U.S. markets closed
  • S&P 500

    3,585.62
    -54.85 (-1.51%)
     
  • Dow 30

    28,725.51
    -500.10 (-1.71%)
     
  • Nasdaq

    10,575.62
    -161.89 (-1.51%)
     
  • Russell 2000

    1,664.72
    -10.21 (-0.61%)
     
  • Crude Oil

    79.74
    -1.49 (-1.83%)
     
  • Gold

    1,668.30
    -0.30 (-0.02%)
     
  • Silver

    19.01
    +0.30 (+1.62%)
     
  • EUR/USD

    0.9801
    -0.0018 (-0.19%)
     
  • 10-Yr Bond

    3.8040
    +0.0570 (+1.52%)
     
  • GBP/USD

    1.1166
    +0.0043 (+0.38%)
     
  • USD/JPY

    144.7200
    +0.2770 (+0.19%)
     
  • BTC-USD

    19,262.87
    -50.25 (-0.26%)
     
  • CMC Crypto 200

    443.49
    +0.06 (+0.01%)
     
  • FTSE 100

    6,893.81
    +12.22 (+0.18%)
     
  • Nikkei 225

    25,937.21
    -484.84 (-1.83%)
     

TJX Companies (TJX) Tops Q4 Earnings, Revenue Estimates

The TJX Companies, Inc. TJX reported fourth-quarter fiscal 2017 results, wherein its net sales, comparable store sales (comps) as well as earnings exceeded expectations.

In the reported quarter, earnings of $1.03 per share surpassed the Zacks Consensus Estimate of $1.00. Further, earnings exceeded management’s guidance of 96–98 cents per share. Currency affected earnings negatively by 4 cents.

TJX Companies, Inc. (The) Price, Consensus and EPS Surprise

TJX Companies, Inc. (The) Price, Consensus and EPS Surprise | TJX Companies, Inc. (The) Quote

The bottom line grew 4% year over year, driven by higher consumer traffic and solid comps growth. Shares gained in the 6.7% in the pre-market trading.

Quarterly Details

Net sales increased 6% year over year to $9.5 billion, supported by higher comps. Additionally, the figure marginally beat the Zacks Consensus Estimate of $9.47 billion.

Consolidated comps for the fourth quarter increased 3%, over last year’s 6% increase, backed by higher comps at Marmaxx, HomeGoods and TJX Canada. Comps also exceeded management’s guidance of 1–2% growth. However, comps were flat in the International segment.

While TJX Canada comps grew 4% in the reported quarter, HomeGoods, Marmaxx and International comps increased 5%, 3% and 2%, respectively.

TJX Companies' adjusted pre-tax profit margin contracted 0.3 percentage points (pp) year over year to 11.6% of sales. Gross margin contracted 0.4 pp year over year to 28.3%. The downside can primarily be attributed to the company’s inventory hedges as well as incremental supply chain costs.

Fiscal Results

Fiscal 2017 earnings of $3.53 per share surpassed the Zacks Consensus Estimate of $3.50 by 4.6%. The bottom line grew 6% year over year, backed by higher consumer traffic and solid comps growth.

Net sales increased 7% year over year to $33.2 billion, supported by higher comps. Further, the figure marginally beat the Zacks Consensus Estimate of $33.18 billion.

Other Financial Updates

Cash and cash equivalents were $2.92 billion as of Jan 28, 2017 compared to $2.38 billion as of Oct 29, 2016, while long-term debt was $2.22 billion at the end of the fourth quarter, almost on par with previous quarter.

Moreover, in the reported quarter, the leading off-price retailer paid $2.4 billion to shareholders in fiscal 2017 through share repurchases and dividends.

Q1 Guidance

TJX Companies also issued guidance for first-quarter fiscal 2017. The company expects earnings in the range of 76–78 cents per share compared with 76 cents reported a year ago. Wage increases are anticipated to negatively impact earnings growth by 3%. Moreover, currency headwinds are likely to hurt earnings by 6%.

For the fourth quarter, the company expects comps growth of 0–1% over last year’s strong 7% increase.

Fiscal 2018 Guidance

For fiscal 2018, TJX Companies now projects adjusted earnings per share in the range of $3.80–$3.89, up 5–7% from fiscal 2017 results. Comps are also expected to grow 4%, which is on the higher end of the previous guidance of 1–2% growth.

Zacks Rank

TJX Companies carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the retail sector are Zumiez, Inc. ZUMZ, Dollar Tree Inc. DLTR and Genesco Inc. GCO. All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

While Zumiez has an expected long-term earnings growth of 15.0%, Genesco and Dollar Tree has an expected earnings growth of 9.5% and 16.7%, respectively, for the next three to five years.

Zacks' Top Investment Ideas for Long-Term Profit

How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Zumiez Inc. (ZUMZ): Free Stock Analysis Report
 
Genesco Inc. (GCO): Free Stock Analysis Report
 
Dollar Tree, Inc. (DLTR): Free Stock Analysis Report
 
TJX Companies, Inc. (The) (TJX): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research