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.
TJX (TJX) Up 6% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
A month has gone by since the last earnings report for TJX (TJX - Free Report) . Shares have added about 6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is TJX due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
The TJX Companies Ups Profit View on Q2 Earnings Beat
TJX Companies posted impressive second-quarter fiscal 2024 results, with the top and the bottom-line increasing year over year. Net sales and earnings surpassed the Zacks Consensus Estimate. Management raised its fiscal 2024 comparable store sales, pretax profit margin and earnings per share (EPS) outlook.
Quarter in Detail
TJX Companies’ EPS came in at 85 cents, rising 23% from the year-ago period’s earnings of 69 cents. The bottom line cruised past the Zacks Consensus Estimate of 76 cents. Foreign currency movements had a 1-cent negative effect on EPS.
Net sales came in at $12,758 million, up 8% from the $11,843 million reported in the year-ago quarter. The metric surpassed the Zacks Consensus Estimate of $12,429.8 million. Foreign currency movements had a neutral effect on net sales growth.
In the Marmaxx (U.S.) division, the company’s net sales came in at $7,903 million, up 9% year over year. Notably, the company witnessed strength in the apparel and accessories categories. Net sales amounted to $2,011 million, up 8% year over year, in the HomeGoods (U.S.) division.
TJX Canada’s net sales came in at $1,223 million, down 2% from the figure reported in the year-ago period. TJX International’s (Europe & Australia) net sales were $1,621 million, up 8% year over year.
Comp store sales rose 8% at Marmaxx (U.S.) while increasing 4% at HomeGoods (U.S.). Comp store sales increased 1% and 3%, respectively, at TJX Canada and
TJX International (Europe & Australia). Overall, the company’s comp store sales rose 6% due to higher customer traffic, which grew in each division. We had expected a comp store sales growth of 2.7%.
The pretax profit margin was 10.4%, up 1.2 percentage points from the year-ago quarter’s level. The upside can be attributed to a greater-than-anticipated gain from reduced freight costs and expense leverage. We had expected a pretax profit margin of 9.5%.
The gross profit margin came in at 30.2%, up 2.6 percentage point on the back of increased merchandise margin stemming from lower freight costs. We had expected a gross profit margin of 27.3%.
Selling, general and administrative (SG&A) costs as a percent of sales was 20.1%, up 1.7 percentage point. The rise in such costs can be attributed to increased incentive compensation accruals, incremental store wages and payroll costs, among others.
Other Updates
TJX Companies ended the quarter with cash of $4,550 million, long-term debt of $2,861 million and shareholders’ equity of $6,608 million. The company generated an operating cash flow of $2,086 million in 26 weeks ended Jul 29, 2023.
During the quarter, management returned $932 million to shareholders. TJX repurchased $550 million in stock, retiring 6.7 million shares. The company paid out $382 million in shareholder dividends. Management plans to repurchase shares worth $2-$2.5 billion in the fiscal year ending Feb 3, 2024.
As of Jul 29, 2023, total inventories were $6.6 billion. Management is optimistic about its capabilities to offer impressive branded merchandise at its stores and online during the fall and holiday seasons.
Guidance
For fiscal 2024, TJX Companies expects an overall comparable store sales increase of 3-4%, compared with 2-3% growth projected earlier.
Management expects fiscal 2024 adjusted pretax profit margin of 10.6-10.7% compared with the earlier view of 10.2-10.4%. The reported pretax profit margin is expected at 10.7-10.8% now compared with 10.3-10.5% expected earlier.
For fiscal 2024, management now envisions the adjusted EPS in the $3.56-$3.62 range and a reported EPS of $3.66 to $3.72. It expected the adjusted EPS in the band of $3.39-$3.48 and the reported EPS in the range of $3.49 to $3.58.
For the third quarter of fiscal 2024, management anticipates a pretax profit margin in the range of 11.3-11.5% and an EPS between 95 and 98 cents. The company is projecting overall comparable store sales growth of 3-4% for the quarter.
