TJX Q2 earnings match expectations as sales miss, shares tread lower

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TJX Companies

TJX Companies Inc (NYSE: TJX) announced its fiscal 2019 second-quarter earnings ahead of the opening bell on Tuesday, August 20. The off-price retail company reported better-than-expected earnings thanks in part to increased customer traffic, which drove comparable store sales higher.

Sales, however, fell short of what analysts on Wall Street had forecast. TJX also provided a lower-than-expected earnings guidance for the current quarter, pushing its shares lower.

Shares of the Framingham, Mass.-based company dropped 3.5% in premarket trading hours. As of 10:02 a.m. ET, the stock was up 2.23% to $1.15 apiece. The stock has gained more than 11% since the beginning of the year.

TJX Earnings & Outlook

TJX had net income $759.0 million, or $0.62 per share in the second quarter, compared with $739.6 million, or $0.58 per share, in the earlier year period. Analysts were also expecting adjusted earnings of $0.62 per share, according to data compiled by Refinitiv.

Companywide revenue stood at $9.78 billion, compared with $9.33 billion in the prior-year period. Wall Street had called for revenue of $9.9 billion, according to Refinitiv.

Comparable-store sales jumped 2%, missing analysts’ estimates of a 3.1% increase.

The company still forecasts earnings of between of $0.63 to $0.65 per share for the third quarter and comparable-store sales growth of 1% to 2%. Analysts guidance is for EPS of $0.68 per share and comparable store sales increase of 2.4% in Q3.

TJX is guiding for earnings of between $2.56 to $2.61 with comparable-store sales increase of 2% to 3% for the full year. Analysts guidance is for EPS of $2.62 per share with comparable-store sales increase of 3.3% for the full year.

TJX CEO Comments

“This quarter marks the 20th straight quarter of customer traffic increases at TJX and Marmaxx. This speaks to the consistency and fundamental strength of our treasure-hunt shopping experience through many types of retail and economic environments. The third quarter is off to a solid start. We feel great about the terrific availability we are seeing in the marketplace for branded, quality merchandise and our ability to capitalize on the opportunities,” Ernie Herrman, CEO of TJX Companies said in prepared remarks.

TJX Inc Profile

TJX is a leading off-price retailer of apparel, home fashions, and other merchandise. It sells a variety of branded goods, opportunistically buying inventory from a network of over 21,000 vendors worldwide.

TJX targets undercutting conventional retailers’ regular prices by 20%-60%, capitalizing on a flexible merchandising network, relatively low-frills stores, and a treasure-hunt shopping experience to drive margins and inventory turnover.

TJX derived 76% of fiscal 2019 revenue from the United States, with 13% from Europe (mostly the United Kingdom and Germany), 10% from Canada, and the remainder from Australia. The company operates over 4,300 stores under the T.J. Maxx, T.K. Maxx, Marshalls, HomeGoods, Winners, Homesense, Winners, and Sierra banners. – Warrior Trading News

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