The TJX Companies, Inc. (NYSE:TJX) reported earnings of 75 cents per share in the first quarter of fiscal 2017, surpassing the Zacks Consensus Estimate of 70 cents. Earnings grew 7.14% year over year, backed by higher consumer traffic and solid comparable-store sales growth.
Quarterly Details
Net sales increased 10% year over year to $7.5 billion, supported by higher comps. Revenues also beat the Zacks Consensus Estimate of $7.8 billion.
TJX Companies' consolidated comparable-store sales grew 7%, better than the 5% rise in the year-ago quarter. The improvement was supported by 6%, 9%, 14% and 4% year-over-year growth in same-store sales at Marmaxx, Home Goods, TJX Canada and TJX Europe, respectively.
TJX Companies' pre-tax profit margin shrank 0.2 percentage points (pp) year over year to 10.9% of sales. Gross margin increased 0.5 pp year over year to 28.8%. The gain primarily came on the back of strong buying and occupancy leverage.
Selling, general and administrative costs, as a percentage of sales, went up 0.7 pp to 17.7% due to increased wages and investments.
Share Repurchase
During the reported quarter, the leading off-price retailer spent $375 million to repurchase 5.0 million common shares.
The company increased its dividend by 24% in the first quarter, marking the 20th consecutive year of dividend increase by the company.
Guidance
TJX Companies issued the fiscal second-quarter 2017 guidance. The company expects 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%.
The company raised its full-year guidance to reflect its strong first quarter results. TJX Companies projects diluted earnings per share in the range of $3.35 to $3.42 compared with the previous estimate of $3.29 to $3.38. The company reported adjusted earnings of $3.33 last year. Comparable-store sales are expected to grow 2--3% compared with 1–2% projected earlier
Key Picks in the Sector
TJX Companies currently has a Zacks Rank #2 (Buy). Other stocks in the broader retail wholesale sector with the same Zacks Rank are Best Buy Inc. (NYSE:BBY) , Chuy’s Holdings Inc. (NASDAQ:CHUY) and The Kroger Company (NYSE:KR) .
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