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TJX Companies (TJX) Queued for Q2 Earnings: Things to Note

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The TJX Companies, Inc. (TJX - Free Report) is likely to register growth in the top and the bottom line when it reports second-quarter fiscal 2022 numbers on Aug 18. The Zacks Consensus Estimate for revenues is pegged at $10,936 million, which suggests a surge of 64% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for quarterly earnings has remained unchanged in the past 30 days at 56 cents per share. The figure suggests a significant improvement from a loss of 18 cents reported in the year-ago quarter. The off-price apparel and home fashions retailer has a trailing four-quarter negative earnings surprise of almost 7%, on average. The TJX Companies delivered an earnings surprise of 41.9% in the last reported quarter.

The TJX Companies, Inc. Price and EPS Surprise

 

The TJX Companies, Inc. Price and EPS Surprise

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

 

Things to Note

The TJX Companies’ HomeGoods segment has been seeing robust demand for a while now. Owing to temporary store closures amid the pandemic, the company came up with a temporary new sales measure — open-only comp store sales. The metric reports rise or decline in sales of stores for the days they were operational in the first quarter of fiscal 2022 compared with the same days in fiscal 2020 before the pandemic. During first-quarter fiscal 2022, open-only comp store sales surged 40% in the HomeGoods (U.S.) segment from fiscal 2020’s level. Management, in its last earnings call, highlighted that it expects to keep witnessing robust sales trend in HomeGoods business as consumers are increasingly spending on their houses amid health crisis. The TJX Companies is benefiting from its efforts to strengthen the e-commerce business, as the pandemic has led to increased preference for this mode of shopping. Apart from these, the company is committed toward boosting growth, through effective marketing initiatives and loyalty programs.  

Management, in its call, highlighted that at the beginning of second-quarter fiscal 2022, the company was witnessing overall open-only comp store sales trends that were prevalent in fiscal first quarter. During fiscal first quarter, open-only comp store sales for the company increased 16% from fiscal 2020 levels.

All that being said, The TJX Companies has been witnessing coronavirus-induced hurdles like temporary store closures. In its last earnings call, management notified that almost 300 stores were temporarily shut thanks to government mandates amid the pandemic. Such stores were situated across Canada and Europe. The company had notified that it anticipates stores in Canada and Europe to be temporarily shut for 17% and 7% of the quarter under review, respectively. Overall, the company had expected stores to be closed for nearly 3% of fiscal second quarter. Total sales, pretax margin and earnings per share are likely to have been negatively affected by these closures. Temporary store closures are likely to have lowered fiscal second-quarter sales by $275-$325 million.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for The 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.

The TJX Companies currently carries a Zacks Rank #2 and has an Earnings ESP of 0.00%.

Some Stocks With Favorable Combinations

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Walmart Inc. (WMT - Free Report) currently has an Earnings ESP of +0.27% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Target Corporation (TGT - Free Report) currently has an Earnings ESP of +3.93% and a Zacks Rank of 3.

Costco Wholesale Corporation (COST - Free Report) currently has an Earnings ESP of +0.44% and a Zacks Rank of 3.

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