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TJX Posts Strong Comps in May

Zacks Equity Research

Consolidated same-store sales at The TJX Companies, Inc. (TJX), an off-price retailer of apparel and home fashions in the U.S. and worldwide, climbed 8.0% year over year in the four-week period ended May 26, 2012. This rate of increase in consolidated same-store sales was in line with that of the year-ago period. As for total sales, they climbed 10.0% in May 2012 to $1.9 billion from $1.7 billion in the year-ago period.

Comparable sales for the year-to-date period climbed 8% over the year-ago period. Total sales for the same period went up 11.0% year over year to $7.7 billion.

Strong performance of all the stores in the U.S., Canada and Europe led to the strong sales. Further, well-chosen stocks at the stores consistently improved customer traffic during the period.

Store Update

As of May 26, 2012, The TJX Companies operated 1,006 T.J. Maxx, 892 Marshalls, and 390 HomeGoods stores in the U.S.; 220 Winners, 87 HomeSense, and 12 Marshalls stores in Canada; and 337 T.K. Maxx and 24 HomeSense stores in Europe.

Future Planning

For the second quarter of 2013, the company expects earnings per share on a GAAP basis to be at the higher end of the previously-announced range of 47 to 50 cents, representing a 4% to 11% increase over 45 cents per share reported last year.

During its earnings conference call, TJX Companies updated its outlook for fiscal 2013 to a range of $2.27 to $2.37 per share, which represents a 14% to 19% increase over the prior-year’s adjusted earnings per share from continuing operations of $1.93. As per the Zacks Consensus estimate, fiscal 2013 earnings are expected to be $2.41.

We are encouraged by the company’s flexible off-price business model that is allowing it to react according to market trends. TJX Companies has a low-cost structure compared to many other traditional retailers. It focuses aggressively on expenses throughout its business.

TJX Companies competes with Kohl’s Corporation (KSS) and Target Corporation (TGT).

Currently, The TJX Companies carries a Zacks #1 Rank (short-term Strong Buy rating).

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