For the fourth quarter of fiscal 2024, management anticipates a pretax profit margin in the range of 10.7-10.9% and an EPS between $1.10-$1.13. For the quarter, the company is projecting overall comparable store sales growth of 3-4%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, TJX has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, TJX has a Zacks Rank #3 (Hold). We expect an in-line return 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
TJX (TJX) Up 6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for TJX (TJX - Free Report) . Shares have added about 6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is TJX due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
The TJX Companies Ups Profit View on Q2 Earnings Beat
TJX Companies posted impressive second-quarter fiscal 2024 results, with the top and the bottom-line increasing year over year. Net sales and earnings surpassed the Zacks Consensus Estimate. Management raised its fiscal 2024 comparable store sales, pretax profit margin and earnings per share (EPS) outlook.
Quarter in Detail
TJX Companies’ EPS came in at 85 cents, rising 23% from the year-ago period’s earnings of 69 cents. The bottom line cruised past the Zacks Consensus Estimate of 76 cents. Foreign currency movements had a 1-cent negative effect on EPS.
Net sales came in at $12,758 million, up 8% from the $11,843 million reported in the year-ago quarter. The metric surpassed the Zacks Consensus Estimate of $12,429.8 million. Foreign currency movements had a neutral effect on net sales growth.
In the Marmaxx (U.S.) division, the company’s net sales came in at $7,903 million, up 9% year over year. Notably, the company witnessed strength in the apparel and accessories categories. Net sales amounted to $2,011 million, up 8% year over year, in the HomeGoods (U.S.) division.
TJX Canada’s net sales came in at $1,223 million, down 2% from the figure reported in the year-ago period. TJX International’s (Europe & Australia) net sales were $1,621 million, up 8% year over year.
Comp store sales rose 8% at Marmaxx (U.S.) while increasing 4% at HomeGoods (U.S.). Comp store sales increased 1% and 3%, respectively, at TJX Canada and
TJX International (Europe & Australia). Overall, the company’s comp store sales rose 6% due to higher customer traffic, which grew in each division. We had expected a comp store sales growth of 2.7%.
The pretax profit margin was 10.4%, up 1.2 percentage points from the year-ago quarter’s level. The upside can be attributed to a greater-than-anticipated gain from reduced freight costs and expense leverage. We had expected a pretax profit margin of 9.5%.
The gross profit margin came in at 30.2%, up 2.6 percentage point on the back of increased merchandise margin stemming from lower freight costs. We had expected a gross profit margin of 27.3%.
Selling, general and administrative (SG&A) costs as a percent of sales was 20.1%, up 1.7 percentage point. The rise in such costs can be attributed to increased incentive compensation accruals, incremental store wages and payroll costs, among others.
Other Updates
TJX Companies ended the quarter with cash of $4,550 million, long-term debt of $2,861 million and shareholders’ equity of $6,608 million. The company generated an operating cash flow of $2,086 million in 26 weeks ended Jul 29, 2023.
During the quarter, management returned $932 million to shareholders. TJX repurchased $550 million in stock, retiring 6.7 million shares. The company paid out $382 million in shareholder dividends. Management plans to repurchase shares worth $2-$2.5 billion in the fiscal year ending Feb 3, 2024.
As of Jul 29, 2023, total inventories were $6.6 billion. Management is optimistic about its capabilities to offer impressive branded merchandise at its stores and online during the fall and holiday seasons.
Guidance
For fiscal 2024, TJX Companies expects an overall comparable store sales increase of 3-4%, compared with 2-3% growth projected earlier.
Management expects fiscal 2024 adjusted pretax profit margin of 10.6-10.7% compared with the earlier view of 10.2-10.4%. The reported pretax profit margin is expected at 10.7-10.8% now compared with 10.3-10.5% expected earlier.
For fiscal 2024, management now envisions the adjusted EPS in the $3.56-$3.62 range and a reported EPS of $3.66 to $3.72. It expected the adjusted EPS in the band of $3.39-$3.48 and the reported EPS in the range of $3.49 to $3.58.
For the third quarter of fiscal 2024, management anticipates a pretax profit margin in the range of 11.3-11.5% and an EPS between 95 and 98 cents. The company is projecting overall comparable store sales growth of 3-4% for the quarter.
For the fourth quarter of fiscal 2024, management anticipates a pretax profit margin in the range of 10.7-10.9% and an EPS between $1.10-$1.13. For the quarter, the company is projecting overall comparable store sales growth of 3-4%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, TJX has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, TJX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.