We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is TJX Companies (TJX) Down 2.1% Since the Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for The TJX Companies, Inc. (TJX - Free Report) . Shares have lost about 2.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
TJX Companies Q1 Earnings Top, Revenues Miss Estimates
The TJX Companies reported first-quarter fiscal 2018 results, wherein while earnings exceeded expectations, revenues missed the same on the back of disappointing comps growth. Following the results, the company narrowed its fiscal 2018 earnings guidance.
In the reported quarter, earnings of $0.82 per share surpassed the Zacks Consensus Estimate of $0.79 by 3.8%. Earnings also exceeded management’s guidance of $0.76–$0.78 per share. The bottom line grew 7.9% year over year, backed by higher consumer traffic and improved margins. Though management expected currency to hurt earnings by 6%, it had a positive impact on earnings by $0.01 per share.
Quarterly Details
Net sales increased 3% year over year to $7.78 billion, backed by increase in comps and improved traffic. The figure missed the Zacks Consensus Estimate of $7.91 billion by 1.5%. Currency headwinds impacted sales by 2 percentage points.
TJX Companies' consolidated comps grew 1%, but were lower from the 7% comps growth in the year-ago quarter. Higher comps at HomeGoods and TJX Canada increased 3% each, while comps were flat in the Marmaxx and International segment. Comps were in line with the management’s guidance of 0–1% growth.
TJX Companies' consolidated pre-tax profit margin contracted 0.2 percentage points (pp) year over year to 10.7% of sales. Gross margin expanded 0.2 pp year over year to 29.0%. The upside was primarily driven by strong increase in merchandise margins and gains related to the company’s inventory hedges, partially offset by higher supply chain costs.
However, selling, general and administrative costs, as a percentage of sales, went up 0.4 pp to 18.1% due to anticipated increase in wages.
Other Financial Updates
During the first quarter, the company repurchased 4.5 million shares for $350 million. For fiscal 2018, the company continues to expect to repurchase approximately $1.3 billion to $1.8 billion shares. Additionally, the company has announced a 20% increase in dividend in the first quarter, marking the 21st consecutive year of dividend hikes.
Cash and cash equivalents were $2.67 billion as of Apr 29, 2017, while long-term debt was $2.23 billion. Shareholders’ equity was $4.55 billion as of Apr 29.
During the quarter, the company increased its store count by 50 stores to a total of 3,862 stores. It had increased square footage by 4% over the same period last year.
Q2 Guidance
TJX Companies issued its guidance for second-quarter fiscal 2018. The company expects earnings in the range of $0.81–$0.83 per share compared with $0.84 reported a year ago. Wage increases are expected to negatively impact earnings growth by 2%. Currency headwinds are likely to hurt earnings by 4%. The company expects the change in accounting rules for share-based compensation to positively impact earnings growth by 1%.
For the second quarter, the company expects comps growth of 1–2% over last year’s growth.
Fiscal 2018 Guidance Narrowed
For fiscal 2018, TJX Companies has narrowed its earnings guidance. The company now projects adjusted earnings per share in the range of $3.71–$3.78, compared with the prior-range of $3.69–$3.78. The adjusted guidance (excludes benefit of 11 cents from the 53rd week in fiscal 2018) would represent a 5–7% increase from fiscal 2017 adjusted results of $3.53 per share. Comps are also expected to grow 1–2% for fiscal 2018.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been eight revisions lower for the current quarter. In the past month, the consensus estimate has shifted lower by 8.2% due to these changes.
At this time, TJX Companies' stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. The stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is TJX Companies (TJX) Down 2.1% Since the Last Earnings Report?
A month has gone by since the last earnings report for The TJX Companies, Inc. (TJX - Free Report) . Shares have lost about 2.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
TJX Companies Q1 Earnings Top, Revenues Miss Estimates
The TJX Companies reported first-quarter fiscal 2018 results, wherein while earnings exceeded expectations, revenues missed the same on the back of disappointing comps growth. Following the results, the company narrowed its fiscal 2018 earnings guidance.
In the reported quarter, earnings of $0.82 per share surpassed the Zacks Consensus Estimate of $0.79 by 3.8%. Earnings also exceeded management’s guidance of $0.76–$0.78 per share. The bottom line grew 7.9% year over year, backed by higher consumer traffic and improved margins. Though management expected currency to hurt earnings by 6%, it had a positive impact on earnings by $0.01 per share.
Quarterly Details
Net sales increased 3% year over year to $7.78 billion, backed by increase in comps and improved traffic. The figure missed the Zacks Consensus Estimate of $7.91 billion by 1.5%. Currency headwinds impacted sales by 2 percentage points.
TJX Companies' consolidated comps grew 1%, but were lower from the 7% comps growth in the year-ago quarter. Higher comps at HomeGoods and TJX Canada increased 3% each, while comps were flat in the Marmaxx and International segment. Comps were in line with the management’s guidance of 0–1% growth.
TJX Companies' consolidated pre-tax profit margin contracted 0.2 percentage points (pp) year over year to 10.7% of sales. Gross margin expanded 0.2 pp year over year to 29.0%. The upside was primarily driven by strong increase in merchandise margins and gains related to the company’s inventory hedges, partially offset by higher supply chain costs.
However, selling, general and administrative costs, as a percentage of sales, went up 0.4 pp to 18.1% due to anticipated increase in wages.
Other Financial Updates
During the first quarter, the company repurchased 4.5 million shares for $350 million. For fiscal 2018, the company continues to expect to repurchase approximately $1.3 billion to $1.8 billion shares. Additionally, the company has announced a 20% increase in dividend in the first quarter, marking the 21st consecutive year of dividend hikes.
Cash and cash equivalents were $2.67 billion as of Apr 29, 2017, while long-term debt was $2.23 billion. Shareholders’ equity was $4.55 billion as of Apr 29.
During the quarter, the company increased its store count by 50 stores to a total of 3,862 stores. It had increased square footage by 4% over the same period last year.
Q2 Guidance
TJX Companies issued its guidance for second-quarter fiscal 2018. The company expects earnings in the range of $0.81–$0.83 per share compared with $0.84 reported a year ago. Wage increases are expected to negatively impact earnings growth by 2%. Currency headwinds are likely to hurt earnings by 4%. The company expects the change in accounting rules for share-based compensation to positively impact earnings growth by 1%.
For the second quarter, the company expects comps growth of 1–2% over last year’s growth.
Fiscal 2018 Guidance Narrowed
For fiscal 2018, TJX Companies has narrowed its earnings guidance. The company now projects adjusted earnings per share in the range of $3.71–$3.78, compared with the prior-range of $3.69–$3.78. The adjusted guidance (excludes benefit of 11 cents from the 53rd week in fiscal 2018) would represent a 5–7% increase from fiscal 2017 adjusted results of $3.53 per share. Comps are also expected to grow 1–2% for fiscal 2018.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been eight revisions lower for the current quarter. In the past month, the consensus estimate has shifted lower by 8.2% due to these changes.
The TJX Companies, Inc. Price and Consensus
The TJX Companies, Inc. Price and Consensus | The TJX Companies, Inc. Quote
VGM Scores
At this time, TJX Companies' stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. The stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.