TJX Companies Second Quarter Beats Expectations And Street Estimates

Joyfully TJX Companies
TJX
reported second quarter comparable sales that were well above company’s plans and driven by customer’s traffic. The largest division, Marmaxx, increased comparable sales by 8% with strong sales in apparel and home goods. Earnings per share increased 23% to $0.85 vs $0.69 in last year’s second quarter.

The company emphasized that it was strong customer traffic that drove higher sales. Obviously, shoppers were looking for timely value offering in the stores. Ernie Herrman, CEO and President of TJX, stressed that the pre-tax profit increase of 6% and earnings exceeded company plan with Marmaxx increasing by 8% and HomeGoods increased 4% over the same period last year.

The company again stresses that the company brought to the stores great fashion, great values and great brands which gave customers around the world a great experience in their treasure hunt. Herrman stressed that the company is in an excellent position to ship fresh and exciting merchandise to stores which will capture more market share and drive the profitability of the company.

The company has excellent control. At the end of the quarter, inventories were $6.6 billion compared to $7.1 billion at the end of last year’s second quarter. The company noted that last year’s inventory reflected the early arrival of merchandise and a large in-transit balance as a result of in-transit delays.

Once again, the company noted that the marketplace is loaded with outstanding quality merchandise which suggests that other retailers were cutting back on their orders. TJX says they are in a position to flow exiting merchandise to the stores for the Fall and holiday shopping seasons.

Outlook.

For the third quarter the company plans sales increase of 3% to 4% and pretax margins in the rage of 11,3% to 11.5%. Diluted earnings of $0.95 to $0.98. Last year the company reported $0.86.

For the full year ending February 4, 2024 the company is currently planning fourth quarter comparable sales up 3% to 4% and pretax profits up in the range of 10.7% to 10.9%. Diluted earnings in the range of $1.10 to $1.13. in the fourth quarter the company will have a 14^th week with a benefit of approx. 0.4% improved margin and an increase of $.10 per diluted share for the extra week. Earnings are expected to be in the range $1.00 to $1.03. Last year the company reported $0.89 in the fourth quarter. For the full year the company may report $3.56 to $3.62 compared to $3.11 last year.

At the end of the second quarter the company operated 4,865 stores compared to 4.864 units last year.

POSTSCRIPT: With 1,200 buyers scouring the world, TJX comes up with excellent values that shoppers scoop up. The company expects a strong second half because of its internal controls and the availability of quality, branded merchandise. It is an exciting outlook.