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TJX Companies (TJX) Q2 Earnings: A Surprise in the Cards?
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We expect The TJX Companies Inc. (TJX - Free Report) to beat estimates when it reports second-quarter fiscal 2017 results on Aug 16, before the market opens.
Last quarter, the company delivered a positive earnings surprise of 8.57%. In fact, the company delivered an average positive surprise of 5.38% in the last four quarters.
Let’s see how things are shaping up for this announcement.
Our proven model shows that TJX Companies is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +1.25%. This is meaningful and leading indicator of a likely positive earnings surprise.
Zacks Rank: TJX Companies carries a Zacks Rank #3 (Hold), which when combined with positive ESP makes us confident of an earnings beat. Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a higher chance on beating on earnings.
Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
What’s Driving the Better than Expected Results?
TJX Companies has been posting modest earnings and revenue growth over the past few quarters backed by improvement in consumer traffic, higher margins and solid comparable-store sales growth.
The company has been reporting positive comps growth over the past 29 quarters supported by higher traffic. The company’s fresh collection and widespread sourcing machinery has helped it maintain a loyal customer base. The trend is expected to continue in the to-be-reported quarter as well.
During fiscal 2016, TJX Companies ramped up its marketing and promotional initiatives in its stores. This is expected to boost its top line in the to-be-reported quarter as well. The company’s acquisition of Sierra Trade Post in Australia, which was integrated in fiscal 2016, will also expand global presence and boost revenues in the to-be-reported quarter. This is expected to boost revenue in the to-be-reported quarter as well.
Based on the guidance issued during first-quarter fiscal 2017 conference call, TJX expects fiscal second-quarter earnings in the range of 77 cents to 79 cents compared with 80 cents reported a year ago. Comparable-store sales are expected to grow 2–3%. Fiscal second-quarter net sales are expected to be in the range of $7.7 billion to $7.8 billion. The Zacks Consensus Estimate is pegged at 80 cents which is a tad higher than the guidance provided by the company.
Stocks to Consider
Some stocks in the retail companies that have both a positive Earnings ESP and a favorable Zacks Rank are:
Best Buy Inc. (BBY - Free Report) with an Earnings ESP of +7.14% and a Zacks Rank #2.
Dollar Tree Inc. (DLTR - Free Report) with an Earnings ESP of +4.11% and a Zacks Rank #2.
Nordstrom Inc. (JWN - Free Report) with an Earnings ESP of +8.16% and a Zacks Rank #2.
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TJX Companies (TJX) Q2 Earnings: A Surprise in the Cards?
We expect The TJX Companies Inc. (TJX - Free Report) to beat estimates when it reports second-quarter fiscal 2017 results on Aug 16, before the market opens.
Last quarter, the company delivered a positive earnings surprise of 8.57%. In fact, the company delivered an average positive surprise of 5.38% in the last four quarters.
Let’s see how things are shaping up for this announcement.
TJX COS INC NEW Price and EPS Surprise
TJX COS INC NEW Price and EPS Surprise | TJX COS INC NEW Quote
Why a Likely Positive Surprise?
Our proven model shows that TJX Companies is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +1.25%. This is meaningful and leading indicator of a likely positive earnings surprise.
Zacks Rank: TJX Companies carries a Zacks Rank #3 (Hold), which when combined with positive ESP makes us confident of an earnings beat. Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a higher chance on beating on earnings.
Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
What’s Driving the Better than Expected Results?
TJX Companies has been posting modest earnings and revenue growth over the past few quarters backed by improvement in consumer traffic, higher margins and solid comparable-store sales growth.
The company has been reporting positive comps growth over the past 29 quarters supported by higher traffic. The company’s fresh collection and widespread sourcing machinery has helped it maintain a loyal customer base. The trend is expected to continue in the to-be-reported quarter as well.
During fiscal 2016, TJX Companies ramped up its marketing and promotional initiatives in its stores. This is expected to boost its top line in the to-be-reported quarter as well. The company’s acquisition of Sierra Trade Post in Australia, which was integrated in fiscal 2016, will also expand global presence and boost revenues in the to-be-reported quarter. This is expected to boost revenue in the to-be-reported quarter as well.
Based on the guidance issued during first-quarter fiscal 2017 conference call, TJX expects fiscal second-quarter earnings in the range of 77 cents to 79 cents compared with 80 cents reported a year ago. Comparable-store sales are expected to grow 2–3%. Fiscal second-quarter net sales are expected to be in the range of $7.7 billion to $7.8 billion. The Zacks Consensus Estimate is pegged at 80 cents which is a tad higher than the guidance provided by the company.
Stocks to Consider
Some stocks in the retail companies that have both a positive Earnings ESP and a favorable Zacks Rank are:
Best Buy Inc. (BBY - Free Report) with an Earnings ESP of +7.14% and a Zacks Rank #2.
Dollar Tree Inc. (DLTR - Free Report) with an Earnings ESP of +4.11% and a Zacks Rank #2.
Nordstrom Inc. (JWN - Free Report) with an Earnings ESP of +8.16% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>