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The TJX Companies (TJX) Ups Profit View on Q1 Earnings Beat
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The TJX Companies, Inc. (TJX - Free Report) posted first-quarter fiscal 2024 results, wherein the top and bottom lines increased year over year and the latter beat the Zacks Consensus Estimate. The TJX Companies continues to benefit from its off-price business model, brand strength and robust geographical reach.
During the quarter, the company witnessed a rise in comparable store sales (or comp store sales) due to improved customer traffic and strength in Marmaxx, which is TJX’s largest division. Driven by its better-than-planned profit performance, management raised its pretax profit margin and earnings per share (EPS) guidance for fiscal 2024 while keeping its comp store sales guidance unchanged.
Quarter in Detail
TJX Companies’ EPS came in at 76 cents, which soared roughly 55% from the year-ago period’s earnings of 49 cents. The quarterly earnings increased 12% from the year-ago period’s adjusted EPS of 68 cents. The bottom line cruised past the Zacks Consensus Estimate of 71 cents.
The TJX Companies, Inc. Price, Consensus and EPS Surprise
Net sales came in at $11,783 million, up nearly 3% from the $11,406 million reported in the year-ago quarter. However, the metric fell short of the Zacks Consensus Estimate of $11,823 million. Foreign currency movements had a 1.3-percentage-point negative effect on net sales growth.
In the Marmaxx (U.S.) division, the company’s net sales came in at $7,366 million, up 7% year over year, driven by strength in the apparel and accessories categories. Net sales amounted to $1,966 million, down 3% year over year, in the HomeGoods (U.S.) division.
TJX Canada’s net sales came in at $1,038 million, down 4% from the figure reported in the year-ago period. TJX International’s (Europe & Australia) net sales were $1,413 million, nearly flat year over year.
Comp store sales grew 5% at Marmaxx (U.S.) while declining 7% at HomeGoods (U.S.). Comp store sales increased 1% and 4%, respectively, at TJX Canada and TJX International (Europe & Australia). On an overall basis, the company’s comp store sales jumped 3% due to higher customer traffic.
The pretax profit margin came in at 10.3%, up from the 7.5% reported in the year-ago quarter. The company’s first-quarter fiscal 2024 pretax profit margin increased 0.9 percentage points from the adjusted pretax profit margin of 9.4% recorded in the year-ago period. The better-than-expected pretax profit margin was a result of gains from freight and the timing of some expenses.
The gross profit margin was 28.9%, up by one percentage point. The company witnessed an increase in the merchandise margin due to reduced freight costs and solid mark on from improved buying. SG&A costs as a percent of sales came in at 19%, up 0.6 percentage points year over year.
Other Updates
TJX Companies ended the quarter with cash of $5,025 million, long-term debt of $2,860 million and shareholders’ equity of $6,422 million. The company generated operating cash flow of $745 million in the first quarter of fiscal 2024.
During the quarter, management returned $841 million to shareholders. TJX repurchased $500 million in stock, retiring 6.5 million shares. The company paid out $341 million in shareholder dividends. Management plans to repurchase shares worth $2-$2.5 billion in the fiscal year ending Feb 3, 2024.
As of Apr 29, 2023, total inventories were $6.4 billion. Management is optimistic about its capabilities to offer impressive branded merchandise at its stores and online during the spring and summer seasons.
Guidance
For fiscal 2024, TJX Companies continues to expect an overall comparable store sales increase of 2-3%.
Management expects a fiscal 2024 adjusted pretax profit margin of 10.2-10.4% compared with the earlier view of 10-10.2%. The reported pretax profit margin is expected at 10.3-10.5% now compared with 10.1-10.3% expected earlier.
For fiscal 2024, management now envisions the adjusted EPS in the range of $3.39-$3.48 and a reported EPS of $3.49 to $3.58. Earlier, it expected the adjusted EPS in the band of $3.29-$3.41 and the reported EPS in the range of $3.39-$3.51.
For the second quarter of fiscal 2024, management anticipates a pretax profit margin in the range of 9.3-9.5% and an EPS between 72 and 75 cents. For the quarter, the company is projecting overall comparable store sales growth of 2-3%.
Shares of this Zacks Rank #2 (Buy) company have rallied 30% in the past year compared with the industry’s growth of 6.6%.
Some More Picks
Here we have highlighted three other top-ranked stocks.
The Zacks Consensus Estimate for Kroger’s current financial-year EPS suggests an increase of 6.6% from the year-ago reported figure. Kroger has a trailing four-quarter negative earnings surprise of 9.8%, on average.
Hibbett (HIBB - Free Report) currently carries a Zacks Rank #2. This athletic-inspired fashion product company has an expected EPS growth rate of 12.4% for three to five years.
The Zacks Consensus Estimate for Hibbett’s current financial-year EPS suggests a dip of 0.1% from the year-ago reported figure. HIBB has a trailing four-quarter negative earnings surprise of 13.9%, on average.
Fastenal (FAST - Free Report) engages in the wholesale distribution of industrial and construction supplies. FAST currently carries a Zacks Rank #2 and has an expected EPS growth rate of 9% for three to five years.
The Zacks Consensus Estimate for Fastenal’s current financial-year EPS suggests growth of 4.8% from the year-ago reported figure. Fastenal has a trailing four-quarter earnings surprise of 3.2%, on average.
