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Here's How TJX Companies (TJX) Looks Ahead of Q2 Earnings

Zacks Equity Research
·3 min read

The TJX Companies, Inc. TJX is likely to post a decline in the top and bottom line when it reports second-quarter fiscal 2021 numbers on Aug 19. The Zacks Consensus Estimate for second-quarter loss has widened by a cent in the past seven days to 10 cents per share. This suggests deterioration from earnings of 62 cents registered in the year-ago quarter. We note that this leading off-price retailer has a trailing four-quarter negative earnings surprise of 70.3%, on average.

The consensus estimate for quarterly revenues is pegged at $6.75 billion, which suggests a decline of 31% from the prior-year quarter’s tally.

Factors to Note

Due to the coronavirus outbreak, TJX Companies had temporarily closed stores in several regions like the United States, Canada and Europe among others. While the company is reopening stores in a phased manner as coronavirus-induced restrictions are being lifted, the temporary closure of several stores at some point in the fiscal second quarter are likely to have dented performance. In its last earnings call, management stated that it expects increased inventory write-downs during the to-be-reported quarter. Apart from these, adverse impacts of unfavorable foreign currency movements cannot be ignored.

Nevertheless, the company is undertaking several initiatives to strengthen its e-commerce business. In this regard, its four online websites in the United States and the U.K that were earlier shutdown due to the pandemic remained operational during the fiscal second quarter. Further, management is undertaking actions to curb operating expenses and other costs related to distribution center, home office, ongoing variable and discretionary costs amid the crisis.

The TJX Companies, Inc. Price and EPS Surprise

The TJX Companies, Inc. Price and EPS Surprise
The TJX Companies, Inc. Price and EPS Surprise

The TJX Companies, Inc. price-eps-surprise | The TJX Companies, Inc. Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for TJX Companies this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

TJX Companies carries a Zacks Rank #3 and an Earnings ESP of +69.23%.

Other Stocks With a Favorable Combination

Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Dollar General DG has an Earnings ESP of +6.84% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

DICK’S Sporting Goods DKS has an Earnings ESP of +33.80% and a Zacks Rank #3.

Lowe’s Companies LOW has an Earnings ESP of +7.58% and a Zacks Rank #3.

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