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The TJX Companies' (TJX) Q3 Earnings Top Estimates, Sales Down
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The TJX Companies, Inc. (TJX - Free Report) reported mixed third-quarter fiscal 2023 results, with the bottom line beating the Zacks Consensus Estimate and increasing year over year. The top line declined and missed the consensus mark.
Q3 in Details
TJX Companies’ third-quarter earnings came in at 86 cents per share. In third-quarter fiscal 2022, the company’s earnings per share (EPS) came in at 84 cents per share. The bottom line surpassed the Zacks Consensus Estimate of 80 cents per share.
Net sales came in at $12,166 million, down 3% from $12,532 million reported in the year-ago quarter. The metric missed the Zacks Consensus Estimate of $12,265.8 million. In the Marmaxx (U.S.) division, the company’s net sales came in at $7,455 million, up 3% from $7,214 million reported in the year-ago quarter. The metric amounted to $1,948 million, down 14% from $2,254 million across the HomeGoods (U.S.) division. TJX Canada’s net sales came in at $1,285 million, down 1% from $1,301 million reported in the year-ago quarter. TJX International’s (Europe & Australia) net sales were $1,479 million, down 16% from $1,764 million posted in the year-ago quarter.
Total U.S. comparable-store sales declined 2% in the third quarter of fiscal 2023, compared with a 16% increase in U.S. open-only comp store sales in the third quarter of fiscal 2022. U.S comp-store sales grew 3% in Marmaxx. U.S comp-store sales fell 16% in the HomeGoods category.
The TJX Companies, Inc. Price, Consensus and EPS Surprise
The pretax profit margin came in at 11.2%, up from 11% reported in the year-ago quarter. The upside can be attributed to gains from the timing of expenses. Merchandise margin came in line with the year-ago quarter, in spite of 1.2 percentage points of additional freight costs. Merchandise margin gained from solid markon, mainly stemming from improved buying. Additional wage expenses adversely impacted the pretax profit margin by 0.8 percentage points.
The gross profit margin was 29.1%, down 0.4 percentage points. Selling, general and administrative (SG&A) costs as a percent of sales came in at 18%, down 0.3 percentage points year over year.
Other Updates
TJX Companies’ ended the quarter with cash and cash equivalents of $3,364.7 million, long-term debt of $2,858 million and shareholders’ equity of $5,664.7 million. For the 39 weeks ended Oct 29, 2022, the company’s net cash provided by operating activities stood at $1,059.3 million.
During the quarter, management returned $843 million to shareholders. The company repurchased $500 million in stock, retiring 7.7 million shares. The company paid $343 million in shareholder dividends. Management expects to buyback $2.25 to $2.50 billion of the company’s stock in fiscal 2023.
As of Oct 29, 2022, total inventories were $8.3 billion. Management is optimistic about its capabilities to provide impressive brands and gifts to its stores and online during the holiday season.
During the reported quarter, the company concluded the divestiture of its minority investment in Familia.
Image Source: Zacks Investment Research
Outlook
Management is maintaining the high end of its fiscal 2023 outlook for adjusted pretax profit margin. The company expects the pretax profit margin of 9.3-9.4% and an adjusted pretax profit margin of 9.8-9.9% in fiscal 2023. The company had projected a fiscal 2023 pretax profit margin of 9.3-9.5% and an adjusted pretax profit margin of 9.7-9.9%.
For fiscal 2023, management envisions adjusted EPS in the range of $3.07-3.11 compared with the earlier guidance of $3.05-3.13. The change in the higher end of its fiscal 2023 adjusted EPS outlook reflects a projected 2 cents unfavorable impact from foreign currency exchange rates. The company expects U.S. comparable store sales to decline 1-2% in fiscal 2023. Earlier, management had envisioned the metric to decline 2-3%. The company reported 17% U.S. open-only comp store sales growth in fiscal 2022.
For the fourth quarter of fiscal 2023, management anticipates a pretax profit margin in the range of 9.5-9.8% and EPS between 85 and 89 cents. For the quarter, the company is projecting a U.S. comparable store sales of flat to 1% increase. The company reported 13% U.S. open-only comp store sales growth in the fourth quarter of fiscal 2022.
Shares of the Zacks Rank #3 (Hold) company have increased 9.6% in the past three months against the industry’s 3.6% decline.
The Zacks Consensus Estimate for Dillard's current financial year sales and EPS suggests a growth of 5.6% and 3.4%, respectively, from the year-ago period.
Dollar General (DG - Free Report) is a discount retailer offering various merchandise products. DG currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Dollar General’s current financial year earnings suggests growth of 13.8% from the year-ago reported figure. Dollar General has a trailing four-quarter earnings surprise of 2.2%, on average.
Sprouts Farmers (SFM - Free Report) offers fresh, natural and organic food products. The stock currently carries a Zacks Rank #2. SFM has an expected EPS growth rate of 10.4% for three to five years.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial year revenues and EPS suggests an increase of 4.6% and 9.5%, respectively, from the year-ago reported figure. Sprouts Farmers has a trailing four-quarter earnings surprise of roughly 10%, on average.