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The TJX Companies (TJX) Ups Profit View on Q1 Earnings Beat
The TJX Companies, Inc. (TJX - Free Report) posted first-quarter fiscal 2024 results, wherein the top and bottom lines increased year over year and the latter beat the Zacks Consensus Estimate. The TJX Companies continues to benefit from its off-price business model, brand strength and robust geographical reach.
During the quarter, the company witnessed a rise in comparable store sales (or comp store sales) due to improved customer traffic and strength in Marmaxx, which is TJX’s largest division. Driven by its better-than-planned profit performance, management raised its pretax profit margin and earnings per share (EPS) guidance for fiscal 2024 while keeping its comp store sales guidance unchanged.
Quarter in Detail
TJX Companies’ EPS came in at 76 cents, which soared roughly 55% from the year-ago period’s earnings of 49 cents. The quarterly earnings increased 12% from the year-ago period’s adjusted EPS of 68 cents. The bottom line cruised past the Zacks Consensus Estimate of 71 cents.
The TJX Companies, Inc. Price, Consensus and EPS Surprise
The TJX Companies, Inc. price-consensus-eps-surprise-chart | The TJX Companies, Inc. Quote
Net sales came in at $11,783 million, up nearly 3% from the $11,406 million reported in the year-ago quarter. However, the metric fell short of the Zacks Consensus Estimate of $11,823 million. Foreign currency movements had a 1.3-percentage-point negative effect on net sales growth.
In the Marmaxx (U.S.) division, the company’s net sales came in at $7,366 million, up 7% year over year, driven by strength in the apparel and accessories categories. Net sales amounted to $1,966 million, down 3% year over year, in the HomeGoods (U.S.) division.
TJX Canada’s net sales came in at $1,038 million, down 4% from the figure reported in the year-ago period. TJX International’s (Europe & Australia) net sales were $1,413 million, nearly flat year over year.
Comp store sales grew 5% at Marmaxx (U.S.) while declining 7% at HomeGoods (U.S.). Comp store sales increased 1% and 4%, respectively, at TJX Canada and TJX International (Europe & Australia). On an overall basis, the company’s comp store sales jumped 3% due to higher customer traffic.
The pretax profit margin came in at 10.3%, up from the 7.5% reported in the year-ago quarter. The company’s first-quarter fiscal 2024 pretax profit margin increased 0.9 percentage points from the adjusted pretax profit margin of 9.4% recorded in the year-ago period. The better-than-expected pretax profit margin was a result of gains from freight and the timing of some expenses.
The gross profit margin was 28.9%, up by one percentage point. The company witnessed an increase in the merchandise margin due to reduced freight costs and solid mark on from improved buying. SG&A costs as a percent of sales came in at 19%, up 0.6 percentage points year over year.
Other Updates
TJX Companies ended the quarter with cash of $5,025 million, long-term debt of $2,860 million and shareholders’ equity of $6,422 million. The company generated operating cash flow of $745 million in the first quarter of fiscal 2024.
During the quarter, management returned $841 million to shareholders. TJX repurchased $500 million in stock, retiring 6.5 million shares. The company paid out $341 million in shareholder dividends. Management plans to repurchase shares worth $2-$2.5 billion in the fiscal year ending Feb 3, 2024.
As of Apr 29, 2023, total inventories were $6.4 billion. Management is optimistic about its capabilities to offer impressive branded merchandise at its stores and online during the spring and summer seasons.
Guidance
For fiscal 2024, TJX Companies continues to expect an overall comparable store sales increase of 2-3%.
Management expects a fiscal 2024 adjusted pretax profit margin of 10.2-10.4% compared with the earlier view of 10-10.2%. The reported pretax profit margin is expected at 10.3-10.5% now compared with 10.1-10.3% expected earlier.
For fiscal 2024, management now envisions the adjusted EPS in the range of $3.39-$3.48 and a reported EPS of $3.49 to $3.58. Earlier, it expected the adjusted EPS in the band of $3.29-$3.41 and the reported EPS in the range of $3.39-$3.51.
For the second quarter of fiscal 2024, management anticipates a pretax profit margin in the range of 9.3-9.5% and an EPS between 72 and 75 cents. For the quarter, the company is projecting overall comparable store sales growth of 2-3%.
Shares of this Zacks Rank #2 (Buy) company have rallied 30% in the past year compared with the industry’s growth of 6.6%.
Some More Picks
Here we have highlighted three other top-ranked stocks.
Kroger (KR - Free Report) , a renowned grocery retailer, currently carries a Zacks Rank #2. KR has an EPS growth rate of 6% for three to five years. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Kroger’s current financial-year EPS suggests an increase of 6.6% from the year-ago reported figure. Kroger has a trailing four-quarter negative earnings surprise of 9.8%, on average.
Hibbett (HIBB - Free Report) currently carries a Zacks Rank #2. This athletic-inspired fashion product company has an expected EPS growth rate of 12.4% for three to five years.
The Zacks Consensus Estimate for Hibbett’s current financial-year EPS suggests a dip of 0.1% from the year-ago reported figure. HIBB has a trailing four-quarter negative earnings surprise of 13.9%, on average.
Fastenal (FAST - Free Report) engages in the wholesale distribution of industrial and construction supplies. FAST currently carries a Zacks Rank #2 and has an expected EPS growth rate of 9% for three to five years.
The Zacks Consensus Estimate for Fastenal’s current financial-year EPS suggests growth of 4.8% from the year-ago reported figure. Fastenal has a trailing four-quarter earnings surprise of 3.2%, on average.