales rose to $9.28 billion, up from $8.69 billion last year and slightly ahead of the Street's view of $9.21 billion.

"We are in an excellent position to take advantage of the abundant buying opportunities we are seeing in the marketplace for quality, branded merchandise and to keep flowing fresh, exciting assortments to our stores and online," said Chief Executive Ernie Herman. "We have many initiatives under way to keep driving sales and customer traffic, and feel great about our ability to continue to gain market share around the world."

Comparable sales rose 5%, above the Street's 3.65% expectation and 3% in the same quarter in 2018.

"Once again this quarter, customer traffic was the primary driver of our consolidated comp increase and was up at each of our our major divisions," Herman said. "We believe this is a great indicator of the enduring appeal of our great values on an eclectic and exciting mix of merchandise and our treasure-hunt shopping experience, as well as the resiliency of our off-price retail model."

For the second quarter, TJX said it sees diluted earnings per share to be $0.61 to $0.62, above $0.58 last year, on comparable store sales growth of 2% to 3%.

TJX Marmaxx and HomeGoods comparable sales in the US rose 6% and 1%, respectively, in the first quarter. Sales at TJX Canada were flat while TJX International, which includes Europe and Australia, gained 8%.

Consolidated pre-tax profit margin slipped to 10.1% in the quarter, down 0.9 percentage point from the year before. Gross profit margin slid 0.4% percentage point to 28.5%. Selling, general and administrative costs as a percentage of sales rose 0.5 percentage point to 18.3%.

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