The off-price apparel and home fashions retailer The TJX Companies Inc. (TJX) posted a 10% increase in comparable-store sales for the five-week period ended in March 31, 2012. Total sales for the month moved up 14% to $2.3 billion from $2.0 billion in March 2011.
March’s comparable-store sales exceeded management’s guidance on the back of strong customer traffic in the stores. The stores welcomed customers with a combination of contemporary and exciting fashion and brands available at lucrative prices.
Retail sales for the nine-weeks ended March 31, 2012, stood at $4.0 billion, which were 13.0% higher than $3.5 billion in the year-ago period. Same-store sales for the period increased 10% over the year-ago period.
Macy’s Inc. (M), a close competitor of TJX, also performed strongly in the month of March. Macy’s total sales grew 6.9% to $2.2 billion for the five-weeks ended March 31, 2012, while its sales climbed 7.3% for the month of March 2012 on a same-store basis.
As of March 31, 2012, The TJX Companies Inc. operated 987 T.J. Maxx, 887 Marshalls, and 377 HomeGoods stores in the United States; 220 Winners, 86 HomeSense, and 12 Marshalls stores in Canada; and 333 T.K. Maxx and 24 HomeSense stores in Europe.
On the back of decent March sales, TJX raised its first quarter 2013 earnings estimate to be in the range of 51 cents to 52 cents compared with the previously-announced range of 45 cents to 47 cents. Fiscal 2013 earnings per share are expected to be in the range of $2.25-$2.35.
The Zacks Consensus Estimate for the first quarter 2013 is currently pegged at 52 cents and the full-year 2013 estimate is $2.36.
Earlier this month, The TJX Companies Inc. announced that its board of directors has approved a 21% hike to its regular quarterly dividend. This is the 16th consecutive year that the company has hiked its quarterly dividend.
TJX will now pay dividend of 11.5 cents per share to its shareholders compared with 9.5 cents paid earlier. The increased dividend will be paid on May 31, 2012, to shareholders of record as of May 10, 2012.
Framingham, Mass-based TJX Companies Inc. operates in the U.S., Canada and Europe. Stiff competition from Kohl’s Corporation (KSS) and Macy’s Inc. coupled with slow recovery of the U.S. economy are matters of concern.
Currently, TJX holds a Zacks #2 Rank, implying a short-term Buy rating. On a long-term basis, we maintain a Neutral recommendation.Read the Full Research Report on TJX
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