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3 Large Retailers Announce Earnings

- By Alberto Abaterusso

These three large retailers announced quarterly results before the opening bell on Tuesday.

Shares of The Home Depot Inc. (HD) jumped 0.26% to $191.45 on Tuesday after beating consensus estimates on GAAP earnings for the first quarter of fiscal 2019 by 7 cents, posting $2.27 per diluted share, or a 9.1% increase from the prior-year quarter.


Revenue increased 5.7% to $26.38 billion, beating expectations by $40 million.

For the first quarter, the Atlanta, Georgia-based home improvement retailer recorded a 2.5% increase in comparable-store sales and a 3% increase in comparable U.S. store sales. Other key sales data were 3.8% year-over-year growth in customer transactions to 390 million, a 2% increase in the average price per ticket to $67.31 and 5.6% growth in sales per square foot to $435.18.

The Home Depot operated a total of 2,289 stores in the first quarter of 2019 versus 2,287 stores in the final quarter of 2018 and compared to 2,285 stores in the first quarter of 2018.

"We were pleased with the underlying performance of the core business despite unfavorable weather in February and significant deflation in lumber prices compared to a year ago," President and CEO Craig Menear said.

For full fiscal 2019, the company reaffirmed 3.3% growth in total sales and 5% growth in comparable-store sales from the prior full fiscal year. Earnings per diluted share are expected to increase 3.1% to $10.03 versus consensus estimates of $10.09.

The Home Depot had a market capitalization of $211.12 billion at close on Tuesday. The stock has risen 3% over the 52 weeks through May 21 to above the 200 and 100-day simple moving average line. The share price is still under the 50-day SMA line. The closing price on Tuesday was 21.1% above the 52-week low of $158.09 and 12.6% from the 52-week high of $215.43.

Shares of The TJX Companies Inc. (TJX) were 0.55% higher at $53.26 at close on Tuesday after the company beat consensus estimates on GAAP earnings for the first quarter of fiscal 2020 by 3 cents. The company posted 57 cents per share, which was nearly 1.8% higher year-over-year.

Revenue was $9.28 billion, up 6.8% and beating consensus estimates by $70 million.

In the U.S., the Marmaxx division's net sales increased 7.8% to $5.8 billion and HomeGoods division's net sales grew 10.1% to nearly $1.4 billion. The TJX International division, which accounts for Europea and Australia's net sales, was also up 3.9% to $1.23 billion. In contrast, the TJX Canada division's net sales were 0.7% lower to $848 million.

The Framingham, Massachusetts-based apparel stores chain company also reported a 200 basis-point increase in comparable store sales to 5% thanks to strength in its Marmaxx and TJX International divisions and an increase in customer traffic.

The store count was up 75 stores to 4,381 at the end of first quarter of fiscal 2020 versus 4,141 at the end of first quarter of fiscal 2019. Also, the gross square feet increased 1.2% to 117.6 million in the first quarter of fiscal 2020 compared to 113.1 million in the same quarter of fiscal 2019.

During the quarter, The TJX Companies returned $589 million to its shareholders, spending 59.4% of it to retire 6.7 million shares. It spend the other 40.6% on dividends.

For the second quarter, The TJX Companies expects a 5-7% increase in earnings to a range of 61 to 62 cents per diluted share versus consensus' estimates of 62 cents, and it estimates 2-3% growth in comparable store sales.

For full fiscal 2020, the company guided for earnings of $2.56 to $2.61 per diluted share, or 5-7% growth from full fiscal 2019, compared to expectations of $2.61. Also, The TJX Companies estimates that comparable store sales will grow 2-3% in full fiscal 2020.

The retailer expects to repurchase between $1.75 billion and $2.25 billion shares of its stock in fiscal 2020. On June 6, it will pay a 23-cent cash quarterly dividend per common share, which is an 18% increase from the prior quarterly dividend, to shareholders of record May 16.

The stock had a market capitalization of $64.7 billion at close on Tuesday. The TJX Companies climbed 21% over the past year to above the 200 and 100-day simple moving average lines. The share price is still below the 50-day SMA line. The closing price on Tuesday was 28.5% above the 52-week low of $41.49 and 6.3% from the 52-week high of $56.64.

Shares of AutoZone Inc. (AZO) soared 5.57% to $1,032.25 on Tuesday after beating consensus estimates on GAAP earnings for the third quarter of fiscal 2019 by 80 cents, posting $15.99 per share. The result was 19.2% higher compared to the prior-year quarter.

At $2.78 billion, revenue was up 4.5% from the prior-year quarter, beating consensus estimates by $10 million.

Other relevant data were a 3.9% increase in U.S. same-store sales versus a 0.6% increase in the prior-year quarter and an increase of 10 basis points in the gross profit margin to 53.6%, due mainly to the sale of two businesses in fiscal 2018.

Net income rose 10.7% to $405.9 million thanks to a lower effective tax rate and rise in inventory per location of 4.6% to $688,000. The company's number of stores was 6,287, which was 195 stores higher than the prior-year quarter or 46 stores higher than the previous quarter.

In the quarter, AutoZone invested $466 million for the repurchase of 472,000 shares of its common stock at an average price of $987 per share. The company is authorised to retire another $1.169 billion of its common stock under a current share repurchase program.

The company had a market capitalization of $25.4 billion at close on Tuesday. AutoZone climbed 66% over the past year to above the 200, 100 and 50-day simple moving average lines. The closing price on Tuesday was 72.9% above the 52-week low of $597 and 4.1% from the 52-week high of $ 1,074.67.

Disclosure: I have no positions in any security mentioned.

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