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The TJX Companies (TJX) Q4 Earnings Meet Estimates, Sales Rise
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The TJX Companies, Inc. (TJX - Free Report) ended fiscal 2023 on a solid note, with the fourth-quarter top and bottom lines increasing year over year, and the former cruising ahead of the Zacks Consensus Estimate.
The company witnessed strength in its apparel and accessories categories during fiscal 2023, while sales at home businesses came in soft as the company saw exceptional growth in the preceding two years. Management remains optimistic about its fiscal 2024 performance.
Quarter in Detail
TJX Companies’ earnings per share (EPS) came in at 89 cents, which increased 14% year over year. The bottom line came in line with the Zacks Consensus Estimate. Foreign currency movements had a three-cent adverse impact on the fourth-quarter EPS.
Net sales came in at $14,520 million, up 5% from the $13,854 million reported in the year-ago quarter. The metric beat the Zacks Consensus Estimate of $14,148 million. Foreign currency movements had a two-percentage-point negative effect on net sales growth.
The TJX Companies, Inc. Price, Consensus and EPS Surprise
In the Marmaxx (U.S.) division, the company’s net sales came in at $8,983 million, up 8% year over year. Net sales amounted to $2,424 million, down 4% year over year, in the HomeGoods (U.S.) division. TJX Canada’s net sales came in at $1,297 million, up 3% from the figure reported in the year-ago period. TJX International’s (Europe & Australia) net sales were $1,816 million, up 1% from the year-ago quarter.
Total U.S. comparable-store sales increased 4% in the fourth quarter of fiscal 2023, wherein the company witnessed an increase in U.S. customer traffic. U.S. comp-store sales grew 7% in Marmaxx, buoyed by solid apparel and accessories categories’ sales. U.S. comp-store sales fell 7% in the HomeGoods category.
The pretax profit margin came in at 9.2%, up 0.2% from the figure reported in the year-ago quarter. The merchandise margin declined slightly, including an unexpected shrink charge compared with the year-ago period.
The gross profit margin was 26.1%, down by one percentage point. SG&A costs as a percent of sales came in at 17%, down by one percentage point year over year.
Other Updates
TJX Companies ended the year with cash of $5.5 billion, long-term debt of $2.9 billion and shareholders’ equity of $6.4 billion. The company generated operating cash flow of $4.1 billion in fiscal 2023.
During the quarter, management returned $791 million to shareholders. The company repurchased $540 million in stock, retiring 5.7 million shares. The company paid out $341 million in shareholder dividends.
Management announced plans to raise its quarterly dividend by 13% to 33.25 cents per share, which will be announced in March 2023 and paid in June 2023.
Management had shares worth $1.5 billion remaining under its repurchase plan as of the end of fiscal 2023. It approved a new plan to make repurchases of up to an additional $2 billion. The company plans to repurchase shares worth $2-$2.5 billion in the fiscal year ending Feb 3, 2024.
As of Jan 28, 2023, total inventories were $5.8 billion. Management is optimistic about its capabilities to provide impressive brands and gifts to its stores and online during the spring season.
In fiscal 2023, TJX Companies concluded the divestiture of its minority investment in Familia.
Guidance
Management expects a fiscal 2024 adjusted pretax profit margin of 10-10.2%. The reported pretax profit margin is expected at 10.1-10.3%.
For fiscal 2024, management envisions the adjusted EPS in the range of $3.29-$3.41 and reported EPS of $3.39 to $3.51. The company expects an overall comparable store sales increase of 2-3% in fiscal 2024.
For the first quarter of fiscal 2024, management anticipates a pretax profit margin in the range of 9.2-9.5% and an EPS between 68 and 71 cents. For the quarter, the company is projecting overall comparable store sales growth of 2-3%.
Management continues to expect a pretax profit margin of 10.6% for fiscal 2025.
Shares of this Zacks Rank #3 (Hold) company have rallied 23.4% in the past six months compared with the industry’s growth of 2.9%.
Have a Look at These Retail Picks
Here we have highlighted three better-ranked stocks.
The Zacks Consensus Estimate for Burlington Stores’ current financial-year EPS suggests a decline of 52.3% from the year-ago reported figure. Burlington Stores has a trailing four-quarter negative earnings surprise of 0.6%, on average.
Costco Wholesale Corporation (COST - Free Report) operates membership warehouses. The stock currently carries a Zacks Rank #2. COST has an expected EPS growth rate of 9.6% for three to five years.
The Zacks Consensus Estimate for Costco’s current financial-year EPS suggests a rise of 8.6% from the year-ago reported figure. Costco has a trailing four-quarter earnings surprise of 3.7%, on average.
Foot Locker (FL - Free Report) operates as an athletic footwear and apparel retailer. FL currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Foot Locker’s current financial-year EPS suggests a drop of 42.2% from the year-ago reported figure. Foot Locker has a trailing four-quarter earnings surprise of 22.2%, on average.
