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TJX Companies (TJX) Queued for Q4 Earnings: Key Things to Note

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The TJX Companies, Inc. (TJX - Free Report) is likely to witness a decline in the top and bottom lines when it reports fourth-quarter fiscal 2021 numbers on Feb 24. The Zacks Consensus Estimate for earnings has declined by a cent over the past 30 days to 60 cents per share, which however indicates a drop of nearly 26% from the figure reported in the prior-year period. Though TJX Companies delivered an earnings surprise of 73.2% in the last reported quarter, it has a trailing four-quarter negative earnings surprise of roughly 84%, on average.

The Zacks Consensus Estimate for revenues is pegged at $11,425 million, suggesting a decrease of 6.4% from the prior-year quarter’s reported figure.

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

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

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

Key Factors to Note

The company has been bearing the brunt of hurdles related to the novel coronavirus, like soft traffic and temporary store closures due to the rising number of cases. On its last earnings call, management stated that nearly 470 of the company’s stores were temporarily shut due to local government mandates amid the coronavirus pandemic. Most of these closed stores are situated in Europe. This is likely to have had a negative impact on the quarter under review. Incidentally, the company’s open-only comp store sales have been declining for the past two quarters. Open-only comp store sales for the company fell 5% year over year in the fiscal third quarter. For the first two weeks of the fiscal fourth quarter, total open-only comp store sales were down 7%.

Nevertheless, TJX Companies has been benefiting from its efforts to strengthen the e-commerce business, especially as the pandemic has led to increased preference for this mode of shopping. In the last earnings call, management said that it was on track to add new categories and brands to its U.S. and U.K. online businesses. In fact, the company was planning to offer a wider range of gifts online during the holiday season. Further, the company’s HomeGoods segment has been seeing robust demand, of late.

That being said, TJX Companies has been incurring high costs associated with the pandemic. The company saw nearly $270 million in additional costs related to COVID-19 in the third quarter of fiscal 2021. These included higher payroll investments in stores for better cleaning, additional expenses related to the appreciation bonus paid in the quarter and personal protective equipment for employees. During the fiscal fourth quarter, management expects incremental pandemic-related costs compared with the fiscal third quarter.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict 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 currently has a Zacks Rank #3 and an Earnings ESP of -6.12%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combinations

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

DICKS Sporting (DKS - Free Report) has an Earnings ESP of +8.73% and a Zacks Rank #2.

Dollar Tree (DLTR - Free Report) has an Earnings ESP of +1.94% and a Zacks Rank #2.

Burlington Stores (BURL - Free Report) has an Earnings ESP of +6.20% and a Zacks Rank #3.

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