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The TJX Companies' (TJX) Q3 Earnings Top Estimates, Sales Down
The TJX Companies, Inc. (TJX - Free Report) reported mixed third-quarter fiscal 2023 results, with the bottom line beating the Zacks Consensus Estimate and increasing year over year. The top line declined and missed the consensus mark.
Q3 in Details
TJX Companies’ third-quarter earnings came in at 86 cents per share. In third-quarter fiscal 2022, the company’s earnings per share (EPS) came in at 84 cents per share. The bottom line surpassed the Zacks Consensus Estimate of 80 cents per share.
Net sales came in at $12,166 million, down 3% from $12,532 million reported in the year-ago quarter. The metric missed the Zacks Consensus Estimate of $12,265.8 million. In the Marmaxx (U.S.) division, the company’s net sales came in at $7,455 million, up 3% from $7,214 million reported in the year-ago quarter. The metric amounted to $1,948 million, down 14% from $2,254 million across the HomeGoods (U.S.) division. TJX Canada’s net sales came in at $1,285 million, down 1% from $1,301 million reported in the year-ago quarter. TJX International’s (Europe & Australia) net sales were $1,479 million, down 16% from $1,764 million posted in the year-ago quarter.
Total U.S. comparable-store sales declined 2% in the third quarter of fiscal 2023, compared with a 16% increase in U.S. open-only comp store sales in the third quarter of fiscal 2022. U.S comp-store sales grew 3% in Marmaxx. U.S comp-store sales fell 16% in the HomeGoods category.
The TJX Companies, Inc. Price, Consensus and EPS Surprise
The TJX Companies, Inc. price-consensus-eps-surprise-chart | The TJX Companies, Inc. Quote
The pretax profit margin came in at 11.2%, up from 11% reported in the year-ago quarter. The upside can be attributed to gains from the timing of expenses. Merchandise margin came in line with the year-ago quarter, in spite of 1.2 percentage points of additional freight costs. Merchandise margin gained from solid markon, mainly stemming from improved buying. Additional wage expenses adversely impacted the pretax profit margin by 0.8 percentage points.
The gross profit margin was 29.1%, down 0.4 percentage points. Selling, general and administrative (SG&A) costs as a percent of sales came in at 18%, down 0.3 percentage points year over year.
Other Updates
TJX Companies’ ended the quarter with cash and cash equivalents of $3,364.7 million, long-term debt of $2,858 million and shareholders’ equity of $5,664.7 million. For the 39 weeks ended Oct 29, 2022, the company’s net cash provided by operating activities stood at $1,059.3 million.
During the quarter, management returned $843 million to shareholders. The company repurchased $500 million in stock, retiring 7.7 million shares. The company paid $343 million in shareholder dividends. Management expects to buyback $2.25 to $2.50 billion of the company’s stock in fiscal 2023.
As of Oct 29, 2022, total inventories were $8.3 billion. Management is optimistic about its capabilities to provide impressive brands and gifts to its stores and online during the holiday season.
During the reported quarter, the company concluded the divestiture of its minority investment in Familia.
Image Source: Zacks Investment Research
Outlook
Management is maintaining the high end of its fiscal 2023 outlook for adjusted pretax profit margin. The company expects the pretax profit margin of 9.3-9.4% and an adjusted pretax profit margin of 9.8-9.9% in fiscal 2023. The company had projected a fiscal 2023 pretax profit margin of 9.3-9.5% and an adjusted pretax profit margin of 9.7-9.9%.
For fiscal 2023, management envisions adjusted EPS in the range of $3.07-3.11 compared with the earlier guidance of $3.05-3.13. The change in the higher end of its fiscal 2023 adjusted EPS outlook reflects a projected 2 cents unfavorable impact from foreign currency exchange rates. The company expects U.S. comparable store sales to decline 1-2% in fiscal 2023. Earlier, management had envisioned the metric to decline 2-3%. The company reported 17% U.S. open-only comp store sales growth in fiscal 2022.
For the fourth quarter of fiscal 2023, management anticipates a pretax profit margin in the range of 9.5-9.8% and EPS between 85 and 89 cents. For the quarter, the company is projecting a U.S. comparable store sales of flat to 1% increase. The company reported 13% U.S. open-only comp store sales growth in the fourth quarter of fiscal 2022.
Shares of the Zacks Rank #3 (Hold) company have increased 9.6% in the past three months against the industry’s 3.6% decline.
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Dillard's, Inc. (DDS - Free Report) , a retail department stores operator, currently has a Zacks Rank #1 (Strong Buy). DDS has a trailing four-quarter earnings surprise of almost 144.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Dillard's current financial year sales and EPS suggests a growth of 5.6% and 3.4%, respectively, from the year-ago period.
Dollar General (DG - Free Report) is a discount retailer offering various merchandise products. DG currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Dollar General’s current financial year earnings suggests growth of 13.8% from the year-ago reported figure. Dollar General has a trailing four-quarter earnings surprise of 2.2%, on average.
Sprouts Farmers (SFM - Free Report) offers fresh, natural and organic food products. The stock currently carries a Zacks Rank #2. SFM has an expected EPS growth rate of 10.4% for three to five years.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial year revenues and EPS suggests an increase of 4.6% and 9.5%, respectively, from the year-ago reported figure. Sprouts Farmers has a trailing four-quarter earnings surprise of roughly 10%, on average.