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The TJX Companies (TJX) Q4 Earnings Meet Estimates, Sales Rise
The TJX Companies, Inc. (TJX - Free Report) ended fiscal 2023 on a solid note, with the fourth-quarter top and bottom lines increasing year over year, and the former cruising ahead of the Zacks Consensus Estimate.
The company witnessed strength in its apparel and accessories categories during fiscal 2023, while sales at home businesses came in soft as the company saw exceptional growth in the preceding two years. Management remains optimistic about its fiscal 2024 performance.
Quarter in Detail
TJX Companies’ earnings per share (EPS) came in at 89 cents, which increased 14% year over year. The bottom line came in line with the Zacks Consensus Estimate. Foreign currency movements had a three-cent adverse impact on the fourth-quarter EPS.
Net sales came in at $14,520 million, up 5% from the $13,854 million reported in the year-ago quarter. The metric beat the Zacks Consensus Estimate of $14,148 million. Foreign currency movements had a two-percentage-point negative effect on net sales growth.
The TJX Companies, Inc. Price, Consensus and EPS Surprise
The TJX Companies, Inc. price-consensus-eps-surprise-chart | The TJX Companies, Inc. Quote
In the Marmaxx (U.S.) division, the company’s net sales came in at $8,983 million, up 8% year over year. Net sales amounted to $2,424 million, down 4% year over year, in the HomeGoods (U.S.) division. TJX Canada’s net sales came in at $1,297 million, up 3% from the figure reported in the year-ago period. TJX International’s (Europe & Australia) net sales were $1,816 million, up 1% from the year-ago quarter.
Total U.S. comparable-store sales increased 4% in the fourth quarter of fiscal 2023, wherein the company witnessed an increase in U.S. customer traffic. U.S. comp-store sales grew 7% in Marmaxx, buoyed by solid apparel and accessories categories’ sales. U.S. comp-store sales fell 7% in the HomeGoods category.
The pretax profit margin came in at 9.2%, up 0.2% from the figure reported in the year-ago quarter. The merchandise margin declined slightly, including an unexpected shrink charge compared with the year-ago period.
The gross profit margin was 26.1%, down by one percentage point. SG&A costs as a percent of sales came in at 17%, down by one percentage point year over year.
Other Updates
TJX Companies ended the year with cash of $5.5 billion, long-term debt of $2.9 billion and shareholders’ equity of $6.4 billion. The company generated operating cash flow of $4.1 billion in fiscal 2023.
During the quarter, management returned $791 million to shareholders. The company repurchased $540 million in stock, retiring 5.7 million shares. The company paid out $341 million in shareholder dividends.
Management announced plans to raise its quarterly dividend by 13% to 33.25 cents per share, which will be announced in March 2023 and paid in June 2023.
Management had shares worth $1.5 billion remaining under its repurchase plan as of the end of fiscal 2023. It approved a new plan to make repurchases of up to an additional $2 billion. The company plans to repurchase shares worth $2-$2.5 billion in the fiscal year ending Feb 3, 2024.
As of Jan 28, 2023, total inventories were $5.8 billion. Management is optimistic about its capabilities to provide impressive brands and gifts to its stores and online during the spring season.
In fiscal 2023, TJX Companies concluded the divestiture of its minority investment in Familia.
Guidance
Management expects a fiscal 2024 adjusted pretax profit margin of 10-10.2%. The reported pretax profit margin is expected at 10.1-10.3%.
For fiscal 2024, management envisions the adjusted EPS in the range of $3.29-$3.41 and reported EPS of $3.39 to $3.51. The company expects an overall comparable store sales increase of 2-3% in fiscal 2024.
For the first quarter of fiscal 2024, management anticipates a pretax profit margin in the range of 9.2-9.5% and an EPS between 68 and 71 cents. For the quarter, the company is projecting overall comparable store sales growth of 2-3%.
Management continues to expect a pretax profit margin of 10.6% for fiscal 2025.
Shares of this Zacks Rank #3 (Hold) company have rallied 23.4% in the past six months compared with the industry’s growth of 2.9%.
Have a Look at These Retail Picks
Here we have highlighted three better-ranked stocks.
Burlington Stores (BURL - Free Report) is a retailer of branded apparel products. BURL currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Burlington Stores’ current financial-year EPS suggests a decline of 52.3% from the year-ago reported figure. Burlington Stores has a trailing four-quarter negative earnings surprise of 0.6%, on average.
Costco Wholesale Corporation (COST - Free Report) operates membership warehouses. The stock currently carries a Zacks Rank #2. COST has an expected EPS growth rate of 9.6% for three to five years.
The Zacks Consensus Estimate for Costco’s current financial-year EPS suggests a rise of 8.6% from the year-ago reported figure. Costco has a trailing four-quarter earnings surprise of 3.7%, on average.
Foot Locker (FL - Free Report) operates as an athletic footwear and apparel retailer. FL currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Foot Locker’s current financial-year EPS suggests a drop of 42.2% from the year-ago reported figure. Foot Locker has a trailing four-quarter earnings surprise of 22.2%, on average.